No reason what so ever right now they are debt free and have enough cash to last the next two years at their current burn rate. That burn rate is actually starting to come down as they streamline operations. They now have plenty of cash on hand. Again the dilution was done to bring in new business. I posted on this a few days ago. The CEO stated on the conference call that many funds wanted to do business but they were aware they needed to raise cash. As soon as they did they landed a bunch of new business.
This was from their conference call.
we strengthened our balance sheet with the successful completion of our follow on offering which raised $40 million.
Transactions substantially increased our institutional share holder base, and we believe provides the ample funding for us to execute on our strategy for growth. The offering also generated a significant amount of interest in our technology within our core target market, the global hedge fund industry.
And we had some real challenges with what was a robust pipeline going into the second quarter and in closing contracts we ended up with 20 new clients in the quarter.
And that was really a result of our financial situation of our balance sheet. People were reluctant to sign contracts with us, early in the quarter when they knew we were out on a potential capital raise and strengthening the balance sheet. After all we’re selling to Hedge Funds, Hedge Funds that analyze companies and given the circumstances that we found ourselves in towards the end of Q1, it put a lot of pressure on Robert and his sales team to close transactions.
So the pipeline was very healthy going into Q2. It’s even healthier going into Q3, which we’ll talk about. But that really created a little bit of a headwind for us -- substantial headwind for us. And when we closed the secondary offering on May 20th and obviously made substantial strengthening of the balance sheet, we’re able to close out the quarter with some fairly strong momentum including some very notable wins for us. So, it was nothing more than that, it was really just the headwinds of our balance sheet.
Again the Dilution was done to bring in Contracts. This IMO is probably the single most important time to Dilute shares. Then they just upped their Data center space by 350%. Its not hard to see they are making all the right moves because the business IS THERE!!!!.
