UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2014
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-54348
RVUE HOLDINGS, INC. |
(Exact name of registrant as specified in its charter) |
NEVADA | 94-3461079 | |
(State or other jurisdiction of incorporation | (I.R.S. Employer Identification No.) | |
or organization) |
275 N. York Road, Suite 201 | ||
Elmhurst , IL 60126 | (855) 261-8370 | |
(Address of principal executive offices, | (Registrant’s telephone number, | |
including zip code) | including area code) |
Not Applicable |
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ | Accelerated filer ¨ | ||
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
The number of shares outstanding of each of the issuer’s classes of common stock as of the close of business on May 9, 2014 is as follows:
Class | Number of Shares | |
Common Stock: $0.001 Par Value | 135,793,618 |
RVUE HOLDINGS, INC.
TABLE OF CONTENTS
PART I | FINANCIAL INFORMATION | |
Item 1. | Financial Statements. | |
Condensed Consolidated Balance Sheets – March 31,2014 and December 31, 2013 | 1 | |
Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2014 and 2013 | 2 | |
Condensed Consolidated Statements of Stockholders’ Equity – Three Months Ended March 31, 2014 | 3 | |
Condensed Consolidated Statements of Cash Flows –Three Months Ended March 31, 2014 and 2013 | 4 | |
Notes to Condensed Consolidated Financial Statements | 5 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 12 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 19 |
Item 4. | Controls and Procedures. | 19 |
PART II | OTHER INFORMATION | |
Item 1. | Legal Proceedings. | 20 |
Item 1A. | Risk Factors. | 21 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 21 |
Item 3. | Defaults Upon Senior Securities. | 21 |
Item 4. | Mine Safety Disclosures. | 21 |
Item 5. | Other Information. | 21 |
Item 6. | Exhibits. | 22 |
rVUE HOLDINGS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 714,431 | $ | 844,589 | ||||
Accounts receivable | 142,763 | 124,993 | ||||||
Prepaid expenses | 11,902 | 10,856 | ||||||
Total current assets | 869,096 | 980,438 | ||||||
Property and equipment, net | 2,411 | 3,065 | ||||||
Software development costs | 113,027 | 80,600 | ||||||
Deposits | 9,130 | 10,680 | ||||||
$ | 993,664 | $ | 1,074,783 | |||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 115,356 | $ | 132,121 | ||||
Accrued expenses | 106,426 | 113,384 | ||||||
Subscription investment payable | - | 25,000 | ||||||
Deferred revenue | 10,500 | - | ||||||
Total current liabilities | 232,282 | 270,505 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; none issued or outstanding | - | - | ||||||
Common stock, $0.001 par value per share; 240,000,000 shares authorized at March 31, 2014 and December 31, 2013; 135,603,618 issued and outstanding at March 31, 2014 and 132,221,476 at December 31, 2013 | 135,604 | 132,222 | ||||||
Additional paid-in capital | 12,672,605 | 12,418,899 | ||||||
Accumulated deficit | (12,046,827 | ) | (11,746,843 | ) | ||||
Total stockholders' equity | 761,382 | 804,278 | ||||||
$ | 993,664 | $ | 1,074,783 |
1 |
rVUE HOLDINGS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited) |
For the Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Revenue | ||||||||
rVue advertising revenue | $ | 192,664 | $ | 79,289 | ||||
Network | 35,925 | 58,225 | ||||||
228,589 | 137,514 | |||||||
Costs and expenses | ||||||||
Cost of revenue | 169,759 | 64,843 | ||||||
Selling, general and administrative expenses | 346,387 | 1,311,131 | ||||||
Depreciation and amortization | 12,427 | 13,472 | ||||||
Interest income | - | (224 | ) | |||||
528,573 | 1,389,222 | |||||||
Loss before provision for income taxes | (299,984 | ) | (1,251,708 | ) | ||||
Provision for income taxes | - | - | ||||||
Net loss | $ | (299,984 | ) | $ | (1,251,708 | ) | ||
Net loss per common share - basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
Shares used in computing net loss per share: | ||||||||
Basic and diluted | 135,130,206 | 109,000,990 |
2 |
rVUE HOLDINGS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
FOR THE THREE MONTHS ENDED MARCH 31, 2014 |
(unaudited) |
Additional | ||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-In | Accumulated | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
Balance, December 31, 2013 | - | - | 132,221,476 | $ | 132,222 | $ | 12,418,899 | $ | (11,746,843 | ) | $ | 804,278 | ||||||||||||||||
Common stock issued for compensation and services | - | - | 525,000 | 525 | 41,475 | - | 42,000 | |||||||||||||||||||||
Common stock issued | - | - | 2,857,142 | 2,857 | 197,143 | - | 200,000 | |||||||||||||||||||||
Stock based compensation expense | - | - | - | - | 15,088 | - | 15,088 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (299,984 | ) | (299,984 | ) | |||||||||||||||||||
Balance, March 31, 2014 | - | $ | - | 135,603,618 | $ | 135,604 | $ | 12,672,605 | $ | (12,046,827 | ) | $ | 761,382 |
3 |
rVUE HOLDINGS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(unaudited) |
For the Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Operating activities | ||||||||
Net loss | $ | (299,984 | ) | $ | (1,251,708 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 12,427 | 13,472 | ||||||
Stock-based compensation expense | 15,088 | 748,000 | ||||||
Common stock issued for services | - | 40,833 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (17,770 | ) | 112,446 | |||||
Prepaid expenses | (1,046 | ) | 24,274 | |||||
Accounts payable | 25,235 | (51,818 | ) | |||||
