UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 14, 2012
Motricity, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
001-34781 |
20-1059798 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
|
601 108th Avenue Northeast Suite 800 Bellevue, WA 98004 |
|
| (Address of principal executive offices and zip code) |
(425) 957-6200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.05. Costs Associated with Exit or Disposal Activities.
As previously announced on January 5, 2012, Motricity, Inc. (the "Company") agreed to terminate its relationship with PT XL Axiata Tbk ("XL") at XL's request. In connection with this termination and as a result of the Company's review of its strategic path, on January 14, 2012, the Company adopted a plan to exit its business in India and the Asia Pacific region. The decision to exit its operations in India and Asia Pacific region was based on the resources and cost associated with these operations, the intensified competition in the region and the Company's decision to streamline its operations and focus on its mobile advertising and enterprise business, while at the same time recommitting some of its resources to its North American carrier operations.
The Company estimates that the costs associated with the exit from its operations in India and Asia Pacific region to amount to approximately $2.5M on a pre-tax basis. Included in these costs are severance costs of approximately $1.5M and contract termination costs of approximately $0.5M partially offset by termination fees from XL. Other costs include associated legal, accounting and tax costs. Substantially all exit costs are expected to be incurred as cash expenditures. The Company expects to complete the exit from these operations by April 2012. As a result of this exit, the Company expects close down its offices in Singapore, Malaysia, Indonesia and India as well as its data center in India and to reduce its global workforce by eliminating all of its employees in the region, which as of December 31, 2011 amounted to 135 employees.
The Company may face administrative and regulatory hurdles in the exit process, the process may be longer than anticipated and the Company may incur significant unexpected expenses in connection with the wind down of its operations in excess of its estimates. The Company is continuing to review its cost structure and work towards streamlining its North American business and while the Company believes that the exit from the operations in India and Asia Pacific will have a positive effect on its profitability in the long term, there is no assurance that this will be the case and that the Company will be able to generate sufficient revenues from its other customers or from its mobile advertising and enterprise business.
Item 8.01. Other Events.
On January 19, 2012, the Company issued a press release announcing the Company's exit from its operations in India and the Asia Pacific region and the matters described in Item 2.05 of this Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements. Except for historical information contained in this Form 8-K and the press release attached as an exhibit hereto, this Form 8-K and the press release contain forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary note in the press release regarding these forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Description
99.1
Press release, dated January 19, 2012, issued by Motricity, Inc.
No.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Motricity, Inc. (Registrant) |
||
| January 19, 2012 (Date) |
By: | /s/ JAMES R. SMITH, JR. James R. Smith, Jr. Interim Chief Executive Officer |
EXHIBIT 99.1
BELLEVUE, Wash., Jan. 19, 2012 (GLOBE NEWSWIRE) -- Motricity (Nasdaq:MOTR) announced today that it has taken significant steps to reorganize the company in order to capitalize on changing customer and market conditions. As part of the realignment, the Company has decided to close its operations in Asia. This shift will enable Motricity to concentrate efforts on the burgeoning opportunity the Company sees in the mobile advertising and enterprise space, while continuing to provide focused service to the largest carriers in North America.
In addition to hiring sales resources to focus on market opportunities in North America and expand its penetration into carriers, the Company is also investing in product development. Work is underway on the next version of products designed to expand Motricity's current suite of solutions and services.
"The past several months have been a period of transformation for the company," said Jim Smith, interim chief executive officer of Motricity. "We've made considerable changes which I believe will lay the foundation for long-term success and reignite growth. However, in order to achieve our business objectives, we've had to make some difficult choices, including streamlining and exiting areas of our business that were no longer strategic or profitable. I believe the strategy that we've since adopted now aligns with the strong market opportunity that exists in mobile enterprise and advertising."
Throughout this period of transition, Motricity has remained committed to driving growth, accelerating technological innovation and increasing the speed to market for its products and services.
"As a company, we have made significant adjustments to our cost structure, organization and strategy. Given our depth of talent, rich history in mobile and strategic focus on mobile enterprise and advertising, I'm confident that the changes we've instituted will help deliver enhanced shareholder and customer value," said Smith.
About Motricity
Motricity (Nasdaq:MOTR) empowers mobile operators, brands and advertising agencies to maximize the reach and economic potential of the mobile ecosystem through the delivery of relevance-driven merchandising, marketing and advertising solutions. Motricity leverages advanced predictive analytics capabilities to deliver the right content, to the right person at the right time. Motricity provides their entire suite of mobile data service solutions through one, integrated, highly scalable managed service platform. Motricity's unique combination of technology, expertise and go-to-market approach delivers return-on-investment for our mobile operator, brand and advertising agency customers. For more information, visit www.motricity.com or follow @motricity on Twitter.
The Motricity, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7813
Safe Harbor and Forward-Looking Statements
Statements made in this release and related statements that express the Company's or its management's intentions, indications, beliefs, expectations, guidance, estimates, forecasts or predictions of the future constitute forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and relate to matters that are not historical facts. They include, without limitation, statements related to the realignment of our business, exit from our Asian operations and cost and saving estimates related thereto, our research and development activities, new products and hiring efforts and the market opportunity in the mobile advertising and enterprise space. These statements represent beliefs and expectations only as of the date they were made. We may elect to update forward-looking statements but we expressly disclaim any obligation to do so, even if our beliefs and expectations change. Actual results may differ from those expressed or implied in our forward-looking statements. Such forward-looking statements involve and are subject to certain risks and uncertainties that may cause our actual results to differ materially from those discussed in a forward looking statement. These include, but are not limited to risks related to the sufficiency of our capital resources, the success of the realignment of our business and the our capital raising efforts, our dependency on a limited number of customers, intense competition in the mobile data services industry, including for skilled personnel, rapid technological change in the mobile data services industry, our ongoing leadership transition, our history of operating losses and our results of operations and financial condition; and other uncertainties described more fully in our filings with the Securities and Exchange Commission.
CONTACT: Media Contact:
Meghan Graves,
(425) 638-8211
Meghan.Graves@motricity.com
Investor Relations Contact:
Alex Wellins
The Blueshirt Group
(415) 217-5861
alex@blueshirtgroup.com