Just to note this for others, I have included the email MediaTrust sent out to everyone yesterday:
Dear MediaTrust Valued Partner,
As many of you know, MediaTrust has been a leader in performance-based Internet advertising since inception in 2004. The industry has changed much over the last 8 years and MediaTrust has had to evolve and re-invent itself on a number of occasions in order to stay relevant and viable; the previous business model was unsustainable as the industry became more competitive to the point that most of MediaTrust’s operations became a commodity business with low margins and high working capital requirements. By the time I became involved with MediaTrust, in mid-2010 after MT acquired Bardon Advisors, the industry had changed so dramatically that a complete business pivot was required in order to survive.
That business model pivot required investment in 2010 and 2011 and resulted in the launch of the MediaTrust Performance Exchange (“MTPX”), our proprietary CPC platform, in-mid 2011. Through 2011 and 2012, MediaTrust was again going in the right direction. Revenues and profits had grown substantially, an acquisition was consummated, and the Company achieved its’ best quarter in over three years.
While the current operations of the business were heading in the right direction, many of the legacy business obligations remained on the Balance Sheet and management spent much of its time actively managing cash and payments, reducing expenses, and streamlining the business. The Company’s founders and institutional investor have continued to re-invest millions of dollars each year in the business, though did not have the financial resources to continue to invest more in MediaTrust in order to allow us to operate and meet all of our current and historical obligations as an independent company any longer.
Despite having an otherwise healthy and profitable operating business, our legacy Balance Sheet liabilities have made it necessary to find a strategic partner. As a result, we have signed a definitive merger agreement with Webxu, a publicly traded company on the OTC trading under WBXU. This merger gives us the opportunity to partner with a company who understands our industry and who can more easily raise money as a public entity.
While this merger does not solve all of MediaTrusts’ financial issues overnight, this transaction is a positive first step in a process that will hopefully lead to the ability to continue to operate and grow our business while paying down all historical obligations.
Webxu is committed to raising the required capital to fund MediaTrust. That was the primary factor for completing the merger. Webxu has a strong management team with experience in Internet Advertising and a common vision on how to build and run a great company. With their commitment to raise much needed capital we hope to be in a position to begin paying off trade payables and earning back your confidence as a trusted partner.
I will be reaching out to you individually in the near future to walk you through our plans and give you a detailed update on your specific account status and next steps.
Thank you for your continued support.
Best Regards,
Keith Cohn
President and CEO
MediaTrust
