Ronin Needs New Investment To Keep Lights On Past Q2

March 2, 2013 by Dave Haynes

wireless_roninWireless Ronin released its financials last week and the software company now appears to be in particularly difficult circumstances – needing new money in to fund operations beyond the next three months.

Year to year revenue was down from $9.3 million to $6.7 million in 2012 and sales in the past quarter were only up 5% year to year, which is not nearly enough to start turning things around.

The company has trimmed operating costs but continues to operate deep in the red.

As of Dec. 31, 2012, Ronin had $2.3 million in cash and cash equivalents, compared to $3.5 million at the end of the prior quarter. On its earnings call, the executives said:

“Despite the robust pipeline and without a significant increase in short-term revenues we require additional capital resources to fund our operations beyond May of 2013. The Company filed a shelf registration statement with the SEC, which became effective on January 31, 2013. However, at present we have no commitments for any additional financing.

In addition the management has been aggressively working with the team of Rock Capital Partners on initiatives designed to address the liquidity needs of our Company including consulting on financing options, identifying opportunities to license RoninCast software and considering other strategic alternatives.”

Ronin got a spike this week in share value through a news release announcing it was “aligned” with Samsung on its smart signage platform. There was a big initial jump in share value and that settled back, likely after closer inspection revealed the company is one of several, including Signagelive, Scala and Four Winds, that are testing and demo’ing the “SOC” product that puts a CPU right inside the commercial panels.

Interestingly, Ronin President and CEO Scott Koller closed the earnings call with this:

In closing, I would like to make a few key points. I am not only the President of Wireless Ronin, I am also a concurrent fellow shareholder, our executive team, employees and Board of Directors are working very hard to make Ronin Successful. And I believe that beyond our short-term financial results we have come a long way. With perfect hindsight we would do some things differently than we did several years ago. The current management has acted diligently and (Inaudible) to transform the company making it more viable and competitive.

I have been following this company for years now as it has tried to recover from earlier management decisions that saw them build up huge staff numbers and market lavishly at trade shows. I’ve watched them try to market and win deals with a huge, very dark financial cloud over their collective heads. Say what you want about the product quality or management team, but there are a bunch of line staff working there – in a still tight economy – who are wondering if they will have jobs in three months.

The execs will be fine no matter the result, but the people answering support calls and shipping boxes didn’t make the stupid decisions that got the company here, but they’re the ones who will get hurt if new funding doesn’t come in.

I finally met a Ronin sales guy at a cocktail party this past week in Vegas. Nice, sharp guy in a difficult position. We didn’t talk earnings or where the company is at. He did seem a little worn down, but trade shows will do that to people.

Hope they find a way to turn things around, but the grade of the mountain they are scaling is now steeper than ever as the IPO and follow-on investor cash on hand is finally running out.

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