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GetSwift Reports Fiscal Third Quarter 2022 Financial Results and Provides Update Regarding Australian Legal Proceedings

·15-min read

NEW YORK, May 16, 2022--(BUSINESS WIRE)--GetSwift Technologies Limited ("GetSwift" or the "Corporation"; NEO: "GSW") has reported its financial and operational results for its fiscal third quarter of 2022, which ended March 31, 2022 and is pleased to provide an update with respect to the proceedings in the matter of Australian Securities and Investments Commission v. GetSwift Limited & others Federal Court of Australia VID 146 of 2019 ("the ASIC Proceedings").

Key Third Quarter and Subsequent Operational Highlights

  • The Board of Directors of the Corporation (the "Board") is continuing its process to identify, examine, and consider funding arrangements that are expected provide the Corporation with sufficient working capital in the short term, and the strategic opportunities available to the Corporation, in order to maximize value for shareholders in the longer term

  • Such strategic opportunities may include, but are not limited to, a corporate sale, merger or other business combination, a disposition of all or a portion of the Corporation’s assets, a recapitalization, refinancing of its capital structure, or any combination of the foregoing

  • As at March 31, 2022, the Corporation has been considering a definitive plan to sell its technology subscription service ("TSS") business in the US, which comprises its Software as a Service (SaaS) segment, including its intellectual property, which results in certain assets and liabilities being classified as held for sale and the TSS operations have been disclosed as discontinued operations in the financial statements and related management’s discussion and analysis of the Corporation for the interim period ended March 31, 2022

  • Pursuant to a share purchase agreement made on April 14, 2022 (the "Logo Sale Agreement") between GetSwift Inc. ("GSI"), a wholly owned subsidiary of the Corporation, and certain purchasers specified in the share purchase agreement (the "Logo Purchasers"), GSI agreed to sell to the Logo Purchasers and the Logo Purchasers agreed to purchase from GSI, all of the shares of Logo held by GSI in exchange for a cash payment in the amount of 300,000 Euros, the forgiveness of outstanding capital contributions owing by GSI to Logo with an aggregate value of 2,500,000 Euros, and the forgiveness of earnout amounts owing by GSI to the Logo Purchasers with an aggregate value of 1,250,000 Euros

  • In addition, GSI and the Logo Purchasers conditionally entered into a share purchase agreement made on April 14, 2022 (the "Logo Call Option Agreement"), pursuant to which GSI has agreed to purchase a 49% ownership interest in Logo from the Logo Purchasers in exchange for payment by GSI of aggregate consideration in the amount of 3,400,000 Euros on or before December 31, 2022. The entering into force of the Logo Call Option Agreement is conditional upon the execution of the Logo Sale Agreement and the registration of the Logo Purchasers as the owners of the shares of Logo sold by GSI pursuant to the Logo Sale Agreement

Management Commentary

"The fiscal third quarter of 2022 has been focused pursuing strategic options for financing GetSwift in the short and long term" said Joel Macdonald, interim CEO. "The sale of the Logo shares and the plan to sell TSS in the US is a big step forward to accomplishing these goals. The process is still very early and fluid, but the management team is working very hard to maximize shareholder value," Macdonald continued.

"We look forward to finding the right strategic partners in fiscal fourth quarter to complete these goals," Macdonald explained.

"The management team has been, and will continue to be, focused on working with Board members, consultants, and advisors to identify and engage in the best available options in the market. More importantly, once identified – GetSwift will move expeditiously to close as quickly as possible." Macdonald further added.

Third Quarter and the First Nine Months of 2022 Financial Results

Revenue for the third quarter of 2022 totaled $8.9 million, compared to $2.6 million for the third quarter of 2021. Revenue for the first nine months of 2022 was $29.3 million compared to the $15.4 million for the first nine months of 2021.

Total operating expenses for the third quarter of 2022 were $11.3 million as compared to total operating expenses of $6.4 million for the third quarter of fiscal 2021. Total operating expenses for the first nine months of 2022 was $39.1 million compared to the $29.5 million for the first nine months of 2021.

Total comprehensive loss for the third quarter of 2022 was $3.6 million, as compared to a total comprehensive loss of $4.3 million for the third quarter of fiscal 2021. Total comprehensive loss for the first nine months of 2022 was $13.0 million compared to the $11.9 million for the first nine months of 2021.

