Bust dental-chain hearing probes growth outlook ‘discrepancy’
Potential investors in a Gold Coast-based dental chain were being told wildly different forecasts for growth than what a due diligence committee was hearing, a court heard on Monday.
The alleged discrepancy was questioned in a public examination into Smiles Inclusive, which raised $35 million in an ASX float in April 2018 with more than 50 dental practices trading under the Totally Smiles brand. It fell into voluntary administration in November 2020.
David Usasz of Smiles Inclusive outside the Federal Court in Melbourne on Monday. Luis Enrique Ascui
The examination, held in the Federal Court, also questioned the timing of updates for earnings forecasts and heard contradictory claims about voting at a bitterly contested shareholding meeting about board positions.
Appearing in court, former director and later chairman David Usasz was quizzed about information in pre-float investor documents that contrasted with information listed in a due diligence committee in December 2017.
The investor documentation, which detailed raising $3 million in a pre-float round, had a practice acquisition summary that claimed Smiles had 95 heads of agreement being entered into with a turnover exceeding $110 million.
But examining lawyer Vicki Bell also pointed to an update from Smiles Inclusive’s chief financial officer to a due diligence committee at the same time, which detailed that 61 heads of agreement “remained live” with a turnover of $65 million. Mr Usasz was listed at that due diligence meeting.
“There’s quite a discrepancy between what was said to potential investors,” Ms Bell said.
Mr Usasz said he could not recall having any involvement with the investor document and would not have agreed with it if he had seen it.
He pinned the
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