The ASX says GoConnect is not the kind of company they want to keep on the market — but the virtual reality minnow is fighting back after 18 months of stock suspension.

The company (ASX:GCN) failed to lodge its full year accounts on time in 2016 and has been suspended from trading since October that year.

GoConnect chairman Richard Li says they have met all accounting obligations up to September last year but the ASX still won’t let them back in.

The ASX alleges that GoConnect doesn’t spend any money on, or make any money from, its principle activities of virtual and augmented reality marketing, and developing a digital television network.

“Most of the company’s expenditure is in the nature of general overhead expenses (professional fees, employee benefits, office rents, listing expenses, travelling expenses, virtual internet service network operating costs and other expenses), and there does not appear to be any specifically identifiable direct expenditures incurred … on its principal activities,” ASX listing compliance senior adviser John Johansson said in a market release.

Further, Mr Johansson said in the statement that full year accounts for 2017 showed assets consisted of $4025 cash, while liabilities were $4.4 milion.

He noted that profit and revenue for both 2016 and 2017 were from the sale of shares in a subsidiary, and the ASX hasn’t been able to match the sale price of those shares with the value of the smaller business.

Mr Li says this is unfair and inaccurate.

‘Quite surprising to me’

“They say they cannot verify the sales of the shares or the price received. That is quite surprising to me because they were provided with full documentation, two documents supporting the sales which would also help them to verify the price received,” Mr Li told Stockhead.

“Anyone who has a calculator would be able to do that.”

He says the sale of shares in Go Green Holdings was verified by auditor RSM Bird Cameron, and the spending is indeed on their main business activity, as tech companies need employees, an office, and to travel to build networks to find clients and sell products.

“Perhaps it’s the inexperience of the ASX in dealing with technology businesses.”

Further, deals made in the first half of fiscal 2017 to pay down debt should see liabilities drop to $2 million.

Mr Li is particularly irate that the ASX says the company doesn’t have revenue attributable to their AR/VR business.

The subsidiary Go Green, he says, is the business. It’s the entity through which they are building “a substantial VR/AR social networking business”, and to do that they need strategic partners — the new owners of 56 per cent of the subsidiary — to open doors, and to minimise expenses.

That is why share sales in Go Green, he says, count as core revenue.

“We have repeated time and again about what the Go Green business is. Every time we get a new partner we tell the market what the business is and what the partnership is going to do [for GoConnect],” he said.

“Our auditors have advised that “other income” could be classified as revenue from ordinary activities. ASX was provided with a copy of this technical advice. How can ASX say we did not generate revenue in FY 2017?

“Here is an organisation that has decided that to state a number of non truths. Even Donald Trump is not allowed to do that.”