Minneapolis-based mobile fintech provider Digiliti Money (formerly Cachet Financial Solutions) is pondering its future in light of financial difficulties and the resignation of its Founder, Chairman and CEO, Jeffrey Mack, reports Paybefore sister publication Banking Technology.
Digiliti Money’s Executive Vice President and Chief Financial Officer, Bryan Meier, has assumed the position of interim CEO.
According to Digiliti Money’s new chairman, James L. Davis, Mack “has been instrumental in helping Digiliti transform from a pure-play remote deposit capture provider into a mobile money technology leader.”
Digiliti Money specializes in mobile money and remote deposit capture solutions for U.S. banks and financial institutions. Its solutions are cloud/SaaS-based. The company was founded in 2010, went public in March of 2017 and then changed its name from Cachet Financial Solutions in April.
It says that since its inception it “has sold more than 900 products to over 600 financial services organizations.”
Digiliti Money “will be evaluating its go-forward strategy,” Meier says. “Our near-term focus will be on our core products, growing our existing customers, and becoming more selective about the opportunities we pursue.
“In addition, we are reducing our cash burn to improve our bottom line performance.”
For its Q2 results, Digiliti Money expects total revenue to be between $1.1-$1.3 million, compared with $2 million for Q2 2016. It also expects “an accounts receivable reserve in the amount of $1.8 million, due to the unilateral non-contractual termination, shortly after the end of the second quarter of 2017, of a series of contracts by one customer.”
The vendor says it is “currently investigating its rights with respect to those customer contracts.”
Due, in part, to this development, as well as to revenue shortfall and current level of operating expenses, Digiliti Money is looking to seek financing to support its operations going forward.
Digiliti Money’s “sales pipeline of potential customers at the start of the quarter did not result in new contracts and product implementations,” according to Meier. He expects these deals to close in H2 2017, and also points out that Q2 saw 27 new customer signings, 53 product sales and 45 product go-lives. “The revenue from this activity will ramp up over time,” he says.
“In response to our revenue shortfall,” Meier continues, “we are in the process of implementing several cost-cutting initiatives, which we expect, on a full-year, continuing basis, to reduce our annual operating expenses by nearly $3 million when fully implemented by November 2017.”
However, if Digiliti Money is not able to achieve the required financing and sufficient positive cash flow from operations, in the near term, “it may not be able to continue as a going concern.”
The complete results for Q2 will be announced on Aug. 14, 2017.
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