Cash inflow from operating activities for the third quarter of 2022 totaled $3.3 million compared to $5.2 million in the third quarter of fiscal 2021. Cash used in operating activities for the first nine months of 2022 was $5.4 million compared to the $9.7 million for the first nine months of 2021.

The information provided in this news release should be read in conjunction with the financial statements of the Corporation for the interim period ended March 31, 2022 and related management’s discussion and analysis, which are available under the Corporation’s profile on SEDAR at www.sedar.com.

Update Regarding the ASIC Proceedings

On December 20, 2021 a case management hearing was held. Orders were made that GetSwift Limited, Mr Hunter and Mr Macdonald pay 92.5% of ASIC’s costs of the proceeding. These costs have not been assessed and will not be payable until after the proceedings, including any penalty hearing, have finally concluded.

On February 18, 2022, GetSwift Ltd, Mr Macdonald and Mr Hunter filed appeals against the liability judgment. On May 16, 2022, Notices of Discontinuances were filed with the Court for GetSwift Ltd, Mr Macdonald and Mr Hunter to discontinue the appeal.

The matter will now be listed for a separate hearing in relation to whether any penalties should be imposed, including the extent and form of any penalties. At this stage, the Corporation cannot say when that hearing will occur.

About GetSwift Technologies Limited

Technology to Optimise Global Delivery Logistics

GetSwift is a technology and services company that offers a suite of software products and services focused on business and logistics automation, data management and analysis, communications, information security, and infrastructure optimization and also includes ecommerce and marketplace ordering, workforce management, data analytics and augmentation, business intelligence, route optimization, cash management, task management shift management, asset tracking, real-time alerts, cloud communications, and communications infrastructure (collectively, the "GetSwift Offering"). The GetSwift Offering is used by public and private sector clients across industries and jurisdictions for their respective logistics, communications, information security, and infrastructure projects and operations.

GetSwift is headquartered in New York and its common shares are listed for trading on the NEO Exchange under the symbol "GSW". For further background, please visit the Corporation’s profile on SEDAR at www.sedar.com and the Corporation’s website at www.getswift.co.

Forward Looking Information

Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws ("Forward-looking Information"). Forward-looking Information may relate to matters disclosed in this news release and to other matters identified in public filings relating to the Corporation, to the future outlook of the Corporation and anticipated events or results and may include statements regarding the future financial performance of the Corporation. In some cases, Forward-looking Information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking Information in this news release include statements related to short and long term strategic opportunities involving the Corporation and the timing, details, and outcome of the strategic review undertaken by the Board, and the type of strategic opportunity that may be pursued, and the outcome of the Notice of Discontinuances regarding the Australian Securities and Investments Commission v. GetSwift Limited & others Federal Court of Australia VID 146 of 2019, if any.

Forward-looking Information involves various risks and uncertainties and is based on certain factors and assumptions. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Forward-looking Information in this news release include, but are not limited to, statements with respect to: the availability of capital resources to the Corporation in the short and long term, the status of the Corporation’s evaluation of strategic opportunities, the evaluation of specific strategic opportunities, including the sale of the Corporation’s TSS business, and the Logo Sale Agreement, the Logo Call Option Agreement and the anticipated timing for completion of the transactions contemplated by such agreements.

Important factors that could cause actual results to differ materially from the Corporation's expectations include, without limitation, general market conditions, the ability of the Board to obtain short term financing to enable the Corporation to continue as a going-concern, the ability of the Board to identify strategic opportunities and of the Corporation to enter into agreements in respect of such strategic opportunities, the ability of the Corporation to complete the transactions contemplated by any strategic opportunity identified by the Board, the ability of management and the Board to dedicate resources to the strategic review and the effect of a strategic opportunity on maximizing shareholder value, the effect of the strategic review on maximizing shareholder value, the ability of the Corporation and the Logo Purchasers to complete the transactions contemplated by the Logo Sale Agreement and Logo Call Option Agreement, and the ability of the Corporation and Logo Purchasers to enter into and deliver the documentation required by the Logo Call Option Agreement.

The Corporation undertakes no obligation to update or revise any Forward-looking Information, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for the Corporation to predict all of them, or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any Forward-looking Information. Any Forward-looking Information contained in this news release is expressly qualified in its entirety by this cautionary statement.

