Lyfe Communications Inc. is looking for debt or equity financing to meet working capital needs.
South Jordan, Utah-based Lyfe provides television, Internet and phone services through a single broadband connection, which it says lowers costs, through subsidiary Connected Lyfe Inc. The company offers services in six cities. The company develops, deploys and operates networks in single-family, multi-family, high-rise, resort and hospitality properties.
Lyfe is currently seeking sources of equity and debt financing from current and potential investors, and has signed agreements with AT&T Inc. (NYSE: T) to upgrade services to potentially increase revenue, the company says in a Nov. 14 filing with the U.S. Securities and Exchange Commission. Historically, the company has raised money through the sale of equity capital and shareholder loans.
As of Sept. 30, the company had an accumulated deficit of about $17.5 million. The company needs to generate more revenue in order to reduce its deficit, sell additional stock or obtain more debt. During the third quarter, Lyfe issued shares of stock to raise $70,000 in cash.
Lyfe has been experiencing negative cash flows from operating activities. That, combined with the deficit, raises substantial doubt about the company’s ability to continue as a going concern, or without the threat of liquidation, Lyfe says in the SEC filing.
Throughout 2012 and the first nine months of 2013, the company didn’t receive committed financing, which left it without money to execute its business plan.
Lyfe’s revenue has declined. Over a three-month period, ending Sept. 30, Lyfe brought in $46,743, compared with $133,107 for the three months ended Sept. 30, 2012. For the year through Sept. 30, the company brought in $157,001, compared with $458,654 for the nine months ended Sept. 30, 2012.
The revenue declines are because the company’s customer base shrunk. As it goes forward, Lyfe says it anticipates funding operations through debt financing or stock offerings.
For last week’s edition of Turnaround Tuesday, see “Lucid Explores Strategic Alternatives, Including PE Investment.”
For more struggling companies, see Mergers & Acquisitions’ Distressed Company Watch List.