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Odimo declares Q4 & fiscal yr 2005 results

31 Mar '06

3 min read

Premier online luxury goods retailer, Odimo Incorporated announced financial results for the fourth quarter and fiscal year ended December 31, 2005.

The Company also announced that its independent registered public accountings firm's report on its financial statements for the fiscal year ended December 31, 2005 includes an explanatory paragraph regarding the Company's ability to continue as a going concern. The going concern qualification reflects the uncertainty that the Company will generate sufficient cash flows to meet its cash flow and working capital needs.

The Company requires additional financing to continue its operations, meet its operational goals and to pursue its long term strategy. The Company is currently implementing strategies that include: (i) reducing costs, (ii) seeking equity and debt financing, and (iii) exploring the sale of the Company or certain assets. There is no assurance that the Company will be able to successfully implement any of these strategies. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As part of its strategy to reduce costs, the Company has converted its diamond sourcing strategy from a mix of an inventory and online model to a completely virtual online model and has entered into an agreement to terminate its Supply Agreement with SDG Marketing, Inc. In connection with this termination, the Company returned to SDG Marketing approximately $3.7million of diamond inventory to satisfy a $3.7 million payable and $700,000 of diamond inventory as payment in kind to satisfy a $700,000 payable.

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