SEC Filings: Creative Realities Carries On Ronin’s Red Ink Ways
May 14, 2015 by Dave Haynes
The company has released its 2014 financials, which are something less than stellar and may support the rumour that the business is for sale. Adrian hangs out with money guys like Marc Boidman, so I pretty much assume his post is accurate.
The SEC filings say:
The company had net losses of $3.8 million in 2014 and $2.85 million in 2013.
At December 31, 2014, we had cash and cash equivalents of $573 and working capital of $(1,144). Cash used in operating activities for the years ended December 31, 2014 and 2013 was $(3,719) and $(865), respectively.
We incurred net losses and negative cash flows from operating activities for years ended December 31, 2014 and 2013. As of December 31, 2014, we had cash and cash equivalents of $573 and working capital deficit of $(1,144).
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, margin, 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.
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.
Interesting bits in the filings include how now-departed CEO Paul Price, at CRI pre-merger, gets a one-year $400K golden parachute. Also intriguing is how the company depends HEAVILY on two whale accounts (one I assume is Macy’s) to keep the lights on.
Our largest customers account for a majority of our total revenue on a pro forma, consolidated basis. We had 2 and 2 customers that accounted for 41% and 44% of accounts receivable as of December 31, 2014 and December 31, 2013, respectively. Decisions by one or more of these key customers and/or partners to not renew, terminate or substantially reduce their use of our products, technology, services, and platform could substantially slow our revenue growth and lead to a decline in revenue. Our business plan assumes continued growth in revenue, and it is unlikely that we will become profitable without a continued increase in revenue.