RE: and now...the end is near..... End of the world Dec 22nd. Just in time.
Don't know what will happen with Futura. They have 4 employees left, not counting David Campbell. Gross margin in 2011 was about $1 million. Since they derive 75% of revenues from Aeroplan, then 75% of payroll had to be further deducted. I don't know the exact number, but from Jan - Aug 2012 payroll was $978,044. If extend to year-end, ity would amount close to $1,500,000. 75% of that would be $1.125,000.
Therefore, there's no profit from the Aeroplan program. Or else too many non-essential people were hanging onto the payroll based on their contributions in the past, but not necessarily what was required now as a reseller. They had to downsize much earlier, maybe in 2010 already.
I don''t know the inner workings of a loyalty company. The "value-added" component they talked about takes time and money to develope. Reading some descriptions, it does sound complicated in developing a system which can gather data about consumer buying habits, do offer management, etc. Designing private label software systems takes time. They did all the above, but unfortunately, probably cost more than it was worth by taking on so much, instead of focusing on being an effective reseller.
If decided to change coarse, then direct all energies to being a reseller and phase out the rest.
It's sad that they tried to have the best customer buying habit reporting system in place for merchants, yet for their own purposes did not have an internal accounting system to see the company was heading for trouble and that Aeroplan was not profitable given the large payroll.
Right now the essential; services cost $22,625/month, not counting David Campbell's salary. They have now: customer care, systems development manager, partner management and CFO. Huge difference from $130,000/month. Yes other services have to be dropped or curtailed.
But if they want to survive, as paragraph 10 says:
Downsize or shut down any non-productive business operation, dispose of redundant or non-material assets.
Terminate the employment of such of its employess or temporily lay off as deeemd appropriate.
Pursue all avenues of refinancing in whole or part subject to prior approval of the Court before obtaining any material refinancing.
It could be profitable if costs are trimmed and only those people required for a reseller be left on the job. Which will probably mean eliminating custom design services, Futura Rewards, etc.
As for Aeroplan, Futura had problems early in 2012. June 26th Futura e-mailed Aeroplan with a proposal to extent contractual payment terms from 30 days to 60 days. But I think the squeeze was on about when Mark Farrell left. Futura put out a news release on Sept 11th relating to debt negotiations. About $2 million worth of debt had a chance to be converted to shares. But all proposals fell though upon default as wea re where we are today.
I'm tempted to look for a circumstance to blame. But so many of them and over 6 years. It's like a health problem. The troubles now are based on decades of living and not one specific health problem.
Yes it's Dec 10th tomorrow. The day Futura must decide what coarse of action it will take. At least I hope for a news release in the coming weeks. If continuing in some form, provide a brief description. Don't have to go into details.
If shutting down then say it this week.