The company “had cash and working capital totaling $5.4 million and $4.9 million, respectively, at December 31, 2008.” Citing a "history of operating losses" and expectation that operating losses will continue in 2009 due to the economic recession, the company's “sole source of capital is its working capital, which may not be sufficient to fund continuing operating losses and existing obligations,” Medialink said in a statement.
The release goes on to say the company is looking at alternatives, including investment or buyers as it continues to reduce costs. However, if these efforts prove unsuccessful, Medialink “may not be able to finance its operations and commitments with its working capital, and therefore may not be able to continue as a going concern.” The company also pointed out that its 10-K for the year includes opinion from its independent accounting firm, which also casts doubt on Medialink's ability to continue in business.
Medialink reported $19.6 million in revenue for the year ending December 31, 2008, a 10.4% drop from the previous year. Operating loss for the year totaled $8.3 million and an operating loss before impairments and other charges of $3.5 million.
The company also reported $4.9 million in revenue for the Q4 2008 period, a nearly 21% drop year-over-year.
“Like most commercial enterprises during the fourth quarter, we faced tremendous challenges during rough economic times,” said Medialink president and CEO Laurence Moskowitz in the earnings release. “In light of these ongoing difficult economic conditions causing delays and reductions in client spending in the early part of 2009, we are currently forecasting a $1.5 million decline in revenues for the first quarter of 2009 as compared to the comparable 2008 quarter.”