Receivers called in to sunken ASX software minnow LiveTiles

Melbourne-founded, New York-headquartered employee experience software company LiveTiles (ASX: LVT) has called in receivers and managers almost a decade after its founding in 2014, following a tumultuous period involving two CEO departures, an exit from R&D partnerships, a slump in revenue, and layoffs.

LiveTiles' share price has slid from $0.032 at the start of the year to $0.005 in its most recent trade, representing a market capitalisation of $6.47 million for a company with more than 900 enterprise-class customers, 64 of whom were acquired in the past year.

After co-founder Karl Redenbach announced his exit as CEO last year, former Salesforce executive David Vander took charge in February and has continued aggressive right-sizing measures that reduced costs by 36 per cent in FY23, although revenue dropped in turn by 42 per cent to $36 million.

At the company's annual general meeting (AGM) in late November, Vander - who will also be leaving LiveTiles early next year - noted all of the group's development activities had been centralised in two cost-effective locations in Portugal and Ireland, as part of plans to become cash flow breakeven in the second half of FY24.

"We are proud of the progress we've made in reinvigorating product innovation, our roadmap, and our core product value proposition," he said at the time.

"This effort is reflected in the market with significant new customer additions and reduced churn, reaffirming the demand for our products.

"Overall, we now operate as a leaner, more focused, and better-positioned business for future growth."

At the AGM, 58.56 per cent of votes were cast in favour of investigating the removal of the company from the official list of the ASX - something the board had tried to do in September last year but they were rebuffed as shareholders snubbed the proposal.

The remuneration report also received a lukewarm response with 48.37 per cent of votes cast against it.

Around a week after the meeting, at 6:30pm yesterday evening Michael Korda, Andrew Knight and Craig Shepard of KordaMentha were appointed receivers and managers of LiveTiles Limited.

The receivers and managers were called in by 1Venture Credit Trusco Pty Ltd as a trustee of the 1V Venture Credit Trust.

"The effect of the appointment is that the receivers are now in control of the whole of LVT’s assets, undertakings and operations," KordaMentha stated.

"The receivers are appointed to LVT only and not to any of LVT’s subsidiaries, which remain unaffected by the receivership appointment.

"Notwithstanding that 1V continues to have the benefit of security over certain primary operating subsidiaries in the group, 1V has confirmed that it does not intend to exercise its rights or take enforcement action against those subsidiaries at this time."

The receivers expect that all subsidiaries of LVT will continue to operate on a business-as-usual basis and with minimal disruption, whilst the receivers seek offers for the sale or recapitalisation of the group.