Online marketer e-centives told investors this week that it plans to raise about $20 million in new capital, although details are scant at this point.
The Bethesda, Md.-based firm, which is traded on the Swiss New Market, said during its annual shareholder meeting on Thursday that the funding would help it reach profitability before charges by the fourth quarter of 2002.
Chairman and chief executive Kamran Amjadi reiterated that promise in an interview with internetnews.com from Switzerland, where the company held its shareholder meeting.
“The investors have received notification, but details were not discussed under [Securities and Exchange Commission] rules,” Amjadi said. “Although we’re traded here, all of our Swiss investors know we’re under U.S. reporting regulations.”
He added that investors will be briefed more fully next week.
If e-centives is, in fact, able to secure the funding, it will renew the company’s chances of surviving the year — after reporting lower-than-expected revenues and dwindling cash reserves earlier this month.
The firm posted a second-quarter net loss of $11 million, or $0.63 per share, on revenues of $2.2 million. It also said it has only about $10.5 in cash remaining at the end of June.
A year ago, the firm posted a loss of $8.4 million on revenues of $2.2 million. During the second-quarter report earlier this month, Amjadi attributed the firm’s widening losses since mid-2001 to the continued problems afflicting marketing and IT spending.
“While the retraction in online advertising and technology infrastructure spending has impacted our revenues, we’re pleased with our cost control initiatives and the success of our European development efforts,” he said at the time. “We are completely focused on bringing our expenses in line with the realities of the current marketplace while maintaining the integrity of our business lines which enable us to win bigger customers and contracts. We have great confidence in our technology and infrastructure platforms, our people and the opportunities available to us in an improved global economy.”
Indeed, the promise of funding would be the second hopeful piece of news for the company this month. Earlier, e-centives announced an agreement with European portal play Vizzavi, a joint venture between Vodafone and Vivendi Universal.
The deal will see e-centives administering consumer incentive programs for Vizzavi’s Web and mobile properties in the U.K., France, Netherlands, Italy, Germany, Greece and Portugal.