UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
____________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
May 15, 2014
____________________________
RAINMAKER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
____________________________
|
| | | | |
| Delaware | |
(State or other jurisdiction of incorporation) |
000-28009 | | 33-0442860 |
(Commission File Number) | | (IRS Employer Identification No.) |
900 East Hamilton Ave. Campbell, CA | | 95008 |
(Address of principal executive offices) | | (Zip Code) |
(408) 626-3800
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
____________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
| | |
| | |
[ ] | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | |
[ ] | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | |
[ ] | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.02 – Results of Operations and Financial Condition.
The following information is being furnished pursuant to Item 2.02 of this Form 8-K.
On May 15, 2014, Rainmaker Systems, Inc. (the “Company”) issued a press release reporting financial results for the three months ended March 31, 2014. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Section 7 – Regulation FD
Item 7.01 – Regulation FD Disclosure.
The information set forth in Item 2.02 of this Form 8-K is incorporated herein by reference.
Section 9 – Financial Statements and Exhibits
Item 9.01 – Financial Statements and Exhibits.
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| | |
Exhibit No. | | Description |
| | |
99.1 | | Press Release dated May 15, 2014, issued by Rainmaker Systems, Inc., reporting financial results for the three months ended March 31, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| | |
| | RAINMAKER SYSTEMS, INC. |
| | (Registrant) |
| | |
May 15, 2014 | | /s/ Bradford Peppard |
Date | | (Signature) |
| | By: Bradford Peppard |
| | Title: Chief Financial Officer |
Rainmaker Reports First Quarter 2014 Financial Results
Campbell, Calif., May 15, 2014 – Rainmaker Systems, Inc. (OTCQX: RMKR) today reported financial results for its first quarter ended March 31, 2014.
Net revenue in the first quarter of 2014 was $4.1 million, compared to net revenue in the preceding quarter of $4.1 million and net revenue in the first quarter of 2013 of $4.7 million.
Net loss from continuing operations for the first quarter of 2014 was $2.3 million, or a net loss of $0.06 per share, compared to a net loss from continuing operations in the preceding quarter of $11.0 million, or a net loss of $0.09 per share, and a net loss from continuing operations in the first quarter of 2013 of $3.5 million, or a net loss of $0.12 per share. The results for the preceding quarter include a charge of $2.3 million for the impairment of long-lived assets associated with our e-commerce platform business and a charge of $5.4 million for the impairment of goodwill.
Total cash and cash equivalents were $1.9 million at March 31, 2014, compared to $3.6 million at December 31, 2013.
“Please join us for our earnings conference call scheduled for this Thursday, May 15, 2014, for key updates,” said Don Massaro, President and CEO.
Conference Call
Rainmaker Systems will host a conference call and webcast Thursday, May 15, 2014, at 2 p.m. Pacific Daylight Time (5 p.m. Eastern Daylight Time) to discuss its first quarter 2014 financial results. Those wishing to participate in the live call should dial 888-452-4023 using the passcode 3856270. A replay of the call will be available for one week beginning approximately two hours after the call's conclusion by dialing 888-203-1112 and entering the passcode 3856270. To access the live webcast of the call, go to the Investors section of Rainmaker's website at www.rainmakersystems.com. A webcast replay of the conference call will be available for one year on the Conference Calls/Events page of the Investors section at www.rainmakersystems.com.
About Rainmaker Systems, Inc.
Rainmaker Systems provides sales and marketing solutions that help large enterprises increase sales to small-to-medium sized businesses. The Rainmaker Revenue Delivery PlatformSM combines specialized sales and marketing services with proprietary renewals software and business analytics to simplify the complexities involved in multichannel sales and marketing. The ViewCentral Learning Management System transforms organizations’ training centers into profit centers. Rainmaker extends the capabilities of traditional sales teams to assist companies in industries ranging from telecommunications to software and information technology services in reaching target customers and creating new revenue streams.
Rainmaker’s common stock trades in the U.S. on the OTCQX under the symbol “RMKR.”
NOTE: Rainmaker Systems and ViewCentral are registered with the U.S. Patent and Trademark Office. All other service marks or trademarks are the property of their respective owners.
