Savannah, Ga. (May 23, 2002) -- Addressing concerns over CPA2Biz's tenuous cash position, chief executive Brett Prager said the portal would need $10 million to $15 million in additional equity to reach a break-even point -- which he hopes to reach by the end of the 2003 fiscal year or the first quarter of 2004.Of that, Prager said $10 million would be made available contingent on meeting performance criteria, and $5 million would be generated from potential future transactions, which he declined to identify. His remarks came during a presentation Tuesday at the American Institute of CPAs' Spring Council meeting.
At the end of its current fiscal year, which ends June 30, Prager said that the portal would have $10 million in cash.
"A lot has changed in the world and in the economy since Council approved CPA2Biz. It has not yet achieved what we had hoped," AICPA chairman Jim Castellano said prior to the discussion. In light of that, the AICPA requested a rework of its marketing and distribution agreements with the portal to allow the AICPA to support SSLLC, and both the institute and the portal have appointed special committees to oversee those negotiations.
Meanwhile, CPA2Biz is in the process of developing a revised business plan that will take into account the restructuring of the relationship with the AICPA and the February acquisition of Rivio. The revised business plan is expected to be presented at the next AICPA board meeting.
Prager noted that the portal, which recently debuted a new look and rolled out a payroll referral program, has garnered nearly 80,000 registered users, and that traffic has jumped 25 percent since the re-launch. He also noted that CPA2Biz has averaged over $75,000 a week in online sales. And by virtue of its recent $7.5 million funding by Nationwide the site now offers a 401(k) program.
-- Bill Carlino and Melissa Klein
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access