When a company files for bankruptcy, details that have been kept on the inside — or sometimes provided without any way for the the listener to verify, suddenly become available as the company tries to justify the filing and its need for various approvals. Amp’d Mobile needs permission to use its bank accounts, to pay salaries, to do everything that keeping a company running during bankruptcy entails. Monday’s filings in U.S. Bankruptcy Court for the District of Delaware, the first follow-up to the actual bankruptcy petition filed late Friday, include subscription numbers, funding amounts, spending and more:
— Amp’d raised a total of about $350 million in equity investment through June 1 and approximately $31 million of secured and unsecured debt investments. Kings Road Investment holds an April 2 promissory note in the amount of $30 million.
— Customer acquisition was “extremely low” following the December 2005 launch and through the first half of 2006; an aggressive ad campaign helped lead to a boost in subscribers. Amp’d hit about 100,000 subs by the end of 2006 with “unprecedented growth” from November ’06 through February ’07. (
I have not yet seen a current subscriber total.) A source familiar with the situation says Amp’d had more than 200,000 subs at the time of the filing.
— That dovetailed with customer collection items “at rates higher than industry norms.” Approximately 90 percent of the customers were on 18-month contracts. “The debtor began to find a host of credit and collections problems and contributed ultimately to a liquidity crisis.” By late May, the company realized its non-paying customers approached 80,000.
— The bi-monthly (the filing says bi-monthly; it’s twice monthly) payroll for some 229 U.S. employees averages approximately $987,000 — nearly $2 million a month. (I’ve confirmed this with a source familiar with the numbers.) Monthly employee expenses run $175-200,000. Health benefits run about $119,000 a month; various insurance benefits run $5,000 a month. As of the petition date, the company estimates it owed less than $70,000 with no one employee scheduled to get more than $10,000. Just over $37,000 in employee 401K funds have yet to be paid; that’s one of the things the company wants approval to do.
— Amp’d estimates that it has no less than $6 million in accrued but unpaid sales, use and other taxes.
— As of June 1, the company held $992,000 in unused airtime for prepaid plans and customers are owed $778,000 in rebates.
— Amp’d has been averaging $500,000 a month on product protection and replacement plans. Customers owe a total of $2 million in program fees.
— Amp’d served more than four million games, videos and songs in 1Q07, more than twice the amount of the previous quarter. Overall, the company has delivered more than 6 million downloads.
Update: Finally had time to check out Kings Road Investments; it’s a wholly owned subsidiary of Polygon Global Opportunities Master Fund. Polygon first invested in Amp’d as part of the $150 million third round. I would not be surprised to see Polygon provide the Debtor-in-Possession (DIP) funding.
Update II: About the 80,000 non-paying subs. Given what we know of Amp’d’s billing issues, the better question may be how many were billed at all.