Accrued expenses | (6,958 | ) | (40,232 | ) | ||||
Deferred revenue | 10,500 | - | ||||||
Cash used in operating activities | (262,508 | ) | (404,733 | ) | ||||
Investing activities | ||||||||
Payments for property, equipment and software development | (44,200 | ) | (18,283 | ) | ||||
Change in deposits | 1,550 | 100 | ||||||
Cash used in investing activities | (42,650 | ) | (18,183 | ) | ||||
Financing activities | ||||||||
Proceeds from the issuance of common stock | 175,000 | 316,500 | ||||||
Cash provided by financing activities | 175,000 | 316,500 | ||||||
Decrease in cash and cash equivalents | (130,158 | ) | (106,416 | ) | ||||
Cash and cash equivalents, beginning of period | 844,589 | 848,174 | ||||||
Cash and cash equivalents, end of period | $ | 714,431 | 741,758 |
See supplemental non-cash information in Note 11.
4 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
Note 1 – Summary of Significant Accounting Policies
rVue Holdings, Inc., formerly known as Rivulet International, Inc. (“We”, “rVue” or the “Company”), was incorporated in the State of Nevada on November 12, 2008. We are an advertising technology company that has developed and operates an integrated advertising exchange and digital distribution platform – rVue – for the Digital Out-of-Home (“DOOH”) industry.
Basis of Presentation and Preparation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, fair values of financial instruments, useful lives of capitalized software development costs and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. In the opinion of the Company’s management, all adjustments (including normal recurring adjustments) considered necessary to present fairly the unaudited condensed consolidated financial statements have been made.
The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the year ended December 31, 2013, included in our Annual Report on Form 10-K (the “2013 Form 10-K”).
The unaudited condensed consolidated statements of operations for the three months ended March 31, 2014 is not necessarily indicative of the results that may be expected for the entire year.
Note 2 – Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have sustained losses and experienced negative cash flows from operations since inception, and have an accumulated deficit of $12,046,827 at March 31, 2014. These factors raise substantial doubt about our ability to continue to operate in the normal course of business. We have funded our activities to date almost exclusively from equity and debt financings.
We believe that with the cash we have on hand and the cash we expect to raise through future securities issuances, we will have sufficient funds available to cover our cash requirements through the end of the year. We further expect that key strategic relationships that we have entered into and that we expect to enter into will lead to additional revenue opportunities. However, no assurance can be given that such expectations will materialize.
At December 31, 2013 our registered independent public accounting firm expressed substantial doubt as to our ability to continue as a going concern because, since inception, we have incurred substantial losses and negative cash flows from operations. This concern will be addressed by focusing on revenue growth in the coming months. In addition, we raised $1,049,000 in the last two months of 2013 and an additional $200,000 through March of 2014 through the issuance of Common Stock to investors.
Note 3 - Loss Per Common Share
Basic and diluted loss per common share is computed by dividing the loss by the weighted average number of common shares outstanding for the period. Since the Company incurred losses attributable to common stockholders during the three months ended March 31, 2014 and 2013, diluted loss per common share has not been computed by giving effect to all potentially dilutive common shares that were outstanding during the three months ended March 31, 2014 and 2013. Dilutive common shares include incremental shares issuable upon the exercise of stock options and warrants to the extent that the average fair value of the Company’s common stock for each period is greater than the exercise price of the derivative securities.
5 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
The following table sets forth the computation of basic and diluted loss per common share:
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Numerator: | ||||||||
Net loss | $ | (299,984 | ) | $ | (1,251,708 | ) | ||
Denominator: | ||||||||
Weighted-average shares outstanding | 135,130,206 | 109,000,990 | ||||||
Effect of dilutive securities (1) | - | - | ||||||
Weighted-average diluted shares | 135,130,206 | 109,000,990 | ||||||
Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.01 | ) |
(1) | The following stock options, warrants and convertible notes outstanding as of March 31, 2014 and 2013 were not included in the computation of dilutive loss per share because the net effect would have been anti-dilutive: |
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Stock options | - | - | ||||||
Warrants | 64,740 | - | ||||||
64,740 | - |
Note 4 – Financial Instruments
Accounts Receivable
We sell our services directly to our customers. Accounts receivable from one of our customers accounted for 94.7 % of total accounts receivable at March 31, 2014, and accounts receivable from three of our customers accounted for 80.9 % of total accounts receivable at December 31, 2013. We had no allowance for doubtful accounts at either March 31, 2014 or at December 31, 2013.
