Inventergy Global Inc. (INVT), the patent assertion company run by CEO Joe Beyers, said its net loss for 2014 widened by a factor of almost five as higher than expected expenses offset negligible gains in revenue.
The Campbell, Calif.-based company said its net loss for 2014 was $20.1 million, or $1.15 a share, compared with a loss of $4.73 million, or 56 cents, a year earlier.
Shares of Inventergy fell nearly 6% or 4 cents to 65 cents today in Nasdaq trading. They’ve traded between 39 cents and $10.52 over the past year.
Revenue was $719,267 in 2014, versus no revenue a year earlier.
General and administrative expenses more than doubled to $11.69 million from $4.55 million, a year earlier.
The company had patent amortization expenses of $1.4 million, up from $293,176 a year ago.
The company took an impairment charge of $683,350 during 2014. The previous year included no impairment charges.
The impairment charge resulted from the termination of an acquired contract in the first quarter of 2015 that provided distribution services of facility security and access control products that was inherited as part of a merger.
The company had cash and cash equivalents of $1.44 million as of Dec. 31, 2014, versus $1.52 million, a year earlier.
Inventergy said it used $8.37 million in net cash during the year, up from $2.24 million in 2013.
At year-end, 2014, Inventergy’s accumulated deficit since inception totaled $43.07 million. The company had a negative working capital of $2.11 million.
As March 20, 2015, the company remaining cash of about $1.6 million, which includes $1 million of minimum cash reserves intended to serve as additional collateral for the secured debt financing with Fortress Investment Group.
“These factors raise substantial doubt about our ability to continue as a going concern,” Inventergy said in a filing with the Securities and Exchange Commission.
As such Inventergy joined a growing number of patent monetization companies to get a qualified opinion from auditors because of concerns about their ability to continue as a going concern. Vringo Inc. (VRNG), ParkerVision Inc. (PRKR) and Spherix Inc. (SPEX) also received qualified opinions.
Inventergy said that while it entered into its first license agreement in February 2015 and received an additional drawdown from the Fortress agreement of $1.2 million, its continuation as a going concern is dependent both on achieving additional licensing revenue from its patent portfolios and obtaining additional financing on acceptable terms.
“We are seeking additional capital through loans, subject to the restrictions of the Fortress agreement, and the sale of securities but we cannot assure you that we will be able to obtain additional capital on terms acceptable to us or at all.”
Inventergy said it expects its working capital expenses to be about $7.8 million over the next 12 months. About $3.7 million of that is for employee costs. About $1.8 million is for operational costs; $1 million is for the acquisition of patents; and $500,000 is for debt servicing fees related to the Fortress agreement
“Based on the foregoing and our existing cash balances and proactive measures to reduce expenses and defer obligations where possible, our management believes we have funds sufficient to meet our anticipated needs for less than three months.”
To date, Inventergy has acquired about 755 currently active patents and patent applications for $12.1 million.
In addition, Inventergy said it will be required to pay another $20 million in unconditional guaranteed payments to the sellers of the patents. Of that, $18 million will come out net revenues from patent licensing receipts for the next three years through
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