- Inability to commercialize patented technology
- Flawed business plan, with no chance of success
- Approximate burn rate of $800,000 per month
- Sellers were promised cash top off if stock dropped below $.40 per share
- Stock dropped to $.04 per share
- Management had zero ability to execute or provide leadership or vision for the company
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Action Steps:
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In first week, CEO, COO & Top Finance Consultant positions were eliminated
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Immediately reduced corporate overhead by 50%
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Terminated EVP of sales when it was determined he was working for another company concurrently
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Negotiated that sellers take stock instead of cash top off and paid off remaining obligations
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Focused strategic direction on core business
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Divested three non-core business units
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Focused on properly integrating IP technology
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Started quarterly shareholder conference calls
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Took COO, acting CEO, SVP of Sales and Board of Director seat s for first six months
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After six months hired industry leader as CEO and replaced him within 12 months with more entrepreneurial CEO from a competitor in the business.
Results:
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Reduced burn rate from 800k to 400k per month
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Secured funding for new burn rate
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Augmented capital structure for optimal performance
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Raised $10 million for operations and seller obligations
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Divested business units and restructured debt for ROE of $8 million
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Reduced full time employees from 92 to 40
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Focused enterprise on core business and created U.S. Market
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Completed new software product NEOREADER, and is currently being implemented in U.S. & Europe |
