Spindle woes drag on
15 November 2016 | 1502 views | 0
Spindle, Inc. ( OTCQB : SPDL ) ("Spindle" or "Company"), a leading provider of Unified Commerce solutions, today provided a shareholder update on the heels of filing its third quarter financial results.
The results may be found in the Company's Form 10-Q filed with the Securities and Exchange Commission.
Michael Schwartz, Spindle Interim CEO, commented, "It has now been roughly four months since we made a fundamental shift in the leadership, focus, and approach of Spindle. As many may guess, the Spindle leadership team and I have all been heads down during this time settling in, determining our current state, bolstering our external relationships and partnerships, and trying to realize revenue through our inherited pipeline.
Since the middle of June 2016, our approach has been focused and simple. Focus on securing key strategic relationships, determine the current disposition and prognosis of our current products and assets, and leverage pipeline-generated revenue to enable investment in our inside sales group.
Through this process we've experienced both significant wins and some disappointments. We've learned that many of our core external relationships and partnerships were severely strained for a variety of reasons. Our core processing relationship and capability through Worldpay remains strong and will continue to serve as a critical component of our payment capabilities going forward. However, other processing relationships have not fared as well and have led to internal inefficiencies and revenue delays. A sizeable amount of anticipated earned revenue from prior months remains unrealized as of this writing. I continue to work closely with our Board of Directors to sort through any and all options to attempt to recover these funds.
We've also found our sales pipeline to be challenging in terms of sustainable increasing revenue potential. The pipeline had historically been comprised of merchants that were considered to be "high risk", a characteristic that often generates decent short-term revenue, but this revenue can also disappear relatively quickly. Though the profit margins on these types of merchants are high, the risks are equally high. The high risk nature of the pipeline, together with the relationship strains that have been identified have resulted in minimal revenue.
Again, pursuit of this poorly executed business model was inherited from past management who failed to properly account for such risks in the contracts executed with certain ISOs. Going forward, we intend to participate in the high risk market very selectively, and only with partners and ISOs who not only understand this type of business, but who will also execute sensible contracts. While high risk processing will not be a core part of our strategy going forward, we believe there does exist a balance whereby we can better protect our revenue stream by accepting lower, but still attractive margins.
Progress and successes too have been noteworthy. We've built a high quality management team with significant payments experience that are now universally aligned around a common set of objectives, all of whom are strongly committed to Spindle's success and creating shareholder value. Leveraging this team and internal deep vertical market experience, we have built a sports and facility management vertical solution that is anticipated to be released within the next several weeks. We believe it to be a best-in-class solution for teams and sports facilities that will generate revenue and provide us with several critical foundational components to be leveraged by our ultimate vision of commerce orchestration.
Despite the challenges we've experienced, I'm encouraged by our current position, our team, our strategy, and our future prospects. In short, we are a payments company, and our ongoing focus, solutions, and strategy will all align around this central theme. It's a theme that our current management team has successfully executed in the past, and our goal is to leverage our collective experience and track records of success to do it again.
As such, we are now migrating all of our resources toward three core tenets/solutions:
Inside Sales Group - This is a function and competency that has been heretofore under leveraged. Though it requires some up-front investment to properly launch, we have all of the core components required for its future success. The team's leader is a 20-year inside sales industry veteran with a proven track record of revenue generation and sustained growth in this space. We have also spent significant time fostering quality relationships that will help launch our inside sales function, and have already signed one major contract for revenue generation.