Troika Media Group Facing Challenges as a Going Concern

Troika Media Group, a branding and marketing company, has expressed concerns about its ability to sustain as a going concern. The company revealed that it is currently in discussions with its senior lender, Blue Torch, regarding waivers that are set to expire on Friday.

In addition, Troika reported a 31% decrease in revenue for the second quarter ended June 30, amounting to $58.7 million. Despite the decline in revenue, the company managed to narrow its net loss from $18.1 million to $12.3 million during the same period. This drop in revenue was primarily attributed to reduced spending by insurance clients within the managed services revenue stream.

Following this news, Troika's shares dropped by 6.4% after hours, settling at $1.03.

The company acknowledged that its capital structure issues, as well as the costs associated with the Blue Torch debt, have significantly affected its liquidity. Troika also mentioned the substantial amount of time management has devoted to the restructuring process.

Troika failed to make a principal and interest payment to Blue Torch on September 30. However, the company disclosed in a securities filing on Wednesday that the outside date for a waiver has been extended from last Friday to the upcoming one.

Earlier this year in February, Troika enlisted the services of Jefferies to optimize its capital structure and explore alternative strategies. The company stated its commitment to refining its business model since acquiring Converge Direct in the second quarter of 2022. This move aimed to exploit sustainably higher margin opportunities and bring about significant improvements to strategic and financial outcomes.

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