iBosses stiffed for $2m in not one, not two — but three failed deals
Entrepreneur coach iBosses has lost more than $2 million in three separate failed deals in the space of two months.
Singapore-based iBosses (ASX:IB8) — which has been suspended from trade since July for failing to file its full-year accounts — lost almost all of $2.25 million in payments it made earlier this year for services that were never provided.
The three deals were made in March and April. An “extremely disappointed” iBosses reported the losses to investors in September.
Three failed deals in two months
On March 16, iBosses made a $S400,000 ($377,000) payment to CIO Global to develop a chief information officer course.
CIO Global did not do the work and iBosses says it’s been unable to claw back any of the payment.
Intriguingly iBosses bought a 30 per cent stake in CIO Global in July last year for $S300,000 — and sold up in December for $S500,000.
On April 8, iBosses paid CFO4Biz $S350,000 to develop a digital finance course. Again the work didn’t appear. This time, iBosses managed to claw back $S50,000.
Oddly, CFO4Biz operates out of the same office in the same Singapore building as CIO Global.
On April 12, iBosses paid AltLearning $S1.5 million for a junior entrepreneur course. Again, iBosses got stiffed — managing to get a refund of just $S50,000.
iBosses and AltLearning operate in the same Singapore office space in Singapore — Number 03-01, Annexe B, MND Building, 7 Maxwell Road.
Stockhead asked iBosses whether there were other relationships between iBosses and the three companies.
Chief executive Patrick Khor told Stockhead “all disclosures have been made in the iBosses annual report that will be lodged later this month [October]”.
iBosses says it’s seeking legal advice and is hopeful of getting its money back.
A challenging two years
Mr Khor says the payments were recorded in the June quarterly report.
The losses from the three deals total $2.15 million — almost exactly its $2.2 million revenue for the year to March 31.
A $3.375 million fundraising attempt in March failed.
At the start of January, iBosses had $1.6 million in cash, thanks to the sale of its CIO Global stake, a $700,000 private placement and receipts of $88,000.
At the end of the first quarter it had $915,000 in cash after making $933,000 mostly from investments but spending $1.1 million on intellectual property.
By the end of the third quarter it had $401,000 in cash after making $1.9 million, again mostly from investments. It spent $2.2 million on non-current assets in the period.
Listed as a start-up
iBosses floated on the ASX in 2015 as a one-year-old start-up that had yet to crack $100,000 in revenue.
The initial public offering sought $5 million in 20c shares but ended up banking $2.7 million — a couple of hundred thousand dollars above its minimum.
Mr Khor’s company Inkkey Investments controlled 66.3 per cent, but 94.2 per cent of the register was owned by the top 20 shareholders — 17 of which were Asian individuals and investment vehicles.
At the time iBosses had three clients and noted its high costs and licensing fees could be an impediment to signing up more clients.
Since then it’s entered 22 deals with a variety of education organisations across Asia.
iBosses has converted those into 10 licensing deals — six after its shares were suspended in July when it failed to lodge full year accounts.
However, those deals make no mention of the fees iBosses would receive, the number of students or what the courses would cover.
Letter from the corporate watchdog
In late September iBosses said the Australian corporate watchdog had refused it leave to sell shares without providing a prospectus.
Until September 17, 2018, iBosses is not allowed to sell shares without a disclosure document because of a discrepancy in its full year accounts which is preventing iBosses from lodging them.
Stockhead asked iBosses what the determination related to, but Mr Khor did not provide any details.
Last week, 98 million shares came out of escrow.
As at March 31 the company had 116 million shares on issue. This has almost doubled the share base of the company.