Tikforce is hoping its man in Kyrgyzstan comes through with cash
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HR software maker Tikforce is working with a Kyrgyzstan-based company to raise money, after two years of aggressive spending under-delivered on revenue.
After cancelling a $650,000 shortfall offer for a rights issue in January, Tikforce brought in East Star Capital to raise $400,000.
East Star Capital claims to have offices in Kyrgyzstan, Cyprus, Hong Kong, Australia, Dubai, Vietnam and the UK.
Only the Kyrgyz number was answered by a representative of the company when Stockhead called.
Two other phone lines were attended: the Vietnam number was answered by an old business partner who is not involved with the company; the Australian phone number was answered by a man who once had a single business meeting with East Star Capital.
On March 21, in a response to ASX questions, Tikforce said it hadn’t received any money from East Star Capital but that it should arrive by April 17.
Tikforce — which offers a service that performs background checks on employees — is bedevilled by problems such as shareholder requisitioned meetings trying to kick out the board.
As reported in Stockhead today, it is also being accused of defaulting on a convertible note and not telling the market when it loses contracts.
Stockhead is seeking comment from Tikforce and East Star Capital.
Running out of money
Tikforce is running short of cash and it’s unclear how the company funded itself in the March quarter.
Tikforce raised $73,292 from the rights issue in January.
At the end of December, Tikforce had just $176,000 left in the bank yet was expecting to spend $758,000 in the first three months of 2018.
The company itself is not yet capable of funding itself either.
The last three quarters saw payments from customers steady between $70,000 and $90,000, and the company has taken on no contracts offering a sizeable bump on that since December.
Two contracts, with mining giants AngloGold Ashanti (ASX:AGG) and Iluka (ASX:ILU), were signed in August and November respectively.
In the six months to December, Tikforce made sales revenue of $232,000, reported net liabilities of $879,000, and doubled its half year loss to $2.7 million.
Still waiting on cash
A convertible note for in November last year for $750,000 should have helped — but the holders are now demanding the company repay them in full.
The holders of that note, led by Tikforce’s now-ex corporate advisor Alignment Capital, claim the company is in default of that note because it lost a $1.9 million government contract and failed to fully carry out the rights issue, which it says the note was conditional on.
Tikforce said in a market disclosure in March the contract never existed.
Tikforce is now waiting on the first tranche of a second $2 million convertible note that it has signed with a Perth boutique advisory Regency Corporate.
Tikforce says the first $1.2 million tranche is due this week.