GetSwift spent almost $5m on lawyers and admin last quarter
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Troubled tech stock GetSwift spent almost $5 million on legal defence and admin costs last quarter — double the amount it spent in the previous quarter.
GetSwift — which provides supply chain management systems — has faced “some major challenges” in the past year, as chairman Michael Fricklas described it in last week’s annual report.
“Our stock price soared and then fell, resulting in shareholder losses, inquiries from regulators and challenges from class action lawyers,” Mr Fricklas said in the report.
“We have been required to pay close attention to these matters, which has consumed management attention and raised concerns for customers and shareholders alike.”
This morning Getswift issued its September quarter cash statement, showing a slight increase in quarter-on-quarter customer receipts to $272,000 — and a steep increase in cash burn.
Getswift burned $7.3 million last quarter including $4.8 million in admin and corporate costs.
That’s up from $4 million in operating costs last quarter including $2.3 million in admin.
And the cash-burn is set to continue. This quarter GetSwift is budgeting to spend another $7.5 million of the $28.7 million available in cash and cash equivalents at the end of September.
Legal costs accounted for a large slab of the increased costs.
“Administration and corporate costs continue to be significant expenditures due to legal defence costs and increased governance expenses, together approximately 35 per cent of the company’s gross expenses for the quarter,” GetSwift told investors this morning.
“These expenses include costs for defending proceedings before the Federal Court of Australia.
“The company has been defending and will continue to vigorously defend these proceedings, and if the company prevails, will aggressively pursue the return of any costs in addition to other damages it may be entitled to.”
Net loss for the quarter came in at $4.8 million.
Less than a year ago in December 2017 GetSwift raised $75 million at $4 per share.
The stock gained 4 per cent to 53.5c.