Safe Harbor Statement
This press release may contain forward-looking statements regarding future events. These forward-looking statements are based on information available to Rainmaker Systems as of this date and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance, and actual results could differ materially from current expectations. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are our ability to raise additional capital to meet our operating requirements, our ability to refinance or restructure our debt, our ability to maintain compliance with our debt covenants, our ability to reduce our losses and achieve profitability, our client concentration, as we depend on a small number of clients for a significant percentage of our revenue, the possibility of the discontinuation and/or realignment of some client relationships, general market conditions, the high degree of uncertainty and our limited visibility due to economic conditions, our ability to execute our business strategy, our ability to integrate acquisitions without disruption to our business, the effectiveness of our sales team and approach, our ability to target, analyze and forecast the revenue to be derived from a client and the costs associated with providing services to that client, the date during the course of a calendar year that a new client is acquired, the length of the integration cycle for new clients and the timing of revenues and costs associated therewith, our ability to execute our business strategy and manage growth, potential competition in the marketplace, our ability to retain and attract employees, market acceptance of our solutions and pricing options, our ability to maintain our existing technology platform and to deploy new technology, our ability to sign new clients and control expenses, the financial condition of our clients' businesses, the protection of our intellectual property and other factors detailed in the Company's filings with the Securities and Exchange Commission ("SEC"), including our filings on Forms 10-K and 10-Q.
CONTACT:
|
| | |
Bradford Peppard | Jeffrey Waters | |
Chief Financial Officer | Director of Investor Relations | |
Rainmaker Systems, Inc. | Rainmaker Systems, Inc. | |
(408) 340-2510 | (410) 294-6802 | |
brad.peppard@rmkr.com | jeffrey.waters@rmkr.com | |
– Financial tables to follow –
RAINMAKER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for per share data)
(Unaudited)
|
| | | | | | | |
| March 31, 2014 | | December 31, 2013 |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 1,891 |
| | $ | 3,633 |
|
Restricted cash | 1,562 |
| | 3 |
|
Accounts receivable, net | 2,483 |
| | 3,554 |
|
Prepaid expenses and other current assets | 1,380 |
| | 1,618 |
|
Total current assets | 7,316 |
| | 8,808 |
|
Property and equipment, net | 858 |
| | 691 |
|
Other non-current assets | 1,173 |
| | 840 |
|
Total assets | $ | 9,347 |
| | $ | 10,339 |
|
| | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | |
Current liabilities: | | | |
Accounts payable | $ | 15,041 |
| | $ | 13,042 |
|
Accrued compensation and benefits | 911 |
| | 1,001 |
|
Other accrued liabilities | 2,841 |
| | 3,665 |
|
Deferred revenue | 1,966 |
| | 1,965 |
|
Notes payable | 2,927 |
| | 3,641 |
|
Total current liabilities | 23,686 |
| | 23,314 |
|
Deferred tax liability | 26 |
| | 26 |
|
Deferred revenue, less current portion | 2,267 |
| | 1,629 |
|
Common stock warrant liability | 76 |
| | 93 |
|
Other non-current liabilities | 158 |
| | 172 |
|
Total liabilities | 26,213 |
| | 25,234 |
|
Stockholders’ deficit: | | | |
Preferred stock, $0.001 par value; 5,000 shares authorized, none issued and outstanding | — |
| | — |
|
Common stock, $0.001 par value; 50,000 shares authorized, 43,894 shares issued and 42,852 shares outstanding at March 31, 2014 and 43,795 shares issued and 41,495 shares outstanding at December 31, 2013 | 42 |
| | 41 |
|
Additional paid-in capital | 136,549 |
| | 137,445 |
|
Accumulated deficit | (151,482 | ) | | (149,169 | ) |
Accumulated other comprehensive loss | (347 | ) | | (336 | ) |
