Liquidity |
12 Months Ended |
|---|---|
Mar. 31, 2016 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Liquidity |
Liquidity
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.
Our primary sources of liquidity have historically been issuance of common and preferred stock and convertible debt. In fiscal 2014, the Company raised $33,297 through equity financings. The Company completed a public offering on October 2, 2015, netting cash proceeds to the Company of $12,627. The Company expects to use net cash proceeds from the offering for organic business opportunities, product development, general corporate purposes, working capital, and capital expenditures. The Company believes that it has, after the public offering, sufficient cash, cash equivalents, and capital resources to operate its business at least through March 31, 2017. As of March 31, 2016, the Company had approximately $11,231 of cash and cash equivalents, which includes the cash gross proceeds of $1,000 received from the Sift transaction. Additionally, the Company currently has a $5,000 revolving credit facility in place with SVB which it uses to fund working capital requirements, as needed. As of March 31, 2016, the Company also had $3,000 outstanding on its revolving credit facility with SVB. As of March 31, 2016, the Company had fully paid off its term loan with SVB.
Pursuant to the amendment to the Third Amended and Restated Loan and Security Agreement dated June 11, 2015, entered into by DT Media and SVB on November 30, 2015, the covenant requirement was put in place for the Company to maintain an adjusted quick ratio of not less than 0.90:1.00 unless (a) there are no advances outstanding under the revolving facility, or (b) if the Company’s cash and cash equivalents held at SVB or SVB's Affiliates is greater than or equal to $15,000. As of April 30, 2016, given the Company did not meet the requirements set forth in (a) and (b) noted previously, the Company was required to maintain an adjusted quick ratio of not less than 0.90:1.00. As of April 30, 2016, the Company's quick ratio was estimated at 0.89 versus the 0.90 minimum level.
On June 10, 2016, prior to the required testing of the above-mentioned covenant, SVB and DT Media entered into a Consent Agreement, effective as of May 31, 2016, whereby SVB provided its consent to DT Media (for a de minimis fee) to not exercise any rights or remedies solely in connection with the non-compliance with such covenant for the period ended April 30, 2016, without which consent DT Media would have been in default of the Loan Agreement. Please see "Risk Factors" included in PART I Item 1A. of this Annual Report on Form 10-K within section "General Risk - The Company has secured indebtedness, which could limit its financial flexibility", regarding financial covenant compliance.
Until the Company becomes cash flow positive, the Company anticipates that its primary source of liquidity will be cash on hand and access to the $5,000 revolving credit facility, which matures on June 30, 2016. In addition, the Company may make acquisitions, make new investments in under-capitalized opportunities, or invest in organic opportunities, including Real-Time Bidding ("RTB"), integration of Content/Pay into advertising infrastructure, or new product development, and may need to raise additional capital through future debt or equity financing to provide for greater flexibility to fund any such acquisitions and organic growth opportunities. Additional financing may not be available on acceptable terms or at all. If the Company issues additional equity securities to raise funds, the ownership percentage of its existing stockholders would be reduced. New investors may demand rights, preferences, or privileges senior to those of existing holders of common stock.
In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which, in turn, is dependent upon the Company’s ability to generate positive cash flows from operations. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities, that might be necessary should the Company be unable to continue its existence.
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