The Douugh Limited (ASX: DOU) share price remains suspended on Monday as it continues its correspondence with ASX Ltd (ASX: ASX) in respect to potential breaches of its recent placement and backdoor listing transaction.
However, this afternoon the company has released details on the queries that the stock exchange operator has made and also its answers to them.
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What did Douugh say?
A lot was asked of and answered by Douugh in this release, but the main takeaway was that the parents of director Bert Mondello were issued a significant number of shares in breach of listing rule 10.11 before selling them for a big profit.
According to the release, corporate lawyer Steinepreis Paganin has reviewed its re-compliance register and found that Mr Mondello's parents were issued 3.35 million Douugh shares for 3 cents per share in a re-compliance capital raising. 3,117,500 of these shares were sold in October for a profit of $200,470.
The parents received a further 422,727 shares for 22 cents per share during its recent placement, which was announced along with its deal with Humm Group Ltd (ASX: HUM) in December. The Douugh share price ended that day at 29 cents, which was 32% higher than the placement price.
These compliance breaches certainly aren't a good look for a company that was until recently calling itself a neobank.
Douugh's shares will remain suspended while the ASX's enquiries continue.
What is Douugh?
Douugh is a financial wellness app provider aiming to disrupt the business model of banking.
As things stand, however, it is unclear how many users the company has for its app, which is available in Apple's App Store with a 3.9 star rating from 54 reviews.
What else remains unclear is just how the company is going to differentiate itself in a crowded financial wellness market filled with other apps that arguably have stronger features and better ratings such as Humaniti.
