GetSwift Limited (ASX: GSW), a Delivery Management Software company, on 20 May 2019, released its response (provided on 13 May 2019) to ASX Appendix 4C queries.
Previously, on 26 April 2019, an unaudited Appendix 4C Report for Q3 ending on 31 March 2019, was submitted by GSW. There was an increase in the total revenue and other income by 197% to $1.085 million as compared to the previous corresponding period and 52% as compared to the previous December 2018 quarter. On 20 February 2019, GSW had notified to the market that it has acquired 2 North American based SaaS companies- Delivery BIZ Pro and Scheduling+.
By the end of the Q3 period, the net loss of the company stood at ~ $6.7 million. Also, a significant portion of the amount was assigned for technology staff growth along with the enhancement of R&D platform for the March 2019 quarter. Further, the company reported that the period had ended with a strong balance sheet holding with substantial cash and cash equivalents and term deposit of $74.4 million and zero debt.
ASX had sent a letter to the company on 10 May 2019 requesting for some information, and on 20 May 2019, GSW released the replies it has provided (on 13 May 2019) to the queries raised by the ASX, which are as follows:
GSW was asked by ASX, if it expects to have a negative operating cash flows for the time being and, if not, explain the reason for it. In Response, GSW stated that it expects to have a negative operating cash flow in June 2019 quarter.
GSW was also questioned about further or any other proposed steps to be taken by the company in case it is planning for raising cash or fund its operations. To which, GSW clarified that it had not taken any steps to raise further cash nor it has plans to raise any fund as it has access to $74.4 million of cash, cash equivalents, and bank term deposits.
Besides, ASX also wanted to understand the basis on which GSW would be able to continue its operations, as well as meet its business objectives. Answering the query, the company mentioned that it has a solid balance sheet, holding substantial liquidity with cash, cash equivalents and bank term deposits of $74.4 million and no outstanding debt as noted on 31 March 2019. Based on which, it is confident that it would be able to continue its operations as well as meet its business objectives.
Other than the above-mentioned queries, ASX also questioned GSW to provide further details on the recent two acquisitions made by the company, wherein it has spent around $6,615,000. In explanation, GSW highlighted that it had released an ASX announcement previously, where the details of the two strategic acquisitions in North America was provided.
Finally, the company was inquired to confirm that if it is complying with Listing Rule 3.1 or not. GSW was also asked to confirm that there is no information that should be given to ASX about its Financial Condition under that rule. In the reply, GSW established that it is compliant with the ASX Listing Rules 3.1 and there is no detail related to the company’s financial condition that should be offered to ASX.
The March 2019 Quarter’s summary of the cash flow statement are as follows:
|Net cash outflow from operating activities||A$5.877 million|
|Net cash outflow from investing activities||A$6.994 million|
|Cash and cash equivalents at the end of quarter||A$10.135 million|
|Estimated cash outflows for next quarter||A$6.975 million|
The shares of GSW closed flat at A$0.160 (as on 21 May 2019) on ASX. The company holds a market capitalization of A$30.16 million and approximately 188.52 million outstanding shares.
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