When the engagement began, this $20 million supplement and lab testing company was running low on cash reserves and facing potential liquidation.
Distrust among board members had brought all growth initatives to a halt, and the company attempted to sell itself to avoid insolvency. The business was factoring receivables at high rates, behind on shareholder debt payments, and losing cash from a multi-million dollar satellite lab. With only months of runway remaining, closing a new deal was the only path forward. Enhance immediately took control of board meetings by creating a robust, conservative budget and credible financial reporting package, rebuilding trust and allowing management to focus on operations instead of political battles.
Within six months, Enhance closed the satellite lab, discovered and filed for $1 million in sales tax refunds on incorrectly taxed equipment, and successfully guided the 100-employee company through due diligence to close a strategic sale based on their proprietary software as a selling point.
Enhance focused on rapid stabilization of the board relationship and cash position while preparing the company for a successful sale.
"We took back the board. They were high-fiving me and hugging me, so grateful that it went well."
- CEO/COO reflecting on first successful board meeting
The engagement saved the company from potential insolvency. By stabilizing the board dynamic and establishing financial credibility, Enhance enabled management to focus on running the business instead of working through political battles at every board meeting.
The company successfully closed a strategic sale to a large acquirer interested in their proprietary internal software platform. The six-month engagement provided the confidence and clarity necessary for the buyer to proceed with due diligence despite the company's precarious cash position and declining industry fundamentals.
While underlying cash challenges remained difficult due to slower-than-expected diversification into food testing, the establishment of financial integrity and board stability made the difference between a successful exit and insolvency for the 100-employee lab.