6 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
Note 5 – Fair Value Measurements
Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest
priority given to Level 1, as these are the most transparent or reliable:
Level 1 - Quoted prices for identical instruments in active markets.
Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable directly or indirectly.
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
We are responsible for the valuation process and as part of this process we used data from an outside source to establish fair value. We performed due diligence to understand the inputs used or how the data was calculated or derived, and we corroborated the reasonableness of external inputs in the valuation process.
7 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
Note 6 – Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of March 31, 2014 and December 31, 2013:
Prepaid expenses | March 31, 2014 | December 31, 2013 | ||||||
Insurance | $ | 8,672 | $ | 8,510 | ||||
Other | 3,230 | 2,346 | ||||||
$ | 11,902 | $ | 10,856 |
Property and Equipment | Estimated Useful Lives | March 31, | December 31, | |||||||||
(Years) | 2014 | 2013 | ||||||||||
Computers and software | 2 - 5 | $ | 91,083 | 91,083 | ||||||||
Furniture and equipment | 3 | 22,977 | 22,977 | |||||||||
Gross property and equipment | 114,060 | 114,060 | ||||||||||
Less accumulated depreciation | (111,649 | ) | (110,995 | ) | ||||||||
Net property and equipment | $ | 2,411 | 3,065 |
Depreciation expense was $654 and $4,681 for the three months ended March 31, 2014 and 2013, respectively.
Software Development Costs | Estimated Useful Lives | March 31, | December 31, | |||||||||
(Months) | 2014 | 2013 | ||||||||||
Software development costs | 18 | $ | 1,192,913 | 1,148,713 | ||||||||
Less accumulated amortization | (1,079,886 | ) | (1,068,113 | ) | ||||||||
Net software development costs | $ | 113,027 | 80,600 |
Amortization
expense was $11,773 and $8,791 for the three months ended March 31, 2014 and 2013, respectively.
December 31, | ||||||||
March 31, 2013 | 2013 | |||||||
Accrued Expenses | 23,833 | 18,966 | ||||||
Personnel costs | 31,400 | 39,000 | ||||||
Professional fees | 33,693 | 37,917 | ||||||
Network costs | 17,500 | 17,500 | ||||||
Other | 106,426 | 113,383 |
8 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
Note 7 - Income Taxes
There is no income tax benefit for the losses for the three-month periods ended March 31, 2014 and 2013, respectively, since management has determined that the realization of the net deferred tax asset is more likely than not to be realized and has created a valuation allowance for the entire amount of such benefit.
Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. At December 31, 2013, we had no unrecognized tax benefits, or any tax related interest or penalties. There were no changes in unrecognized tax benefits during the period ended March 31, 2014. We did not recognize any interest or penalties during 2013 related to unrecognized tax benefits, or through the period ended March 31, 2014.
Note 8 - Stockholders’ Equity and Stock Based Compensation
Equity Awards
Stock Option Activity
A summary of the Company’s stock option activity for the three-month period ended March 31, 2014 is as follows:
Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
Balance at December 31, 2013 | 2,640,000 | 0.17 | 8.41 | - | ||||||||||||
Options granted | - | - | - | - | ||||||||||||
Options exercised | - | - | - | |||||||||||||
Options forfeited | - | - | - | - | ||||||||||||
Balance at March 31, 2014 | 2,640,000 | 0.17 | 8.23 | $ | - | |||||||||||
Exercisable at March 31, 2014 | 1,120,000 | 0.24 | 6.54 | $ | - | |||||||||||
Expected to vest after March 31, 2014 | 1,520,000 | 0.13 | 9.47 | $ | - |
Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable. The aggregate intrinsic value excludes the effect of stock options that have a zero or negative intrinsic value.
Stock-Based Compensation
Stock-based compensation cost for stock options is estimated at the grant date based on the fair-value as calculated by the Black-Scholes Merton (“BSM”) option-pricing model. The BSM option-pricing model incorporates various assumptions including expected volatility, expected life and interest rates. The Company’s computation of expected life is determined based on the simplified method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. The interest rate is based on the U.S. Treasury Yield curve in effect at the time of grant. The Company’s computation of expected volatility is based on comparable companies’ average historical volatility. The Company does not expect to pay dividends. While the Company believes these estimates are reasonable, the estimated compensation expense would increase if the expected life was increased or a higher expected volatility was used. The Company recognizes stock-based compensation cost as expense on a straight-line basis over the requisite service period.
