Its Over, page-13943

Today Livetiles (LVT) crashed 50% on announcement of its Voluntary Delisting, the first I have ever heard.

If you recall, LVT has been one of my featured Falling Knives stocks a couple of years ago.

Whatever its decision, management never thought carefully for its shareholders.

LiveTiles announces voluntary delisting LiveTiles Limited (ASX:LVT) (LiveTiles or the Company), has submitted a formal request to the Australian Securities Exchange (ASX) to be removed from the official list of the ASX (Official List) pursuant to ASX Listing Rule 17.11 (Delisting).

This formal request follows the receipt of in-principle approval from ASX in relation to the proposed Delisting, subject to the satisfaction of the conditions set out below. The Delisting would mean that the Company’s shares would no longer be quoted on the ASX.

The Delisting will be put forward for shareholder approval at a general meeting to be held on or around 5 September 2022.

The Delisting is considered by the Company’s Board (Board) to be in the best interests of the Company for a number of reasons, including underperformance of the trading price of the Company’s shares, relatively low levels of trading liquidity and a number of flow on consequences which are set out below.

These factors, as well as the costs and administrative burden of remaining listed on ASX, outweigh the benefits associated with remaining listed. Reasons for seeking removal from the Official List The Company’s reason for seeking removal from the Official List is that the Directors believe that the Company and its shareholders do not benefit from being publicly listed for the following reasons:

(a) Company valuation: The Board considers that the trading price of the Company’s shares in recent years implies a valuation that has been (and remains) consistently and materially lower than the valuations of unlisted companies of a comparable nature and stage to LiveTiles. The Board is confident that the Company’s valuation has a greater prospect of growing towards the Board’s assessment of fair value as an unlisted company. In addition, the Company’s undervalued share price has flow on consequences as set out in paragraphs (b) to (d) below.
(b) Capital raising: Whilst LiveTiles is well funded and has no intention to raise equity capital in the near term, if the Company seeks to raise further growth capital in the future whilst listed on ASX, this would likely impose a higher dilutionary cost on non-participating shareholders than if the Company was more fairly valued. The Board also considers that the Company will have access to a much broader universe of technology-focused, global institutional investors as an unlisted company including those who are unable to invest in ASX-listed companies due to investment mandates.
(c) Strategic and corporate opportunities: The Board considers that the Company will have greater flexibility to pursue and execute value enhancing strategic opportunities and corporate transactions as an unlisted company.
(d) Employees: The volatility in the Company’s share price and (in the Board’s opinion) the disconnect between the Company’s share price and its fair value have impacted the Company’s ability to attract high quality employees. Delisting may improve the Company’s perception as a more attractive employer and promote employee retention, given the Page 2 impact share price and illiquidity can have on an employee’s decision to join or remain at the Company and any incentive arrangements. Attracting and retaining employees would assist the Company in delivering its Product Strategy and drive incremental sales growth (see paragraph (f) below).
(e) Illiquidity: Notwithstanding the Company’s ASX listing, trading in the Company’s shares has been relatively illiquid which has contributed to high volatility in the Company’s share price. Low liquidity has also limited the Company’s ability to secure broad institutional ownership Further, low trading liquidity and the associated volatility has the potential to adversely impact capital markets transactions.
(f) Product strategy: The Company has an opportunity to rationalise and reposition its portfolio of software products (some of which have been acquired) to drive incremental sales growth and strategic value over the medium term. The Board believes that pursuing this strategy whilst under the pressure of quarterly financial reporting cycles may lead to increased volatility in the Company’s share price.
(g) Costs: The Company believes that the ongoing administrative, compliance and direct costs associated with the Company’s ASX listing are disproportionate to the benefits of remaining listed.

Consequences for the Company and its shareholders
Some of the key consequences for the Company and its shareholders if the Company is removed from the Official List include:
• the Company’s shares will no longer be quoted on the ASX and will no longer be traded on the ASX;
• the Company’s shares will only be capable of sale via off-market private transactions which will require the Company’s shareholders to identify and agree terms with potential purchasers of the Company’s shares in accordance with the Company’s Constitution and the Corporations Act 2001 (Cth) (Corporations Act);
• as an unlisted public company, the Company will no longer be able to raise capital from the issue of securities to the public by means of limited disclosure fundraising documents;
• for as long as the Company has at least 50 members the Company will remain subject to the “takeovers” provisions of the Corporations Act;
• for as long as the Company has at least 100 members, it will be classed as an “unlisted disclosing entity” under the Corporations Act and therefore be subject to the “continuous disclosure” obligations in section 675 of the Corporations Act which are substantively the same as those imposed under section 674 of the Corporations Act and ASX Listing Rule 3.1. The Company will still provide disclosure to shareholders of material matters in accordance with the Corporations Act on the Company’s website. The Company will also continue to lodge annual and interim financial statements (audited and auditor-reviewed, respectively) in accordance with the Corporations Act;
• a reduction of obligations associated with a listing on ASX, which may include relief from some reporting and disclosure requirements, removal of restrictions on the issue of shares by the Company and requirements concerning significant changes to the Company’s activities; Page 3
• the ASX Listing Rules and ASX Corporate Governance Principles and Recommendations will no longer be applicable to the Company. The Company will still be governed by the Corporations Act; and
• the Company’s Constitution and, therefore, shareholders’ rights will remain unchanged immediately following the Delisting, such that shareholders will continue to have the right to: o receive notices of meetings and other notices issued by the Company; o exercise voting rights attached to shares; and o receive dividends payable by the Company from time to time.