There are things you want to inherit when you acquire another company, but a penchant for red ink is probably not among them.
New York-based Creative Realities in the year since it merged with Wireless Ronin is now reliably spitting out the same butt-ugly quarterly statements that followers grew accustomed to seeing when Ronin was still a thing.
CRI, listed on the stock market as CREX, lost $1.9 million in Q1 of this year, and listed it cash and cash equivalents on hand as $473,000 at the end of March. Cash used running the company in Q1 was $1.3 million, and using my breathtaking command of basic arithmetic … that just doesn’t look good for keeping the lights on for long.
The SEC filing suggests the pieces are in place for the solutions provider/softwareco to run things through the balance of this year:
Management believes that, despite its losses to date and while we can provide no assurance that our ongoing integration efforts will be successful, the operations of the combined Company resulting from the completed acquisitions and related restructuring actions will provide greater sales, margins, scale and operating efficiencies, all of which we believe will ultimately lead to operating profitability and positive cash flows from operations. We have certain payment plans and settlements setup with certain vendors. We expect that our future available capital resources will consist primarily of cash on hand, any cash generated from our business operations and future equity and/or debt financings or support, if any, to support our growth objectives, ongoing working capital needs, and 2015 business plan. As of the date of this report, management believes that its exiting working capital resource, together with projected cash flows, are sufficient to fund it’s operations through as lease December 2015.
Our capital requirements depend on many factors, including our ability to successfully address our short-term liquidity and capital resource needs, market and sell our products and services, develop new products and services and establish and leverage our strategic partnerships. Any additional equity financings may be dilutive to shareholders and may be completed at a discount to market price. Public or private debt financing, if available, would likely involve restrictive covenants similar to or more restrictive than those contained in the Series A Convertible Preferred Stock Offering. There can be no assurance we will successfully complete any future equity or debt financing.
The company is rumoured to be up for sale (kinda has to be), and the attraction I assume would not be the management team or the Ronin IP, but perhaps the value of contracts with Macy’s, Chrysler and a few other companies listed on the CRI website.
There is nothing amusing about this, as there are people at CRI just doing their job as best they can to pay the rent and the iPhone bill. But at least in New York it’s pretty easy to pick up another gig. I have two clients looking hard for for sales engineering help, so if you are at CRI and getting pretty jumpy, know there are opportunities.