Advertising company RVue Holdings Inc. is replacing senior management after consistent years of losses, and after the company’s accounting firm raised liquidation concerns.

The company says in a 10-K filing with the U.S. Securities and Exchange Commission from July 1 that  accounting firm RubinBrown LLP raised substantial doubt about RVue’s continuing as a going concern because of recurring net losses and negative cash flows from operations.

RVue, headquartered in Franklin Park, Ill., is an advertising technology company that provides a digital distribution service. The company connects 770,000 digital screens across 180 networks to deliver about 250 million daily impressions.

RVue has racked up losses and has a $9.6 million deficit, according to an SEC filing.

In 2012, RVue’s net loss was about $3.84 million, compared with $3.62 million for 2011. For 2012, the company had $602,363 in revenue, a decrease from the $643,483 it brought in for 2011.

The losses are the reason that RVue decided to replace senior management. The company says in an SEC filing that for it to be successful, it needs to hire new senior management with specialization in the advertising industry.

Michael Mullarkey resigned as the company’s CEO and CFO in April, but will remain on the company’s board of directors.

Mark Pacchini, a board member, was appointed president, CEO and acting CFO. Pacchini retired from Draftfcb Worldwide, a marketing communications company, in 2012.

Additionally, the board appointed Eric Kristoff, as the company’s chief technology officer in April. Kristoff came from UBS AG, where he was a senior infrastructure architect.

In July, RVue announced that Steve Schildwachter was appointed chief marketing officer. Schildwachter was also previously at Draftfcb.

Because of the going-concern warning, RVue says it will need additional funds to operate the business. The company, which has previously brought in money through selling stock and notes, plans to focus on growing revenue.

In September, the company raised $1.2 million by selling 20 million shares of stock.

On Nov. 30, 2011 and Dec. 21, 2011, the company entered into promissory-note purchase agreements worth $285,000 with investors. In January 2012, the company entered into another agreement for $935,000 in notes. The first set of notes - worth $288,067 - was converted into new notes.

The company used $1.95 million in operating cash for 2012 and $2.46 million in 2011.

RVue cut jobs in March 2012, saving about $430,000.

The company began life as Rivulet International Inc. in 2008 and was conceived originally as an automobile export business.

In 2010, the company bought RVue Inc. from Argo Digital Solutions Inc. After the deal closed, the company discontinued Rivulet’s business and focused on the new advertising business.

RVue did not return a call for comment.

For the last edition of Turnaround Tuesday, see “VHGI Pursues New Loan to Profitability.” 

For more struggling companies, see Mergers & Acquisitions Distressed Company Watch List

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