We did not grant any options during the three-month period ended March 31, 2014 or 2013.
9 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
On March 29, 2013, the Board approved in lieu of cash compensation a payment of 4.4 million shares to Michael Mullarkey, a director, as compensation for serving as CEO and CFO after the prior CEO and CFO both left the Company in 2012. Mr. Mullarkey held those temporary positions until April 11, 2013, when a CEO was appointed. Mr. Mullarkey resigned from the Company’s board of directors effective May 31, 2013. The share award was contingent upon the accomplishment of certain objectives set by the board of directors. The accomplishment of the objectives was determined in the first quarter of 2013, and the resulting expense of $748,000 was recorded during the three months ended March 31, 2013.
In addition, the Company issued an aggregate of 816,667 shares to officers and directors in lieu of cash compensation resulting in an additional director fee expense of $40,833 during the three months ended March 31, 2013.
The Company entered into an employment agreement with Mark Pacchini, our CEO, on July 1, 2013. The agreement term is three years and includes mandatory bonuses payable in the Company’s common stock if specific revenue goals are achieved in a twelve month period. During the three months ended March 31, 2014, the revenue goals were amended. As of March 31, 2014 it did not appear probable that any of the required goals in the agreement will be achieved. As a result, there was no stock based compensation expense recognized related to this agreement. The Company will reassess the probability of the Company achieving the revenue goals included in the agreement on a quarterly basis.
Note 9 – Commitments and Contingencies
Other Off-Balance Sheet Commitments
We leased our Ft. Lauderdale office space for our corporate headquarters and technology group under a non-cancelable operating lease which expired June 30, 2013. On July 1, 2013 we moved to a smaller space in Fort Lauderdale - approximately 600 square feet – which we leased at a rate of approximately $2,200 a month. On November 1, 2013 we moved to a smaller space – approximately 140 square feet within the same facility – which we lease at a rate of approximately $1,300 a month. By mid-2014 we intend to move our Fort Lauderdale operations into a less expensive leased space.
On October 4, 2013 we moved our corporate headquarters to Elmhurst, IL, where we lease approximately 2,700 square feet of office space from Real Capital, LLC under a lease contract that expires on September 30, 2015. Lease payments are approximately $3,100 a month through September 30, 2014 increasing to $3,193 a month through September 30, 2015. This facility accommodates our principal sales, marketing, operations, finance and administrative activities.
Contingencies
We are subject to certain legal proceedings that have not been adjudicated, which are discussed in Part II, Item 1 of this Form 10-Q under the heading “Legal Proceedings”. In the opinion of management, the Company does not have probable liability related to these legal proceedings that would materially adversely affect our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. If we fail to prevail in any of these legal matters, the operating results of a particular reporting period could be materially adversely affected.
10 |
RVUE HOLDINGS, INC. |
Notes to Condensed Consolidated Financial Statements |
(unaudited) |
Note 10 – Supplemental Non-Cash Information
During the three months ended March 31, 2013, the Company accrued fees associated with the equity raised in 2013 which were paid in the future issuances of common stock totaling $42,000 and issuance of warrants totaling $27,000. Additionally, in 2013, the Company reversed the accrued director fees balance of $81,667 upon the issuance of shares to officers and directors in lieu of cash compensation.
During the three months ended March 31, 2014, the Company issued common stock totaling $42,000 to Weiss, Sugar, Dvorak and Dusek, Ltd. for accounting services performed in 2013.
11 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This section and other parts of this Form 10-Q contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those Risk Factors discussed in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”) filed with the U.S. Securities and Exchange Commission (“SEC”). The following discussion should be read in conjunction with the 2013 Form 10-K and the Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-Q. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Available Information
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) are filed with the SEC. Such reports and other information filed by the Company with the SEC are available on the Company’s website at www.rvue.com when such reports are available on the SEC website. The public may read and copy any materials filed by the Company with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy, and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov .. The contents of these websites are not incorporated into this filing. Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only.
Executive Overview
We are an advertising technology company and operate rVue, a demand-side platform (“DSP”) for planning, buying and managing DOOH and place-based media advertising. We provide media services, including an online, Internet based DSP that connects advertisers and/or advertising agencies with third party DOOH media or networks, that allows the advertiser to create a targeted advertising campaign and media plan, and negotiate that media plan simultaneously with all the third-party networks selected. Through our strategic media services group, we execute complete campaigns on behalf of advertising clients or their agencies.
The rVue DSP is accessible via the Internet. Through rVue, once an advertising campaign has been agreed to between the advertiser and the DOOH network owner, the DOOH networks receive the display advertising to be shown on their installed base of digital media displays. rVue allows programming and advertising to be customized for display in specific venues, at specific times, and for demographic targeting. We provide the tools for advertisers and advertising agencies to customize campaigns for details as specific as location, customer preference, product availability, current events and other needs. We provide Proof-of-Play analytics and the network statistics necessary to monitor advertising on the networks and assist in evaluating the performance or refinements required for an advertising campaign, in some cases real time. Furthermore, rVue’s integrated analytics provide insight and opportunities for advertisers and agencies to extend the reach, impact and engagement of future campaigns.
