LIFX Still Trading As Bidders Get Cold Shoulder From Receivers
Buddy Technologies the manufacturer of LIFX smart lighting and control systems, is still being managed by receivers with no indication yet of what is going to happen with the Company that posted a net six-month loss of $49.4M back in April 2022. According to retailers JB Hi Fi and Bunnings “Its business as usual” with one buyer declaring that he has not heard from the receivers. We have also been told that several interested parties who were looking to fund or buy the LIFX operation of Buddy Technologies have failed to get a response from the receivers Christopher Hill and David McGrath of FTI Consultants who took over as managers of Buddy, pursuant to security held by Partners for Growth (PFG). At the time, the business only had $1.3 million in cash, and $24.7 million in liabilities, with negative working capital of $7.1 million and a net liability position of $6.4 million.
Shortly afterwards several interested parties who were keen to run a ruler over the books approached the receivers but claimed they “never got a response”.Also, back in April, the reviewers indicated that they were set to commence a process seeking offers for a sale or recapitalisation of the group and anticipated indicative offers being sought from interested parties from early May 2022. We are now into June 2022 and according to two parties who approached FTI Consultants, they are still waiting for a response from the receivers. We also understand that shareholders are asking questions as to what is happening with the business, who is funding the business and whether a sale of the business is set to be put to the market Buddy said the appointment of FTI Consultants as receivers would see them take control of the company’s assets, shares in its subsidiaries, undertaking and operations.
The receivers were not appointed to any of Buddy’s operating subsidiaries, which are the primary operating entities within the group. In their last financial report Buddy who saw their shares suspended prior to the receivers being appointed said that $16.1m of its current liabilities are due and payable in December 2023 and May 2024’’.This money is owed to venture debt firm Partners for Growth, who “continually engaged with, and continues to engage with BUD on a regular basis in relation to BUD’s financial and operational performance and remains supportive.’’They are also in open dialogue with the receivers however interested parties to the business appear to be given the “run around” according to one source.Another major smart home accessory supplier to Australian British and US retailers said “We have approached the receivers to get an insight into the financials as we are interested in the LIFX brand. Nothing is broken with this brand and the reason that the Company is in a mess is because of poor management and a lack of funding”.PFG has indicated it does not currently plan to take any enforcement action against the subsidiaries of Buddy Technologies.There was no mention of obligations to shareholders in the Company. Just before they called in the receivers Buddy Technologies appointed Mark Sacco as its new Chief Financial Officer, Martin Carroll was also appointed as Chief Revenue Officer. Buddy has said that they intended to draw down against current facilities that is currently in place, so they can meet day-to-day obligations. Buddy is an internet of things (IoT) and cloud-based technology company, who use the LIFX brand to market smart lights which they claim is used in nearly one million homes. Their products are still being sold at Bunnings, Amazon, Google, and JB Hi-Fi.BUD shares were suspended and last traded at 0.6 cents.
BUD Price at posting:
0.6¢ Sentiment: None Disclosure: Held
