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1-Page time bomb readies to blow, as board makes move to close down company
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Former 1-Page chief executive Joanna Riley is trying to take the company private in face of board plans to shut it down. Dominic Lorrimer
by
Yolanda Redrup
Time is running out for former backdoor listed tech star 1-Page, with the board readying to shut the company down following a corporate raid late last year.
The US-based human resources tech company requested a voluntary suspension from the ASX on Friday, pending an announcement in relation to a "disposal" of the company or its assets.
The suspension follows the company being placed in a trading halt earlier in the week, where it stated it was reviewing its strategy in light of a proposal to dispose of all or part of the business.
The Australian Financial Review understands that the board is negotiating with
recently-appointed chief executive Peter Kent and 1-Page founder and former CEO Joanna Riley, with Mr Kent and Ms Riley keen to take the company private.
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1-Page chief executive Peter Kent is working alongside Ms Riley in the plan to keep the company going.
A source with knowledge of the negotiations said Ms Riley and Mr Kent want 1-Page to remain as a listed company for another few months to give them time to prepare to take the business private, but the board is pushing for the pair to either go private immediately or shut the business down.
It is believed tensions had arisen over ongoing issues with the cash burn rate of 1-Page, with operating expenses still sitting at about $1 million a month, while revenue for the six months to July 31 was $827,133 – slightly down on the previous period.
If the business is shut down, it is likely that the board will hunt for a suitable local technology company to complete a backdoor listing into the 1-Page shell, with the remaining cash in the business going towards growing the new company.
1-Page, which has developed recruiting software, was the first example of an ambitious US tech startup to target Australian investors. Initially it looked like being a success story.
Listing in September 2015, its shares reached a high of $5.69, up
2745 per cent up on its 20¢ issue price in less than a year, giving it a market capitalisation of $762.2 million.
But
since then its shares have plummeted, halted at 16.5¢ and a market valuation of $25.4 million.
Corporate raid
In December
Merchant Funds Management began raiding 1-Page shares, buying up close to 10 per cent of the company.
At the time Merchant managing director Andrew Chapman attempted to orchestrate a shareholder coup, calling for a shareholder meeting to vote out various board members, before then voting again to decide whether or not to turn the company into a shell.
In January the company believed it had put a stop to the attempted takeover from Merchant, appointing Mr Chapman to the board of the company and replacing Ms Riley as chief executive with Mr Kent, who had previously been in the role of chief financial officer for 1-Page for only two weeks.
1-Page declined a request to comment on the trading suspension, but in an interview following his appointment Mr Kent had said he was confident the company could win back investor support.
"As the chairman, John Fennelly, has said, the board continues to support and is enthusiastic about the company's focus on providing talent-acquisition technology, removing the human recruiter from the equation," he said.
Mr Kent said his immediate focus was on tackling the sales momentum of the company and that shareholders could expect a clearer view on management's thinking.
"I'm a true believer in transparency and there will be a focus on being more transparent and more communicative," he said.
"My priorities for the year really are to bring alignment back to the various interests in the company, be those shareholders, the board, management or employees and to return to the factors of building a great business and value for shareholders. You do that through accelerating sales momentum and disciplined expense optimisation."
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