GeoOp quits planned ASX IPO, gets more shareholder funding
By Paul McBeth
Oct. 17 (BusinessDesk) - GeoOp has quit plans for an initial public offering and Australian listing after reaching an
impasse with the Australian Securities Exchange, and will instead stay on the NZAX and rely on cornerstone shareholder
North Ridge Partners for funding.
Earlier this year shareholders of the unprofitable management app developer backed plans to raise at least A$2 million
in an IPO and list on the ASX, but the company was told earlier this month it needed more capital to meet the Australian
stock market operator's requirements. Rather than change tack, GeoOp instead secured up to NZ$1.5 million from North
Ridge through a two-year convertible note and will resume trading on the NZ Alternative Market.
"We have spent considerable time and effort to work through these matters, but ultimately have been unable to reach an
outcome that addressed ASX requirements without materially changing the offer or restricting GEO's operational plans,"
chair Roger Sharp said in a statement. "We are disappointed but resolute and will continue to build this business."
GeoOp went public in 2013, selling shares at $1 apiece in a private offer before its compliance listing on the NZAX. The
stock last traded on the NZAX at 22 cents before undertaking a two-for-one share consolidation in July which sees it
listed at 44 cents. At the time, GeoOp said that was needed to meet the ASX's minimum share price of 20 Australian
The move to an ASX listing would have followed its business across the Tasman where it generates 60 percent of sales and
its management team already operate.
The company today said it's "progressively" cutting costs and anticipates cash burn to "reduce materially in the coming
months" once the development of a new enterprise platform and product upgrades are completed. It will give a horizon to
break even when it releases first-quarter results in November.
The convertible note is expected to fund GeoOp's operations for the rest of the 2018 financial year and subject to
shareholder approval will convert to equity or be repaid when the company raises equity in calendar 2018.
"The company's intention is to offer all shareholders the opportunity to participate in its next equity issue in the
expectation that the majority, if not all, of its convertible note facilities will be converted to equity," it said. A
vote on the conversion will be held at the annual meeting later this year.