ASX-listed recruitment software start-up 1-Page is facing a potential board overthrow from shareholder Merchant Funds Management. The major shareholder believes 1-Page is not suitable for an IPO and is frustrated by their dwindling profits. They’re proposing a disbandment disband its board, with the hope of being able to organise a backdoor listing.
Merchant managing director Andrew Chapman first raised his concerns about the help of the company with 1-Page’s chief executive Joanna Riley and chairman John Fenelly in San Francisco this month. Chapman argued Riley should cancel her shares, but maintain the rights to the 1-Page intellectual property and technology, while the cash and company shell would stay with the shareholders.
This would allow the shareholders to attract another business that would take on the 1-Page shell.
Chapman told Australian Financial Review the start-up has “burnt through $20 million in two years trying to make it work and its revenue is a bit over $100,000 a month. I said to them if the business is good, surely they can raise money out of Silicon Valley."
"What we've proposed is a respectful winding down of it into a US-based company, rather than an ASX-listed firm. An orderly approach is better for everybody. You have to try and preserve some value in the overall business.”
1-Page’s H1 results revealed revenue was down 0.3% to $827.166 leaving them with a loss of $8.2 million after tax.
At this time it had $23.7 million in cash, and average monthly cash flow from operating expenses was just under $1 million.
Shareholders will meet in early 2017 to determine the fate of the company.