Treasury stock, at cost; 1,312 shares at March 31, 2014 and 2,300 shares at December 31, 2013 | (1,628 | ) | | (2,876 | ) |
Total stockholders’ deficit | (16,866 | ) | | (14,895 | ) |
Total liabilities and stockholders’ deficit | $ | 9,347 |
| | $ | 10,339 |
|
RAINMAKER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share amounts)
(Unaudited)
|
| | | | | | | |
| Three Months Ended |
| March 31, |
| 2014 | | 2013 |
Net revenue | $ | 4,126 |
| | $ | 4,656 |
|
Cost of services | 3,159 |
| | 3,035 |
|
Gross profit | 967 |
| | 1,621 |
|
Operating expenses: | | | |
Sales and marketing | 936 |
| | 665 |
|
Technology and development | 1,012 |
| | 1,122 |
|
General and administrative | 1,138 |
| | 2,980 |
|
Depreciation and amortization | 85 |
| | 406 |
|
Total operating expenses | 3,171 |
| | 5,173 |
|
Operating loss | (2,204 | ) | | (3,552 | ) |
Gain due to change in fair value of warrant liability | (17 | ) | | (225 | ) |
Interest and other expense, net | 99 |
| | 93 |
|
Loss before income tax expense | (2,286 | ) | | (3,420 | ) |
Income tax expense | 27 |
| | 30 |
|
Net loss from continuing operations | (2,313 | ) | | (3,450 | ) |
Net income from discontinued operations | — |
| | 156 |
|
Net loss | $ | (2,313 | ) | | $ | (3,294 | ) |
| | | |
Foreign currency translation adjustments | (11 | ) | | (86 | ) |
Comprehensive loss | $ | (2,324 | ) | | $ | (3,380 | ) |
| | | |
Basic and diluted net income (loss) per per share: | | | |
Net loss from continuing operations | $ | (0.06 | ) | | $ | (0.12 | ) |
Net income from discontinued operations | — |
| | 0.01 |
|
Net loss | $ | (0.06 | ) | | $ | (0.11 | ) |
| | | |
Weighted average common shares: | | | |
Basic and diluted | 41,636 |
| | 28,994 |
|
RAINMAKER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
| | | | | | | |
| Three Months Ended March 31, |
| 2014 | | 2013 |
Operating activities: | | | |
Net loss | $ | (2,313 | ) | | $ | (3,294 | ) |
Adjustment for income from discontinued operations, net of tax | — |
| | (156 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | |
Depreciation and amortization of property and equipment | 85 |
| | 406 |
|
Amortization of debt discount | 29 |
| | — |
|
Gain due to change in fair value of warrant liability | (17 | ) | | (225 | ) |
Stock-based compensation expense | 156 |
| | 979 |
|
Provision for allowances for doubtful accounts | 17 |
| | — |
|
Impairment of other assets | — |
| | 280 |
|
Changes in operating assets and liabilities: | | | |
Accounts receivable | 1,080 |
| | 567 |
|
Prepaid expenses and other assets | (118 | ) | | (462 | ) |
Accounts payable | 2,008 |
| | 2,046 |
|
Accrued compensation and benefits | (106 | ) | | 623 |
|
Other accrued liabilities | (643 | ) | | 736 |
|
Deferred tax liability | — |
| | 11 |
|
Deferred revenue | 639 |
| | (320 | ) |
Net cash provided by continuing operations | 817 |
| | 1,191 |
|
Net cash provided by discontinued operations | — |
| | 121 |
|
Net cash provided by operating activities | 817 |
| | 1,312 |
|
| | | |
Investing activities: | | | |
Purchases of property and equipment | (249 | ) | | (352 | ) |
Change in restricted cash, net | — |
| | (165 | ) |
Net cash used in continuing operations | (249 | ) | | (517 | ) |
Net cash used in discontinued operations | — |
| | — |
|
Net cash used in investing activities | (249 | ) | | (517 | ) |
| | | |
Financing activities: | | | |
Proceeds from borrowings | 10 |
| | 200 |
|
Repayment of borrowings | (753 | ) | | (320 | ) |
Restricted cash related to borrowings | (1,562 | ) | | — |
|
Tax payments in connection with treasury stock surrendered | (3 | ) | | (79 | ) |
Net cash used in continuing operations | (2,308 | ) | | (199 | ) |
Net cash used in discontinued operations | — |
| | — |
|
Net cash used in financing activities | (2,308 | ) | | (199 | ) |
| | | |
Effect of exchange rate changes on cash | (2 | ) | | (14 | ) |
| | | |
Net decrease in cash and cash equivalents | (1,742 | ) | | 582 |
|
Cash and cash equivalents at beginning of year | 3,633 |
| | 4,494 |
|
Cash and cash equivalents at end of year | $ | 1,891 |
| | $ | 5,076 |
|
| | | |
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