As of March 31, 2014, approximately 190 networks comprising approximately 1,000,000 screens and delivering over 250 million daily impressions representing the top 50 market areas were accessible through rVue. Through our strategic media services group, we execute complete campaigns on behalf of advertising clients or their agencies.
We believe that consumers who are mobile are increasingly difficult to reach via traditional analog media platforms such as television, print and radio. Interaction with these consumers via multiple DOOH platforms has advantages. Advertisers desire, for example, to send pre-programmed, customized messages to specific geographic or demographic targets throughout the life of an advertising campaign. This can be achieved via the Internet, and we believe will increasingly be achieved through digital displays located along roadsides, on trains and buses and train platforms and bus stations, in elevators, in government offices, schools, restaurants and bars. All of these DOOH platforms are aggregated for advertiser and advertising agencies via the rVue DSP.
Similar models have been successfully deployed for Internet DSP’s, through Internet ad networks and exchanges that utilize similar services to sell banner and other advertising by websites and Internet publishers with excess inventory to monetize their assets. For example, Yahoo's Right Media Exchange leverages Yahoo's advertisers to assist publishers in monetizing available Internet advertising inventory. Our services provide a digital advertising solution that streamlines the process of planning, buying and optimizing display advertising on DOOH display networks. rVue is designed to simplify the process of buying and selling digital display ads while connecting all the market players — networks, advertisers, agencies, partners and developers — from a unified platform to do business more efficiently and effectively.
Under a contractual arrangement with a large advertiser we provide technical services on a monthly basis for a fixed monthly payment resulting in total monthly revenue of approximately $10,000. Under these arrangements, we provide technical services, including network monitoring, troubleshooting and maintenance, among other services. See the Revenue section for more information.
12 |
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions, and estimates that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Note 1, “Summary of Significant Accounting Policies” of this Form 10-Q and in the Notes to Consolidated Financial Statements in the Company’s 2013 Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and such differences may be material.
Management believes the Company’s critical accounting policies and estimates are those related to software development costs, derivative instruments, revenue recognition, stock-based compensation and income taxes. Management considers these policies critical because they are both important to the portrayal of the Company’s financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. The Company’s senior management has reviewed these critical accounting policies and related disclosures with the Audit Committee of the Company’s Board of Directors.
13 |
Results of Operations
Three Months Ended March 31, 2014 and 2013:
Our unaudited results of operations for the three-month periods ended March 31, 2014 and 2013 were as follows:
For the Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Revenue | ||||||||
rVue fees | $ | 192,664 | $ | 79,289 | ||||
Network | 35,925 | 58,225 | ||||||
228,589 | 137,514 | |||||||
Costs and expenses | ||||||||
Cost of revenue | 169,759 | 64,843 | ||||||
Selling, general and administrative expenses | 346,387 | 1,311,131 | ||||||
Depreciation and amortization | 12,427 | 13,472 | ||||||
Interest income | - | (224 | ) | |||||
528,573 | 1,389,222 | |||||||
Loss before provision for income taxes | (299,984 | ) | (1,251,708 | ) | ||||
Provision for income taxes | - | - | ||||||
Net loss | $ | (299,984 | ) | $ | (1,251,708 | ) | ||
Net loss per common share - basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
Shares used in computing net loss per share: | ||||||||
Basic and diluted | 135,130,206 | 109,000,990 |
Revenue
Revenue was $228,589 for the three-month period ended March 31, 2014 compared to $137,514 for the three-month period ended March 31, 2013, a $91,075 increase, or 66.2%. We earned revenue as follows:
Three Months ended March 31, | ||||||||||||||||
Revenue Category | 2014 | 2013 | $ Change | % Change | ||||||||||||
rVue Revenue – Core Fees | $ | 192,664 | $ | 79,289 | $ | 113,375 | 143.0 | % | ||||||||
Network Revenue – Non Core Fees | 35,925 | 58,225 | (22,300 | ) | -38.3 | % | ||||||||||
Total Revenue | $ | 228,589 | $ | 137,514 | $ | 91,075 | 66.2 | % |
rVue Revenue – Core fees
We earn transaction fees from advertisers and agencies for placing advertising with networks through rVue and generate advertising revenue from advertisers who engage us to execute campaigns through managed services. The transaction fee is a percentage of the advertising dollars spent on campaigns, which varies based upon the level of targeting, reporting and other assistance we provide. We act, in certain transactions, as a principal to purchase advertising on behalf of a client who issues a purchase order for the strategic media services we provide. We contract in our name with the networks to purchase the necessary space and time to execute the campaign. In these instances, we assume the full financial risk of the campaign and are liable to the networks for the cost of network space and time.
