The CEO of Digiliti Money has quit as the mobile banking technology vendor warns that it could go out of business if it does not secure new financing after poor second quarter revenues and the loss of a significant customer.
Jeffrey Mack is quitting as CEO and president of Digiliti, which until April was called Cachet Financial Solutions, effective immediately. CFO Bryan Meier becomes interim CEO.
Mack's departure comes as the company warns that it expects to post second quarter revenues of between $1.1 million and $1.3 million, compared to $2 million in Q2 2016.
What's more, an accounts receivable reserve in the amount of $1.8 million is expected shortly after the end of the quarter thanks to the "unilateral noncontractual termination" of a series of contracts by one unnamed customer.
Digiliti says that is looking into its rights with respect to the contracts but warns that the blow, combined with the revenue shortfall and current operating expenses, means that it expects to "seek financing to support its operations going forward".
Says a statement: "If the Company is not able to achieve a combination of such financing and sufficient positive cash flow from operations, in the near term, it may not be able to continue as a going concern."
Meier insists that several contracts with new customers are set to be closed in the second half of the year and he is also leading a cost-cutting programme designed to reduce annual operating expenses by nearly $3 million.