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iSmash is reportedly exploring a possible sale of the business after its auditors warned of a “material uncertainty” over its future amid growing losses, the Times has reported.
According to its recent trading update, the company revealed it fell further into the red in the year to the end of December 2022, with pre-tax losses widening from £2.6m to £5.9m, which it said reflected a “significant reduction” in pandemic-related government support.
Its auditors Saffery LLP stated that the business, which counts David Ross, co-founder of Carphone Warehouse, as an investor, would continue to make losses in 2023 and would require additional funding to meet its obligations.
The company received funds from the shareholders of its parent company while it explored other options.
The auditors said that the company’s dependence on those shareholders’ ongoing financial support suggested a “material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”
iSmash stated that it had been exploring options that “provide the best fit for the business to achieve its strategic initiatives”.
iSmash has been contacted for comment.
