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ApplyDirect Limited (ASX:AD1), Provider of an online database and search platform for e-recruitment company, has published its financial services guide.
BDO Corporate Finance (East Coast) Pty Ltd had been engaged to provide an independent expertâs report to the non-associated shareholders of AD1 in relation to the proposed acquisition of 100% of the issued share capital in Utility Software Services Pty Ltd (âUSSâ) for all-scrip consideration and a placement of fully paid ordinary shares. BDOCF is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International).
The Key Parties involved in the Proposed Transaction are AD1 and USS. USS is an entity that is controlled by Mr Michael Norster, who is also a Director of AD1. USS is a privately-owned company. Its services include IT consulting, Business Process Outsourcing (BPO) and implementation of programming systems and business solutions.
Potentate Investments Pty Ltd, an investment entity controlled by Mr Norster, currently, is the largest Shareholder in AD1 owning 11.51% of issued shares. Associates of Potentate include Mr Christopher Kuperman (a shareholder of USS) and Mr Andrew Henderson (a director of USS). Collectively, Potentate and Associates currently own 12.18% of AD1âs shares.
On 26 November 2018, AD1 announced that it had signed a non-binding term sheet in relation to the proposed business combination with USS and that it was considering a capital raising by way of a placement of new fully paid ordinary shares. On 3 January 2019, AD1 announced that it had signed transaction documents for the Proposed Acquisition and that it had received binding commitments in relation to the Proposed Placement from Potentate and Associates.
The share purchase agreement dated 3 January 2019 in relation to the acquisition of USS provides the following commercial terms: Total consideration with a notional value of $3.588 million, payable entirely by way of issuing 132.9 million new fully paid ordinary shares in AD1 at an assumed value of $0.027 per share and Retained cash of $850,000 to fund working capital (which includes a one-off tax liability).
AD1 generates revenue from multiple sources, including: (1) Managed Services revenues, which include fees paid by employers for the hosting and maintenance of their AD1 powered recruitment marketing platforms and the provision of related digital marketing services. (2) Project revenues, which relate to the initial development and implementation of recruitment marketing platforms and subsequent functionality enhancements and new e-recruitment integrations. (3) Digital media & advertising revenue, which includes fees for AD1 conducting marketing campaigns by generating visits to a customerâs advertisements placed on AD1âs platforms.
Following the Companyâs strategic pivot, AD1âs FY18 revenue increased by 119% driven by project-related revenue from the existing contract with the NSW Government and new contract wins from the VIC Government, among others. AD1 closing cash balance at the end of Q1FY19 was $2.187m, down from $2.729m in the previous quarter.
The stock of the company last traded at A$0.017 (as at 15 February 2019) with the market capitalization of circa A$4.36 million with approximately 256.3 million shares outstanding.\
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