- KITD has a very low cash balance (less than $7 million of unrestricted cash available to fund operating activities) and we believe the Company is operating at a significant cash burn in the near-term — providing an extremely short runway to solve its manifold issues;
- The Company requires additional capital but the recent, dramatic downward share price movement and lack of audited financials will make it very difficult to raise additional financing at anything but terribly dilutive terms–in fact we believe the Company failed in a desperate attempt to close a financing even prior to its announcement that it was restating historical financials and delaying third quarter results;
- The Company appears to have misrepresented the reason for the delayed release of its 10-Q for the period ending September 30, 2012, and inappropriately utilized the filing extension granted to companies due to Hurricane Sandy in an attempt to obfuscate the underlying liquidity issues and accounting issues afflicting the Company;
- KITD is in material, technical default under its senior secured note issued to Western Technology Investment ("WTI") due to the Company's restatement of its historical financials, enabling WTI to pursue all rights available to it under the secured note agreement to remedy this default—including foreclosure on all of KITD's assets and intellectual property globally;
- Based on the current price of KITD common stock, the terms of the Share Purchase Agreement entered into between KITD and Hyro Limited ("Hyro") on April 21, 2012 obligate the Company to issue nearly twenty (20) million new shares to Hyro shareholders within the next 30 days; and
- KITD's current share price and its lack of audited financials puts the Company at serious risk of running afoul of the NASDAQ continued listing requirements.
Group Led By Former Chairman And CEO Kaleil Isaza Tuzman Extends Revised Acquisition Offer To KIT Digital Board Of Directors
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.