14 |
rVue revenue was $192,664 for the three-month period ended March 31, 2014, a $113,375 improvement over the $79,289 rVue revenue for the three-month period ended March 31, 2013. While the majority of our revenue historically has been from network services and license fees, the development of the rVue platform and generating revenue and fees from the rVue platform is the focus of our business. As the rVue platform gains traction with advertisers and agencies, we expect to generate additional revenue and fees in 2014 from advertisers and agencies for placing advertising with DOOH networks through rVue. This is the focus of our business and the area in which we expect to generate the majority of our revenue in 2014 and beyond. We cannot assure you that advertisers or agencies will accept the rVue platform as their platform of choice for placing advertising with DOOH networks.
Network Revenue – Non-core fees
Network revenue was $35,925 for the three-month period ended March 31, 2014; a $22,300, or 38.3%, decrease compared to the $58,225 for the three-month period ended March 31, 2013. During 2014 we earned fixed monthly fees of $11,975 from one client. We expect to continue to receive revenue in the amount of $10,500 monthly from these services to this client for the remainder of 2014, but we do not intend to pursue additional network-related service opportunities as the focus of our business is the rVue platform.
Cost of Revenue
Cost of revenue consists primarily of expenses for the purchase of advertising impressions from third-party networks, the cost to deliver network services and the cost of producing content for our network clients.
Cost of revenue was $169,759 for the three-month period ended March 31, 2014 compared to $64,843 for the three-month period ended March 31, 2013, a $104,916 increase, or 161.8%, and was comprised of:
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2014 | 2013 | $ Change | % Change | |||||||||||||
Compensation and benefits | $ | 2,042 | $ | 1,349 | $ | 693 | 51.4 | % | ||||||||
Network services | 186 | 180 | 6 | 3.3 | % | |||||||||||
rVue operations | 167,531 | 63,314 | 104,217 | 164.6 | % | |||||||||||
Total | $ | 169,759 | $ | 64,843 | $ | 104,916 | 161.8 | % |
The increase in cost of revenue is attributable to a 143.0% increase in rVue revenue compared to March 31, 2013, and the change in revenue category mix. The increase in core revenues increases the cost of network expenses which are recorded in rVue operations.
Selling, general and administrative expenses
Selling, general and administrative expenses (“SG&A”) were $346,387 for the three-month period ended March 31, 2014 compared to $1,311,131 for the three-month period ended March 31, 2013, a $964,744 decrease, or 73.6%. Changes by major component of SG&A are:
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2014 | 2013 | $ Change | % Change | |||||||||||||
Compensation and benefits | $ | 153,607 | $ | 135,438 | $ | 18,169 | 13.4 | % | ||||||||
Stock-based compensation expense | 15,088 | 748,000 | (732,912 | ) | -98.0 | % | ||||||||||
Facility expense | 17,943 | 35,063 | (17,120 | ) | -48.8 | % | ||||||||||
Communications expense | 15,926 | 31,616 | (15,690 | ) | -49.6 | % | ||||||||||
Travel expense | 4,896 | 19,776 | (14,880 | ) | -75.2 | % | ||||||||||
Advertising and marketing expense | 570 | 65,905 | (65,335 | ) | -99.1 | % | ||||||||||
Investor relations and investment banking fees | 1,711 | 707 | 1,004 | 142.0 | % | |||||||||||
Professional and consulting fees | 95,004 | 247,327 | (152,323 | ) | -61.6 | % | ||||||||||
Office support and supply expense | 41,642 | 27,299 | 14,343 | 52.5 | % | |||||||||||
Total | $ | 346,387 | $ | 1,311,131 | $ | (964,744 | ) | -73.6 | % |
15 |
Compensation and benefits increased $18,169, or 13.4% for the three months ended March 31, 2014 when compared to the three months ended March 31, 2013. This change was due to a $25,915 increase in the amount of payroll costs being capitalized for software development, a $7,735 increase in payroll and a $37,135 increase in the vacation accrual.
Stock-based compensation expense decreased $732,912 or 98.0% for the three months ended March 31, 2014 when compared to the three months ended March 31, 2013. This is due to the $748,000 of stock compensation paid to the prior CEO for his services performed as the acting CEO.
Advertising and marketing expense decreased by $65,335 or 99.1%, in the three-month period ended March 31, 2014, when compared to the three-month period ended March 31, 2013. This decrease is a result of rVue’s focus on cost reduction.
Professional and consulting fees for the three-month period ended March 31, 2014 decreased $152,323 or 61.6%, compared to the three-month period ended March 31, 2013. Consulting fees decreased approximately $117,000 due to consulting fees paid to former CEO Jason Kates, as prescribed in his separation agreement, legal fees decreased $14,105, fees related to SEC filings and Sarbanes-Oxley work decreased $10,583 and directors’ fees increased $66,608 while accounting and other fees increased $55,083.
