AlphaServ.com Gets Cash Infusion
AlphaServ.com, which provides Internet consulting and networking services, said Tuesday it has arranged a $5-million cash infusion and will spin off one of its units to shore up its bottom line.
The Santa Ana-based company, one of the county’s most consistently unprofitable technology firms, also posted a third-quarter loss--instead of returning to profitability as its executives had predicted late last year. In addition, AlphaServ.com’s chief financial officer, Jeffrey J. Dunnigan, announced that he would be leaving the company by week’s end to launch a venture capital firm in Newport Beach.
For the record:
12:00 a.m. Nov. 13, 1999 For the Record
Los Angeles Times Saturday November 13, 1999 Orange County Edition Business Part C Page 2 Financial Desk 1 inches; 28 words Type of Material: Correction
AlphaServ.com earnings--AlphaServ.com paid $348,000 in the third quarter in dividends and other payments. The payout was incorrectly described as a charge against earnings in a story Wednesday.
“We’ve made a lot of investments in [internal technology], as well as absorbed a lot of losses from our Internet [software] unit,” said Douglas J. Tullio, chief executive and chairman of AlphaServ.com. “Things are improving, and our numbers will reflect that going forward.”
The company incorporated its 20-person AlphaConnect unit as a separate, but wholly owned, entity in Delaware last month, and renamed it NQL Solutions Inc. The unit builds “intelligent agents,” automated software programs, such as scanning a variety of trading systems to find the most favorable price at any moment for an investor trying to buy or sell stock.
Of the $5-million equity financing agreement with Hampshire Equity Partners, $500,000 of it will go to fund the Internet start-up, officials said.
AlphaServ.com officials also are trying to find an outside investor to take a minority stake in NQL Solutions, and spin the company off as a stand-alone business.
“We’re hoping to license the technology to other companies, as well as create solutions for customers,” said Denny Michael, vice president of marketing for AlphaServ.com. He is also running the day-to-day operations of NQL Solutions, which is based in AlphaServ.com’s headquarters.
The company does not break out separate results for its units.
On Tuesday, the company reported a loss of $624,000, or 8 cents a share, for the third quarter ended Sept. 30. That is a dramatic improvement from a year earlier, when the company lost $1.5 million, or 14 cents a share. Revenue increased nearly 37%, to $9 million.
The results include a $348,000, or three cents a share, in one-time charges.
AlphaServ.com’s stock price fell six cents on Tuesday, closing at $2.31 a share.
