Smiles Inclusive dentists call for halt of capital raising after company left final financials out of formal offer documents

Smiles Inclusive dentists have intensified pressure on government regulators to halt the listed company’s attempt to raise funds from its shareholders, claiming it has misled prospective investors over its financial position.

Some Smiles Inclusive dentists have publicly drilled the company. Photo: iStock

SMILES Inclusive dentists have intensified pressure on government regulators to halt the listed company’s attempt to raise funds from its shareholders, claiming it has misled prospective investors over its financial position.

Joe Camacho and Arthur Walsh have, largely through a relentless public relations exercise, questioned the operations and management of Smiles, which has lost about 95 per cent of its market capitalisation since listing in April 2018.

In an open letter to “Australian media outlets” along with Australian Securities and Investments Commission chairman James Shipton and ASX chief compliance officer Kevin Lewis, the pair accused Smiles of attempting “to issue securities based on false and misleading information (which) is outright contravention of the Corporations Act”.

“We ask that: ASIC/ASX act immediately to prevent investors being put further at risk by suspending the Smiles rights issue,” the letter said.

They asked the ASX not to accept Smiles’ quotation until the exchange had investigated the situation; that Smiles notify retail shareholders of the reasons for the proposed suspension; and the company reissue “fresh, accurate and legally-compliant offer documentation as soon as possible”.

“Such is the severity and extreme behaviours on show, Smiles Inc is a test case of the various regulatory frameworks including ASIC’s espoused intent to crack down on directors and failures in audit quality/independence,” the letter said.

“Smiles Inclusive is now a matter of public interest — for mom and pop investors and Australia’s law makers alike.”

Multiple joint venture partners of Smiles Inclusive are unhappy with the company’s performance and management. Photo: iStock

Smiles referred to the $31 .1 million loss in the last paragraph of its statutory cleansing notice for the retail component of its fundraising late this afternoon.

Responding to questions from the Gold Coast Bulletin, the company said its final reported loss was not included in the offer documents as the offer was settled before the audit was complete.

“The capital raising is fully underwritten and was settled before the accounts were finalised,” a spokesman said.

“The investor presentation in relation to the capital raising refers to the unaudited accounts and the possibility for changes, and the audited results have since been released to the market.

“The capital raising process requires continuous disclosure which the Company has complied with, including the cleansing notice issued this afternoon.”

Shares in the company finished trading 4.17 per cent lower at 4.6c — below the 5c offered in the capital raising in which Smiles hopes to raise $3.3 million.

The company had flagged a full-year loss of “at least $4 million” in May, off the back of a previous profit downgrade from $2.3 million profit to a loss of up to $1 million.

The latest equity raising follows an earlier share issue that raised $1.2 million in June.