Depreciation and amortization
Depreciation was $654 for the three-month period ended March 31, 2014 compared to $4,681 for the three-month period ended March 31, 2013, a $4,027 decline, or 86.0%. For the three-month period ended March 31, 2014, amortization expense for software development was $11,773, compared to $8,791 for the three-month period ended March 31, 2013, a $2,982 increase, or 33.9%. The decrease in depreciation is due to fixed assets being almost completely depreciated. Amortization expense for software development costs increased due to an increase in the amount of payroll being capitalized due to a refocus on software development beginning in the third quarter of 2013.
Interest income
Interest income was $0 for the three-month period ended March 31, 2014 compared to $224 for the three-month period ended March 31, 2013, a $224 decrease, or 100%. The Company switched banking relationships in the fourth quarter of 2013 and does not have an interest bearing account with its new bank. The Company is currently working with its bank to establish an interest bearing account. Interest income is a function of cash on hand.
16 |
Liquidity and Capital Resources
As of March 31, 2014, we had cash and cash equivalents totaling $714,431. Since our inception, we have incurred net losses, and at March 31, 2014, we had an accumulated deficit of $12,046,827 and total stockholders’ equity of $761,382. We expect to continue to incur losses in fiscal 2014. The adequacy of our cash balances for the remainder of the year is dependent on an increase in business beyond current levels or additional investments by existing or new shareholders.
We did not have any material commitments for capital expenditures at March 31, 2014. We have budgeted capital expenditures of approximately $200,000 for fiscal 2014, primarily capitalized labor for software development. Any required expenditure will be completed through internally generated funding or from proceeds from the sale of common or preferred stock, or borrowings.
We did not have any significant elements of income or loss arising from continuing operations in the three-month periods ended March 31, 2014 and 2013. While our business is marginally seasonal, we do not expect this seasonality to have a material adverse effect on our results of operations or cash flows.
Cash used in operating activities
Net cash used in operating activities totaled $262,508 for the three-month period ended March 31, 2014 compared to $404,733 for the three-month period ended March 31, 2013. In the three-month period ended March 31, 2014, cash was used to fund a net loss of $299,984, reduced by depreciation of $12,427, stock based compensation of $15,088, and decreased due to changes in operating assets and liabilities totaling $9,961.
In the three-month period ended March 31, 2013, cash was used to fund a net loss of $1,251,708, reduced by depreciation of $13,472, stock-based compensation expense of $748,000 and common stock issued for services valued at $40,833, and changes in operating assets and liabilities totaling $44,670.
Cash used in investing activities
Net cash used in investing activities totaled $42,650 for the three-month period ended March 31, 2014 compared to $18,183 in the three-month period ended March 31, 2013. In the three-month period ended March 31, 2014, cash used in investing activities consisted of $44,200 for software development costs and a decrease in deposits of $1,550. In the three-month period ended March 31, 2013, cash used in investing activities consisted of $18,283 for software development costs and $100 for deposits.
Cash from financing activities
Net cash provided by financing activities totaled $175,000 for the three-month period ended March 31, 2014, which were the proceeds from the sale of common stock. For the three-month period ended March 31, 2013, net cash provided by financing activities totaled $316,500 and were the proceeds from the sale of common stock.
Financial condition
As of March 31, 2014, we had a working capital surplus of $636,814, an accumulated deficit of $12,046,827 and total stockholders’ equity of $761,382, compared to a working capital surplus of $709,933, an accumulated deficit of $11,746,843 and total stockholders’ equity of $804,278 at December 31, 2013. The decline in our financial condition was due to losses incurred net the proceeds from the sale of $175,000 of stock during the quarter ended March 31, 2014.
We believe that with the cash we have on hand and the cash we expect to raise through future securities issuances, we will have sufficient funds available to cover our cash requirements through the end of the year. We further expect that key strategic relationships that we have entered into and that we expect to enter into will lead to additional revenue opportunities. However, no assurance can be given that such expectations will materialize.
At December 31, 2013 our registered independent public accounting firm expressed substantial doubt as to our ability to continue as a going concern because, since inception, we have incurred substantial losses and negative cash flows from operations. This concern will be addressed by focusing on revenue growth in the coming months. In addition, management will review projected losses for the remainder of 2014 against cash on hand and consider raising capital if required.
17 |
Off-Balance Sheet Arrangements
Since our inception, except for standard operating leases, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.
18 |
Item 3. Quantitative And Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide the information required by this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of March 31, 2014, to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Inherent Limitations Over Internal Controls
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the Company’s assets; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and |
(iii) | provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. |
Management, including the Company’s principal executive officer and principal financial officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three-month period ended March 31, 2014 which were identified in connection with management’s evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
19 |
From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business.
