Having gained shareholder approval at a general meeting, scandal-struck WANdisco will raise up to $30 million and try to reshape the company, including potentially changing its brand name.
Replication supplier WANdisco was left in disarray in March when management discovered a sales rep had falsified customer purchase orders. They had done it so convincingly that $9.7 million of actual sales in 2022 became $24 million of reported sales and bookings were grossly inflated from $11.4 million to $127 million. The discovery of this resulted in AIM stock market suspension, chairman, CEO and CFO resignations, interim chairman and CEO appointments, and a 30 percent headcount cut.
New management needs to get the WANdisco recapitalized and the shares relisted to try and save the company. The June 6 Special General Meeting (SGM) of shareholders vote was a major step forwards.
It was preceded by WANdisco’s management completing more than 45 meetings covering a large majority of the shareholder base. Having sensed the temperature and told shareholders about the tenor of its plans, the SGM resulted in 97.7 percent of votes cast being in favor of management’s ideas to rescue the company with a large infusion of fresh cash raised by issuing new shares and a turnaround plan.
WANdisco is hoping to publish audited accounts for 2022 on or around June 30 and complete its $30 million fundraising quickly. It will then seek relisting on the AIM stock market, which should reassure partners, customers, and employees that it has a future. The turnaround plan will add detail to that and a planned investor roadshow will outline its main elements. These include:
- Target market size
- Technology and product differentiation
- Go-to-market strategy and structure
- Selling methodology and sales governance processes
- Disclosure improvements
- Organisational structure
- Corporate governance
- Board’s future ambitions for the company
The WANdisco brand change is to be proposed at the planned 2023 AGM. Information about the potential name change and AGM date will be provided in the relatively near future.
The board says the sales reporting deception involved false purchase orders from eight companies. It believes there are no recent contracts, revenues, proofs of concept, technical engagements or sales relationships between any of these eight companies and WANdisco. It continues to liaise and cooperate with the authorities in relation to this potential fraud.
In addition to WANdisco’s own investigation, the UK’s Financial Conduct Authority is also inspecting statements made by the company.