GetSwift Technologies Limited

Condensed interim consolidated statements of financial position

As at March 31, 2022 and June 30, 2021

(In US dollars)

March 31

June 30

2022

2021

$

$

ASSETS

Current assets

Cash and cash equivalents

1,347,138

7,276,107

Trade and other receivables

12,240,531

5,438,149

Prepaids

957,535

2,520,151

Inventories

7,329,432

1,860,062

Other current assets

-

-

Assets held for sale

3,966,861

-

Total current assets

25,841,497

17,094,469

Non-current assets

Property, plant and equipment

3,364,661

1,598,650

Deferred tax assets

38,873

35,735

Goodwill and intangible assets

6,301,787

11,140,009

Other non-current assets

898,820

1,137,412

Total non-current assets

10,604,141

13,911,806

Total assets

36,445,638

31,006,275

LIABILITIES

Current liabilities

Trade and other payables

21,488,106

10,590,902

Line of credit

3,925,406

482,342

Contract liabilities

18,352

79,481

Warranty provisions

604,187

557,540

Employee benefit obligations

-

65,997

Lease and other current liabilities

638,405

457,246

Liabilities related to assets held for sale

2,820,397

-

Total current liabilities

29,494,853

12,233,508

Non-current liabilities

Deferred tax liabilities

669,014

858,220

Warranty provisions

397,010

283,680

Lease non-current liabilities

1,789,358

612,493

Total non-current liabilities

2,855,382

1,754,393

Total liabilities

32,350,235

13,987,901

EQUITY

Share capital

82,389,934

82,332,552

Other reserves

(1,639,028

)

314,409

Accumulated losses

(81,587,586

)

(69,910,131

)

Non-controlling interests

4,932,083

4,281,544

Total equity

4,095,403

17,018,374

Total liabilities and equity

36,445,638

31,006,275

GetSwift Limited

Condensed interim consolidated statements of income (loss) and other comprehensive loss

For the three and nine months ended March 31, 2022 and 2021

(In US dollars)

Three months ended March 31

Nine months ended March 31

2022

2021

2022

2021

$

$

$

$

Revenue from contracts with customers from continuing operations

7,864,889

1,552,486

26,300,450

12,292,227

Revenue from contracts with customers from discontinued operations

1,001,557

1,089,321

3,048,160

3,141,574

Total revenue

8,866,446

2,641,807

29,348,610

15,433,801

General and administrative expenses

(1,884,699

)

(2,486,212

)

(9,025,396

)

(10,848,341

)

Employee benefits expenses

(1,332,024

)

(1,001,600

)

(4,199,629

)

(3,557,401

)

Operating expenses

(5,709,927

)

(860,397

)

(18,851,215

)

(8,138,892

)

Share-based payment expenses

19,628

(24,569

)

(20,576

)

(86,722

)

Total expenses from continuing operations

(8,907,022

)

(4,372,778

)

(32,096,816

)

(22,631,356

)

Total expenses from discontinued operations

(2,399,909

)

(1,985,581

)

(7,047,871

)

(6,843,395

)

Total expenses

(11,306,931

)

(6,358,359

)

(39,144,687

)

(29,474,751

)

Other income

31,008

33,831

352,772

1,225,476

Other income from continuing operations

13,364

22,241

318,085

1,133,532

Other income from discontinued operations

17,644

11,590

34,687

91,944

Other gains(losses)

(960,752

)

581,786

(1,509,160

)

(5,284,380

)

Other gains(losses) from continuing operations

(953,374

)

(143,708

)

(1,496,346

)

(136,885

)

Net gain on disposal of property, plant and equipment

144

145

(16,708

)

176

Net foreign exchange losses

(55,255

)

(157,194

)

(269,964

)

(105,350

)

Other items

(898,263

)

13,341

(1,209,674

)

(31,711

)

Stock obsolescence

-

-

Other gains(losses) from discontinued operations

(7,378

)

725,494

(12,814

)

(5,147,495

)

Income (loss) before income tax

(3,370,229

)

(3,100,935

)

(10,952,465

)

(18,099,854

)

Income tax benefit/(expense)

60,292

51,568

(74,451

)

92,616

Loss for the period from continuing operations

(1,921,851

)

(2,890,191

)

(7,049,078

)

(9,249,866

)

Loss for the period from discontinued operations

(1,388,086

)

(159,176

)

(3,977,838

)

(8,757,372

)

