ASX-listed Melbourne tech company GetSwift has requested voluntary suspension in trading as it prepares responses to a report published in the Australian Financial Review over the weekend that questioned details around contracts and revenue figures announced by the company. It has been in a trading halt since Monday, with its shares last valued at $2.92.
Writing to the ASX this morning, the company stated, “As a result of recently receiving request for responses from ASX, the company hereby requests that its securities be placed into voluntary suspension pending a response being provided.”
The questions have been building for the company since it raised $75 million in an equity raise in early December off the back of a market announcement stating it had signed a deal with Amazon.
Stating at the time it had signed a “global agreement” but couldn’t reveal any further details or information due to the “highly sensitive nature” of the agreement with the ecommerce giant, GetSwift’s shares jumped 84 percent before trading on its shares was halted for a few days by the ASX.
With the company having already raised $24 million through a placement in June, the Amazon announcement and the subsequent raise – an over-subscribed round led by Fidelity International with shares priced at $4 each – led to a number of parties over the last month questioning the company’s financials and the results around a handful of the deals and contracts announced by the company.
The company had recorded only $336,356 in revenue in the year to June 30, on a loss of $1.92 million. It then posted $255,073 in revenue in the third quarter of 2017.
Highlighting the reasons for the concern, the AFR found GetSwift had failed to announce to the ASX that it had lost “materially significant contracts” and had “jumped the gun” on revenue forecasts on a partnership with the Commonwealth Bank, raising questions about other deals.
While GetSwift had announced it had signed multi-year deals with Fantastic Furniture and The Fruit Box Company, the AFR reported that they had not continued to used the company’s software beyond an initial trial.
Meanwhile, Commonwealth Bank told the AFR that GetSwift had “moved prematurely” in announcing revenue forecasts in December for a partnership that is still only in the trial stage.
GetSwift listed on the ASX in December 2016, with its shares initially priced at 20 cents per share.
Founded by Joel McDonald, the company was spun out of liquor delivery business Liquorun, which was incubated by BlueChilli. In running the business, McDonald found the last-mile logistics software powering Liquorun’s deliveries had more high-growth potential.
GetSwift then moved to New York for 18 months before being lured back to Melbourne by the Victorian Government.
Image: Bane Hunter and Joel McDonald. Source: Supplied.