[Edaily Reporter KIM SAE-MI ] EOFlow Co., Ltd.(294090)has faced additional grounds for a substantive review of its listing eligibility due to falling short of revenue thresholds for both the half-year and quarterly periods, as well as having its capital fully eroded. Amid a sharp decline in revenue resulting from the lawsuit with U.S.-based Insulet, the company also received a qualified opinion on its half-year financial statements.
The Korea Exchange announced on the 14th that additional grounds for a substantive review of EOFlow Co., Ltd.’s listing eligibility have been established, as it was confirmed that the company’s most recent half-year revenue was less than 700 million won, its most recent quarterly revenue was less than 300 million won, and its equity was fully eroded as of the end of the most recent half-year.
EOFlow Co., Ltd.’s standalone revenue for the first half of this year was 200 million won, a sharp 88% decline compared to the 1.9 billion won in consolidated revenue for the same period last year. Second-quarter revenue also totaled only 100 million won, falling short of the KOSDAQ listing requirement of 300 million won.
The company cited restrictions on new business operations resulting from a lawsuit with Insulet as a cause of the revenue decline. EOFlow Co., Ltd. has resumed new business operations since June 23.
The consolidated operating loss for the first half of the year was 5.8 billion won, a significant reduction from the 107.9 billion won loss recorded in the same period last year. The net loss also narrowed from 116.7 billion won to 14.0 billion won over the same period.
The company’s financial structure remains fragile. As of the end of the first half of this year, on a consolidated basis, total assets stood at 31 billion won, total liabilities at 78.3 billion won, and total equity at -47.6 billion won. Share capital was 4.2 billion won, resulting in a capital erosion rate of 1,237.78%. Although this represents an improvement compared to the same period last year—when total equity was -98.5 billion won and the capital erosion rate was 2,908.16%—the company remains in a state of complete capital erosion.
The accounting firm Daejoo, the company’s auditor, issued a “disclaimer of opinion” on both EOFlow Co., Ltd.’s consolidated and separate financial statements for the first half of the year. The reasons cited include limitations on the scope of the audit of the opening consolidated statement of financial position, constraints on key review procedures, and uncertainty regarding the going concern assumption. The firm had also issued a disclaimer of opinion on the consolidated and separate financial statements for the first half of last year for the same reasons.
Trading in EOFlow Co., Ltd.’s shares has been suspended since March 21 of last year. With the confirmation of this failure to meet revenue requirements and the company’s state of full capital impairment, additional grounds have been added to the existing reasons for a substantive review of its listing eligibility.
Meanwhile, EOFlow Co., Ltd. announced today that it has changed the payment date for its 26 billion won third-party private placement, currently being pursued with IPV, from August 17 to September 15. The scheduled listing date for the new shares has also been postponed from September 9 to October 7. The court’s approval of the in-kind contribution was finalized on the 12th, and this change reflects the schedule for the transfer of patent rights.