On or about September 14, 2012, Casville Investments, Ltd, MBC Investment, SA, and Watkins International, Ltd., shareholders of Argo Digital Solutions, Inc., asserted claims individually and derivatively on behalf of Argo against rVue Holdings, Inc., Jason M. Kates, Richard J. Sullivan, David A. Loppert, World Capital Markets, Inc., and Solutions, Inc. in the United States District Court for the Southern District of New York. The plaintiffs alleged that they were injured as a result of the alleged mismanagement of Argo and the May 2010 asset purchase transaction between Argo, rVue, Inc. and rVue Holdings, Inc. On December 21, 2012, we moved to dismiss the Complaint on various grounds and moved to transfer the case from New York to Florida. The case was transferred to Florida and the motion to dismiss on other grounds was not ruled upon. At all times, we maintained and still maintain that the case was without merit and, therefore, we vigorously defended ourselves in connection therewith. Ultimately, the parties reached a settlement to fully resolve the case. The parties’ settlement agreement was approved by the Florida Court and, on May 2, 2014 the case was dismissed with prejudice pursuant to the Final Order of Dismissal with Prejudice.
On or about March 8, 2011, Viewpoint Securities, Inc. commenced an action in the Circuit Court of the 17th Judicial District in Broward County, Florida, alleging that we owe them a placement agent fee of $210,000 and warrants to purchase 175,167 shares of our common stock for purported services rendered in connection with our December 2010 private placement. On July 29, 2011, we answered their Second Amended Complaint and asserted various defenses to the claims asserted therein. Additionally, we filed a Counterclaim for rescission of the Agreement. On January 9, 2012, Viewpoint filed an amended answer to our counterclaim. We believe the case is without merit and are vigorously defending ourselves in connection therewith. In the opinion of management, we do not believe that we have a probable liability related to this legal proceeding that would materially adversely affect our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. If we fail to prevail in this legal matter, the operating results of a particular reporting period could be materially adversely affected.
20 |
Item 1A. | Risk Factors. |
Not applicable.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
On January 10, 2014, the Company issued 525,000 shares of its common stock to Ken Dvorak, as compensation for services provided to the Company. The shares were issued to Mr. Dvorak without registration in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act, as a transaction by the Company not involving any public offering.
Item 3. | Defaults Upon Senior Securities. |
None.
Item 4. | Mine Safety Disclosures. |
Not applicable.
Item 5. | Other Information. |
None.
21 |
Item 6. | Exhibits. |
(a) | Index to Exhibits |
Exhibit No. | Exhibit Description | |
31.1* | Rule 13a-14(a) Certification of Chief Executive Officer. | |
31.2* | Rule 13a-14(a) Certification of Chief Financial Officer. | |
32.1** | Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. | |
EX-101.INS * | XBRL Instance Document | |
EX-101.SCH * | XBRL Taxonomy Extension Schema Document | |
EX-101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document | |
EX-101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document | |
EX-101.LAB * | XBRL Taxonomy Extension Label Linkbase Document | |
EX-101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith.
** Furnished herewith.
22 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
rVue Holdings, Inc. | ||
(Registrant) | ||
Date: May 13, 2014 | By: | /s/ Mark P. Pacchini |
Acting Chief Financial Officer | ||
(Duly Authorized Officer and | ||
Principal Financial Officer) |
23 |
EXHIBIT INDEX | ||
Exhibit No. | Exhibit Description | |
31.1* | Rule 13a-14(a) Certification of Chief Executive Officer. | |
31.2* | Rule 13a-14(a) Certification of Chief Financial Officer. | |
32.1** | Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. | |
EX-101.INS * | XBRL Instance Document | |
EX-101.SCH * | XBRL Taxonomy Extension Schema Document | |
EX-101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document | |
EX-101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document | |
EX-101.LAB * | XBRL Taxonomy Extension Label Linkbase Document | |
EX-101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith.
** Furnished herewith.
24 |
Exhibit 31.1
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Mark P. Pacchini, certify that: | |
1. | I have reviewed this Quarterly Report on Form 10-Q of rVue Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2014 | /s/ Mark P. Pacchini |
Mark P. Pacchini | |
Chief Executive Officer | |
(Principal Executive Officer) |
Exhibit 31.2
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Mark P. Pacchini certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of rVue Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2014 | /s/ Mark P. Pacchini |
Mark P. Pacchini | |
Acting Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of rVue Holdings, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark P. Pacchini, Chief Executive Officer and acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ Mark P. Pacchini | |
Mark P. Pacchini | |
Chief Executive Officer | |
Date: May 13, 2014 | |
/s/ Mark P. Pacchini | |
Mark P. Pacchini | |
Acting Chief Financial Officer | |
Date: May 13, 2014 |
A signed original of this written statement required by Section 906 has been provided to rVue Holdings, Inc. and will be retained by rVue Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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