As we wrote yesterday, speculative technology company Getswift Ltd (ASX: GSW) had requested a voluntary suspension while it provided a response to ASX queries regarding allegations of lost contracts. Getswift was expecting to return to trade this morning following its responses to the market, however the ASX formally suspended Getswift, stating that the suspension would continue "pending continued inquiries from ASX".
The ASX asked Getswift numerous questions regarding its contracts with Fantastic Furniture, BETTA Home Living, The Fruit Box, Commonwealth Bank of Australia (ASX: CBA), the structure of the contract and fees, whether Getswift was earning revenues from these contracts, and whether it considered these contracts to be material.
According to Getswift, the Fruit Box contract was not material and did not contribute to revenues as the contract ended after the initial trial period, which was around 20 March 2017 – approximately one month after the contract was first announced. Getswift says that it does not believe the contract was material because:
a) the share price movement following the Fruitbox announcement suggested that the market did not consider it to be a significant transaction; and
b) at the time that Fruitbox sought a release from its agreement, GSW was finalising its agreement with CBA, which was a significant transaction and due to be announced to the market shortly thereafter thus putting the nature and size of the Fruitbox transaction in a different light.
However, Getswift also avoided questions regarding the nature of the Commonwealth bank contract. When asked "Has the CBA agreed to adopt the Getswift Application?" Getswift responded:
"GSW (Getswift) has no reason to believe that CBA will not use the GSW platform."
Additionally the company avoided answering the ASX's question requiring justification for Getswift's forecasts of 257 million deliveries over the next 5 years from the Commonwealth Bank contract, with revenues beginning in mid-2018.
Getswift also stated that the cancellation of the Fantastic Furniture contract was not material, because, while the Fantastic Furniture and BETTA Home Living contracts together were material, on their own they were not. Getswift also stated that it had not been notified of any contract cancellations other than those discussed in today's announcement, and that it was complying with its continuous disclosure obligations.
However, it seems as though the ASX was dissatisfied with Getswift's responses as it suspended the company under listing rule 17.3. Getswift's original suspension was under listing rule 17.2 – voluntarily, at the company's request. Listing rule 17.3 means that the ASX has suspended the company unilaterally. This potentially means that Getswift will be required to make further submissions to the ASX, and we will have full coverage of those as they come out.
