As of 30th September 2008, Wireless Ronin’s cash and marketable securities totaled approximately USD 18 million – at their current burn rate that gives them three and a half quarters (less than 12 months of course) before they finally run out of cash.
We listened to their Q3 earnings conference call yesterday and wow were the analysts grilling them in a big way! Our biggest takeaway – err, okay now you know their is a pun coming, Ed – was Ronin’s perceived relationship with KFC.
For some while now Ronin has been touting deals with the likes of KFC and Chrysler when in fact all they are is pilot projects with some hope BUT no certainty of a larger rollout.
In the conference call Ronin finally admitted that neither pilot was funded by the corporate parent – i.e. each rollout was in fact dependent upon getting individual franchisees and dealers to buy in with real money.
It’s not hard to figure out how they burn USD 1.1M in cash every month when with a quick calculation, even AFTER the recent 22% staff layoff, they are still only able to generate USD 60K in revenue per employee – can you believe that they still have 125 staff and contractors?
Wireless Ronin reported revenue of USD 1.9 million for the third quarter of 2008 and a third quarter 2008 net loss of USD 4.6 million compared to a net loss of USD 2.4 million in the year-ago quarterly period.
We are not sure how you can lose just over 2 dollars (yes, USD 2.42) for every dollar of product you sell and consider that sort of business a going concern.
Wireless Ronin (Nasdaq: RNIN) stock now trades at a market capitalization just about USD 1 million above the cash on hand.