Mangosoft losses mount
The recent sale of more than 2 million shares of common stock and an additional bridge loan have left business software company Mangosoft with $914,000 in total assets following the close of the first quarter of 2007.
The Nashua-based firm’s first-quarter filings released over the weekend, however, indicate an increase in net losses, leaving Mangosoft officials with concerns over the future of the company.
In January, Mangosoft announced the sale of 2.4 million shares of common stock yielding $1.2 million in gross proceeds. An investor also provided the business with a $250,000 bridge loan. Proceeds from both were used to pay past due expenses and fund ongoing patent litigations according to the company’s 10-Q report, which was filed with the Securities and Exchange Commission and released on June 2.
In addition to the stock sale, the recent filing reported net losses of $112,974 for the first quarter of 2007 which ended March 31. This loss marks a 35 percent increase over net losses of the $83,778 reported for the same time period in 2006.
Cash used in operations during the 2007 period increased 59 percent, from $90,643 in first quarter 2006 to $144,059 in first quarter 2007.
Together, the two factors have “raised significant doubt about the company’s ability to continue,” according to the first-quarter statement.
Revenue for first quarter 2007 decreased 12 percent to $61,931, compared to the $70,507 reported for the same time period 2006.
Costs of services decreased by 3 percent to $64,742 in the first quarter of 2007, compared to the $66,756 reported for the first quarter of 2006.
Continued reductions and use of a lower-cost data center were responsible for the decrease according to the filing.
Loss from operations increased 40 percent to $122,109 during first quarter 2007 compared to $86,968 reported for the same time period last year. Company officials credit this increase in part to legal costs incurred in patent pursuits and defense of existing patents.
Dale Vincent, CEO and president of Mangosoft, could not be reached for comment by NHBR Daily. – TRACIE STONE