SWMX reported that Q2 revenues were down 100K to 600K, which was attributed to a change in strategy for the company, which operates SoftWave Media Exchange, an online marketplace for radio and TV spot inventory. But the company’s operating loss decreased by 300K to 2.4 million. SWMX said it has shifted from seeking increased transaction volume from opt-in participation from stations and marketers to a new strategy of "pursuing licensing agreements to deliver private label and software as a service (SAAS) application functionality to advertisers, agencies and media owners on an enterprise basis." The first such deal was recently announced, with Zimmerman Advertising (8/9/07 RBR #155).
"While we anticipate our shift in strategy to focus on cultivating enterprise relationships with marketers and media owners will result in incrementally reduced revenue through Q3’07, we firmly believe it is the best path to increase exchange membership and establish SWMX as the standard operating application supporting advertising transaction and management activity for buyers and sellers of media," said Josh Wexler, CEO of SWMX. "Our recently finalized partnership with Zimmerman Advertising validates that belief, represents a substantial potential revenue opportunity for SWMX and we are working diligently to forge similar agreements with other leading agencies and media owners in coming months," he added.
Despite reducing its operating loss, SWMX saw its net loss increase by 200K to 2.9 million, which still worked out to one cent per share, the same as the previous year.
RBR observation: SWMX is still working to line up 10 million in new equity capital, but its lender, BlueCrest Capital Finance, has been willing to wait while the company found that new investment, extending the original deadline (7/12/07 RBR #135) to August 1st and so far letting that deadline slide as well. SWMX recently authorized an issue of 10 million shares of new preferred stock, but there’s no indication yet how that will be used.