GTH
Gathid LTD
ASX
Update on Expected Cash Balance 30 June 2024
Sentiment:
Release to ASX
20 June 2024 7:12 PM
Gathid Ltd anticipates a lower cash balance of approximately $7.5 million at the end of June 2024, compared to the previously targeted $8 million, primarily due to a delay in receiving the FY23 R&D Tax Incentive claim.
Worse than expected
The expected cash balance is lower than the previously announced target.
Delay expected
The FY23 R&D Tax Incentive claim will be received after 30 June 2024.
The FY23 income tax return submission is delayed due to the expert determination process.
Summary
- Gathid Ltd expects its cash balance at 30 June 2024 to be around $7.5 million.
- This is lower than the previously announced target of over $8 million.
- The primary reason for the shortfall is a delay in receiving the FY23 R&D Tax Incentive claim.
- The R&D claim is expected to be received a few weeks after the company's FY23 income tax return is submitted.
- The submission of the tax return has been delayed due to the ongoing expert determination of the sale price for the divestment of the physical security business lines.
- The R&D claim refund will be received after the ATO review is complete.
Sentiment
Score: 4
Explanation: The announcement is slightly negative due to the lower expected cash balance and delays in receiving the R&D tax incentive. However, the company is transparent about the reasons for the shortfall.
Negatives
- The expected cash balance at 30 June 2024 is lower than previously anticipated.
- There is a delay in receiving the FY23 R&D Tax Incentive claim.
- The submission of the FY23 income tax return has been delayed.
Risks
- The expert determination process for the physical security business divestment could face further delays.
- The ATO review of the tax return could take longer than expected, further delaying the R&D claim refund.
- The actual cash balance at 30 June 2024 could be lower than $7.5 million if unforeseen expenses arise.
Future Outlook
The company anticipates receiving the FY23 R&D Tax Incentive claim a few weeks after submitting the FY23 income tax return, pending ATO review.
Management Comments
- Management was aiming to retain a cash balance in excess of $8,000k as at 30 June 2024.
- The Board now expects the closing cash balance at 30 June 2024 to be closer to $7,500k.
Industry Context
Delays in R&D tax incentive claims can impact cash flow for companies, particularly those reliant on government support for innovation. This announcement highlights the importance of managing expectations around the timing of such incentives.
Comparison to Industry Standards
- It's difficult to compare this specific situation to industry standards without knowing the size and nature of Gathid's R&D activities and the typical processing times for R&D tax claims in Australia.
- Generally, companies like Xero or Atlassian, which heavily invest in R&D, closely monitor their R&D tax incentive claims as they can significantly impact their financial performance.
- Delays in these claims can lead to adjustments in short-term financial planning, similar to what Gathid is experiencing.
Stakeholder Impact
- Shareholders may react negatively to the lower expected cash balance.
- Employees may be concerned about potential impacts on company operations.
- Creditors may reassess the company's financial stability.
Next Steps
- Complete the expert determination process for the physical security business divestment.
- Submit the FY23 income tax return.
- Await ATO review of the tax return.
- Receive the FY23 R&D Tax Incentive claim refund.
Key Dates
- 14 November 2023: Date of the Annual General Meeting where the initial cash balance target was announced.
- 30 June 2024: Date for the expected cash balance update.
Keywords
cash balance, R&D Tax Incentive, expert determination, FY23, Gathid Ltd
GTH
Gathid LTD
ASX
Sector: Software & Services
Filings with Classifications
Better than expected
16 April 2025 7:19 PM
Quarterly Activity Statement & Business Update
- The company's ARR growth of 142% indicates better than expected performance compared to the end of FY24.
Delay expected
23 January 2025 10:41 PM
Quarterly Report
- The company is waiting for the resolution of a dispute over the sale of its physical security business before relisting on the ASX.
- The audit opinion in respect of the FY24 Financial Statements may require further actions by the ASX before any relisting takes place.
Better than expected
23 January 2025 10:41 PM
Quarterly Report
- The company's ARR growth of 12% in the quarter and 92% since the end of FY24 is better than expected.
- The company secured two new customer contracts and maintained a high renewal rate, which is better than expected.
- Sales revenue increased from $272k to $390k, which is better than expected.
Worse than expected
21 November 2024 5:50 PM
AGM Results
- The 'first strike' against the remuneration report indicates that the company's compensation practices did not meet the approval of a sufficient number of shareholders.
Worse than expected
20 November 2024 11:15 PM
Annual General Meeting Results
- The rejection of several key resolutions, including the remuneration report, incentive plan, and placement facility, indicates worse-than-expected results from the AGM.
Capital raise
20 November 2024 11:15 PM
Annual General Meeting Results
- The rejection of the 10% placement facility suggests that securing additional capital may be more challenging than anticipated.
Delay expected
20 November 2024 8:05 PM
Annual Report Presentation
- The finalization of the sale of the RightCrowd businesses has been delayed due to an ongoing dispute with the buyer, Bloom.
- The audit of Gathid's FY24 financial accounts has been delayed due to Bloom's failure to provide necessary documents to the auditors.
Worse than expected
20 November 2024 8:05 PM
Annual Report Presentation
- The company's overall profit was driven by the sale of its RightCrowd business, masking a significant loss from its core Gathid business.
- The ongoing dispute with Bloom regarding the sale of RightCrowd and potential further claims creates significant uncertainty and financial risk.
- The auditors' inability to provide an unqualified opinion on the financial statements due to lack of access to information from Bloom indicates a significant shortcoming in the financial reporting process.
Delay expected
4 November 2024 8:00 PM
Quarterly Report
- The finalization of the sale of the physical security business has been delayed due to a dispute over the final payment calculation, impacting the company's ability to provide the ASX with the required information for relisting.
Worse than expected
4 November 2024 8:00 PM
Quarterly Report
- The unresolved dispute regarding the final payment from the sale of the physical security business represents a significant negative deviation from expectations, creating uncertainty and delaying the company's ASX relisting.
Worse than expected
18 October 2024 1:15 AM
Suspension Notice
- The announcement details numerous companies failing to meet reporting deadlines, resulting in potential delisting, which is significantly worse than expected performance.
Capital raise
16 October 2024 6:58 PM
Notice of Annual General Meeting
- The company is seeking shareholder approval for a 10% placement facility, allowing it to issue equity securities up to 10% of its issued share capital over a 12-month period.
Delay expected
30 July 2024 12:04 AM
Quarterly Activity Statement
- The resolution of the dispute over the consideration due for the sale of the physical security businesses is delayed.
Worse than expected
10 July 2024 2:15 AM
Market Announcement Long Term Suspended Entities
- The document indicates that numerous companies have failed to meet their reporting obligations, which is worse than expected for market compliance.
Delay expected
10 July 2024 2:15 AM
Market Announcement Long Term Suspended Entities
- The document lists numerous companies that have delayed lodging required periodic reports.
Worse than expected
20 June 2024 7:12 PM
Release to ASX
- The expected cash balance is lower than the previously announced target.
Delay expected
20 June 2024 7:12 PM
Release to ASX
- The FY23 R&D Tax Incentive claim will be received after 30 June 2024.
- The FY23 income tax return submission is delayed due to the expert determination process.
Delay expected
19 April 2024 3:11 AM
Business Update
- The expert determination process regarding the dispute with Bloom is ongoing.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.