Ominto (Dubli) loses $24.5 million dollars over two years

Things are looking pretty bleak over at Ominto, with the company yesterday announcing combined losses of almost $25 million since 2015.

The revelation is part of Ominto’s annual Form 10-K filing, filed on January 13th for the fiscal year September 30th 2014 to September 30th 2015.

Dubli renamed itself Ominto mid last year, with the company announcing a “new” ecommerce shopping portal set to launch later this year.

The announcement was made against the backdrop of a major audit conducted late last year, which reported Ominto to have ongoing concerns.

We do not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and raising additional funds.

Our business model may not generate revenues sufficient to support our operations.

Such insufficiency and/ or losses in the future could have a material adverse effect on our financial condition, our ability to pay our debts as they become due, our cash flows and our ability to support our operations.”

Our  plans  for  mitigating  the  going  concern  qualification  include financing  our  future  operations  through  sales  of  our  common  stock  and/or  debt  and  the  eventual  profitable  operation  of  our  business.

The uncertainty of our achievement of these factors raises substantial doubt about our ability to continue as an ongoing concern.

In addition to flailing business revenue, the audit also found glaring issues with Ominto’s management:

Our policies and procedures with respect to the review, supervision and monitoring of our accounting operations throughout the organization were either no designed or not formalized;

2) We  did  not  maintain  an  effective  internal  control  monitoring  function  due  to  insufficient  policies  and  procedures  to effectively  communicate  and determine the adequacy of our internal control over IT and financial reporting for monitoring ongoing effectiveness thereof;

3) We did not maintain formal cash flow forecasts and business plans, to guide respective employees in critical decision-making processes; and

4) We did not maintain procedures and effective controls over the preparation, review and approval of account reconciliations and application programming interfaces with third parties or our own systems.

These issues saw Dubli lose $10.6 million and $13.9 million in 2014 and 2015 respectively, with accumulated losses since 1999 topping out at $49.3 million dollars.

Despite this, the company remains optimistic about the future. In the 10-K filing, Ominto refers to itself as ‘a global leader in online Cash Back shopping worldwide‘ and ‘one of the largest direct selling digital commerce companies in the world‘.

We believe Ominto was first to market in many countries including Denmark, Germany, Russia, Switzerland, Austria and Spain with its Cash Back shopping and travel e-commerce platform.

We expect to be the first mover in several additional countries over the next 18 months.

Ominto will be “moving into” these countries with a slightly tweaked e-commerce platform, which is otherwise more of the same.

We receive a commission each time shoppers make a purchase on a third party website through our shopping portals.

One particularly sore point for the company last year was the very public distancing from Dubli’s top affiliates, Matt Trainer, Randy Schrum, Kristian Hoenicke, Tony Rush and John Lavenia.

To date, we have not yet obtained enough license fees from our BAs, Premium or VIP membership fees or facilitated enough purchase activity on our co-branded sites to generate net revenues (net of Cash Back to customers) sufficient to support our operations.

Schrum, Hoenicke, Rush and Lavenia were terminated in September, amid claims they had been trying to resign for weeks. Trainer accused Dubli of lying to affiliates, which Dubli met with threats of a lawsuit.

Dubli also set its lawyers onto Troy Dooly, in an attempt to stifle reporting on Dubli here at BehindMLM.

The end-result of Dubli’s poor performance as an MLM company, affiliate issues, poor management decisions and failure to sustain a piece of the e-commerce niche, is this:

So where does that leave Ominto going forward?

Our  plans  for  mitigating  the  going  concern  qualification  include financing  our  future  operations  through  sales  of  our common  stock  and/or  debt  and  the  eventual  profitable  operation  of  our  business.

The uncertainty of our achievement of these factors raises substantial doubt about our ability to continue as a going concern.

Is Ominto limping along on its last legs, or will 2016 be the year they finally turn around almost fifty million dollars in losses?

Stay tuned…

Update 28th January 2016 – In a further blow to the Ominto, the last week has seen both the CEO and CFO of Dubli resign.

On January 26th, 2016, the Company accepted the resignation of its CEO/President Ivan Braiker and its CFO Tom Virgin.

Mr. Braiker also resigned from his position as a director of the Company

Effective January 26th, 2016, as a result of Mr. Braiker’s resignation from  is positions with the Company, the Company’s Employment Agreement with Ivan Braiker to serve as CEO/President and member of the Board of Directors was terminated by mutual consent pursuant to a severance and agreement with Mr. Braiker.

The Company entered into a Severance Agreement with Mr. Ivan Braiker which provided severance equal to four months of regular pay of $300,000 per annum to Mr. Braiker which shall be paid to him in accordance with the Company’s normal payroll procedures.

Effective January 26th, 2016, as a result of Mr. Virgin’s resignation from his positions with the Company, the Company’s Employment Agreement with Tom Virgin to serve as CFO was terminated by mutual consent pursuant to a severance and agreement with Mr. Braiker.

The Company entered into a Severance Agreement with Mr. Virgin which provided severance equal to four months of regular pay of  $250,000 per annum to Mr. Virgin which shall be paid to him in accordance with the Company’s normal payroll procedures.

Mr. Mitchell Hill, age 56, who is currently a director of the Company and has served as Chairman of the Audit Committee since June 2015, was appointed Interim CEO by the Company’s Board of Directors as of January 26th.

“Abandon ship!” or trimming the fat?

Update 25th February 2016 – Dubli recently posted their fourth quarter earnings for 2015.

Revenue ‘due primarily to increased sales of VIP memberships and increased commission income‘ rose to $5.4 million, up from $4.7 million the same time last year.

Net losses however almost doubled to $2 million, up from $1.1 million in 2014.

To put that into perspective, an increase in Dubli’s revenue by 14.8% resulted in an 81.8% increase in losses.

Going into 2016, it appears Dubli is still bleeding millions of dollars in losses. For now, the more Dubli makes the more they seem to lose.