Struggling Bonds.com Group Inc. is looking for strategic alternatives, including M&A options, as the company continues to operate at a loss.
Bonds.com announced on Jan. 29 that it would pursue strategic alternatives, including a possible investment, merger or sale of the company. The company didn’t set a timeline or decide on a particular path, and says there is no assurance that a deal of any kind will be completed.
Headquartered in New York, Bonds.com provides services to institutional fixed-income investors through an online trading system called BondsPro. The company has been using the system since 2010.
The company has a history of operating losses, and an accumulated deficit of about $51.9 million. Bonds.com also has a working capital deficiency of about $300,000 as of Sept. 30, and used $3.8 million in operations costs through that point in the year. Those factors raise substantial doubt about the company’s ability to continue as a going concern, or without the threat of liquidation, Bonds.com says in a Nov. 14 filing with the U.S. Securities and Exchange Commission.
For the three months ended Sept. 30, the company’s loss from operations was $1.6 million, less than the $2 million it lost in the three months ended Sept. 30, 2012. The decline was a result of a payroll decline, the company says. For the nine months ended Sept. 30, the company had a loss from operations of $4.9 million, which is $1.2 million less than the $6.1 million loss it incurred in that same time period in 2012.
For 2013, market factors led to decreased trading volume, causing total revenue to decline by 9 percent for the three months ended Sept. 30, to $1.6 million, from $1.8 million for the same time period in 2012.
The electronic fixed income trading market is experiencing a period of growth and exposure, which means that the company will need to continue investing in hardware, software development and networking capabilities, Bonds.com says in the filing. Keeping up will require the company to spend money, including on internal development.
The company started restructuring in October, which included cost reductions, the elimination of nine positions and a realignment of responsibilities among the remaining employees.
For last week’s edition of Turnaround Tuesday, see “American Nano Needs Cash to Pay Loans Due In 2014.”
For more troubled companies, see Mergers & Acquisitions Distressed Company Watch List.