SYDNEY: Applyflow Limited (ACN 107 371 497) (ASX:AFW), a global HR technology provider, has announced a conditional agreement for the sale of its Applyflow business.
The sale will transfer all issued capital of Applyflow International Pty Ltd to an entity led by the acting CEO, Richard Swanton, in a management buy-out (MBO).
This decision follows Applyflow Limited’s announcement on March 12, 2024, regarding its intent to acquire the Fairfield Copper and Fintry REE Projects in Canada, signaling a significant pivot in the company’s focus.
The MBO, which involves the disposal of the company’s main undertaking, will require shareholder approval in accordance with ASX Listing Rule 11.2.
The necessary approval is set to be sought at a general meeting slated for late May 2024, where shareholders will also consider the proposed acquisition and the company’s re-compliance listing on ASX.
Applyflow International, the parent entity of the Applyflow business, has been operating through subsidiaries in Australia, the UK, and the USA since its acquisition by Applyflow Limited in 2020.
The company’s core activities include the sales and development of the Applyflow cloud-based SaaS platform, which caters to recruitment management and market needs.
Despite efforts to optimize operations and reduce costs, including the appointment of Richard Swanton as acting CEO and the launch of ApplyflowX, the Applyflow business has remained cash flow negative.
The company’s quarterly report dated January 30, 2024, revealed customer receipts of approximately $749K against net cash outflows from operating activities of $175K for the quarter.
The terms of the MBO place the effective consideration for the company at approximately $1.2 million. While the purchase price is a nominal $1, the buyer will assume all liabilities of the Applyflow business, estimated at $1,698,823, including accrued employee entitlements.
The buyer will also retain all assets, excluding cash, with an estimated value of $158,000 at completion. Additionally, the Applyflow business is expected to be sold with approximately $344,000 in working capital, subject to adjustments based on actual revenues and costs.
The proposed sale marks a pivotal moment for Applyflow Limited as it seeks to reshape its business strategy and explore new ventures in the mining sector.