Loss for the period

(3,309,937

)

(3,049,367

)

(11,026,916

)

(18,007,238

)

Other comprehensive income

Items that may be reclassified to profit or loss:

Exchange differences on translation from foreign operations

(271,912

)

(1,253,789

)

(1,990,744

)

6,070,247

Total comprehensive loss for the period from continuing operations

(2,193,763

)

(4,143,980

)

(9,039,822

)

(3,179,619

)

Total comprehensive loss for the period from discontinued operations

(1,388,086

)

(159,176

)

(3,977,838

)

(8,757,372

)

Total comprehensive loss for the period

(3,581,849

)

(4,303,156

)

(13,017,660

)

(11,936,991

)

Total comprehensive loss for the year is attributable to:

Owners of GetSwift Technologies Limited

(3,722,981

)

(3,947,887

)

(13,668,199

)

(11,369,304

)

Non-controlling interests

141,132

(355,269

)

650,539

(567,687

)

(3,581,849

)

(4,303,156

)

(13,017,660

)

(11,936,991

)

Loss per share for loss attributable to the ordinary equity holders of the company:

Basic/diluted loss per share from continuing operations*

(0.06

)

(0.09

)

(0.23

)

(0.30

)

Basic/diluted loss per share from discontinued operations*

(0.05

)

(0.01

)

(0.13

)

(0.28

)

* Reflects the retrospective application of the 7:1 exchange ratio

GetSwift Technologies Limited

Condensed interim consolidated statements of cash flows

For the three and nine months ended March 31, 2022 and 2021

(In US dollars)

Three months ended March 31

Nine months ended March 31

2022

2021

2022

2021

$

$

$

$

Cash flows from operating activities

Receipts from customers (inclusive of GST)

14,240,734

10,117,732

19,167,164

18,885,717

Payments to suppliers and employees (inclusive of GST)

(11,239,252

)

(3,931,278

)

(21,085,608

)

(23,667,307

)

R&D tax incentive received

-

3,212

-

165,829

Income taxes paid

-

-

(355,760

)

(355,760

)

Interest paid

(40,664

)

(97,332

)

(109,100

)

(22,922

)

Interest received

(17,639

)

94,250

(23,227

)

1,484

Total cash inflow (outflow) from operating activities from continuing operations

2,943,179

6,186,584

(2,406,531

)

(4,992,959

)

Total cash inflow (outflow) from operating activities from discontinued operations

316,715

(1,007,588

)

(2,964,592

)

(4,690,914

)

Total cash inflow (outflow) from operating activities

3,259,894

5,178,996

(5,371,123

)

(9,683,873

)

Cash flows from investing activities

Payments for property, plant and equipment

(147,894

)

2,684

(966,095

)

(138,106

)

Net cash inflow (outflow) from investing activities

(147,894

)

2,684

(966,095

)

(138,106

)

Cash flows from financing activities

Proceeds from issues of shares

-

-

-

489,859

Financing costs for LDA facility

-

-

-

(300,000

)

Restrinction for letter of credit

-

566,609

-

(424,955

)

Proceeds from line of credit

-

-

5,811,544

2,106,751

Repayment of line of credit

(2,248,830

)

(420,329

)

(2,368,480

)

(2,668,758

)

Principal elements of lease payments

(64,902

)

(24,242

)

(419,323

)

(91,483

)

Net cash inflow (outflow) from financing activities

(2,313,732

)

122,038

3,023,741

(888,586

)

Net (decrease) in cash and cash equivalents

798,268

5,303,718

(3,313,477

)

(10,710,565

)

Cash and cash equivalents at the beginning of the period

1,459,868

7,432,121

7,276,107

23,300,583

Effects of exchange rate changes on cash and cash equivalents

(516,906

)

(892,419

)

(2,221,400

)

(746,598

)

Assets held for sale

(394,092

)

-

(394,092

)

-

Cash and cash equivalents at end of the period

1,347,138

11,843,420

1,347,138

11,843,420

View source version on businesswire.com: https://www.businesswire.com/news/home/20220516005389/en/

Contacts

For further information regarding the Corporation:

U.S. Investor Relations:
Chris Tyson
Executive Vice President – MZ North America
Direct: 949-491-8235
GSW@mzgroup.us
www.mzgroup.us

GetSwift Investor Relations:
investors@getswift.co

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