Financial Woes Continue for ProElite

September 6, 2012

In June 2011, Stratus Media Group Inc. acquired 95% ownership in the MMA promotion ProElite, Inc. Stratus also owns a business line that operates film screenings, luxury wine and collectible cars shows in cities such as Santa Barbara, Miami and Las Vegas. ProElite, under the new ownership held their third event this past January in Hawaii which was headlined by Kendall Grove vs. Ikuhisa Minowa.

But parent company Stratus has found themselves in a big financial mess. Julian Moore from the Pacific Coast Business Times recently reported:

In June, Paul Feller was ousted as longtime CEO and was replaced by board member Jerry Rubenstein. Stratus lost $15.8 million in 2011 on a mere $570,476 in revenue and has struggled to regain its footing after briefly shutting down in 2009. The firm faces lawsuits from a number of investors who claim they were misled and its former landlord who says the company owes $200,000 in back rent and damages related to its downtown Santa Barbara offices.

Amidst all the chaos, Stratus released their quarterly financials ending June 29, 2012 which showed a Net Income loss of $3.375 million dollars. This is compared to a Net Income loss of  $2.479 million from the previous quarter. Former CEO Paul Feller has been given four months to help secure $2 million in new capital or he’ll lose his $20,833 per months paycheck.

The Aug. 17 quarterly report also stated:

As a result of the lack of working capital, Stratus has no events currently scheduled pending receipt of sufficient funds from financings which it is currently pursuing. In the absence of obtaining sufficient funds, Stratus will be unable to schedule or reschedule some or all of its events and implement its business plan.

T. Jay Thompson, who was brought in as ProElite’s Head of Fight Operations recently responded to this tweet when asked about the promotion:

 

Payout Perspective

With no working capital there are no ProElite events planned for the foreseeable future. Stratus is actively pursuing financing however it remains to be seen how successful that venture will be. With the company bleeding money and multiple investor lawsuits pending, the future looks pretty grim.

8 Responses to “Financial Woes Continue for ProElite”

  1. Ron on September 7th, 2012 5:49 AM

    So the fired CEO still makes 250K per annum. IC why they have financial “woes”.

  2. EK Poll on September 7th, 2012 6:33 AM

    Ron: I believe the former CEO’s consultation fees are contingent on securing the funds by the end of Oct.

  3. KWJude on September 7th, 2012 10:19 AM

    They have hired a new CEO with great cred’s and appointed a couple heavy hitters to the board. Look for ProElite to be back this year under new, stronger management…

    1. Jerry Rubinstein NEW CEO …Mr. Rubinstein has been a member of the board of directors of Stratus since March 2011 and has been chairman of the audit committee since that time. He is a member of the board of directors and the chairman of the audit committee of CKE Restaurants, the parent company of Carl’s Jr. Restaurants and Hardee’s Restaurants, which had $1.3 billion in revenues in 2011. He also serves as the non-executive chairman of U.S. Global Investors Inc., a mutual fund advisory company which had $42 million of revenues in 2011 and $2.6 billion of assets under management. Mr. Rubinstein has created and sold numerous companies during his career, including Bel Air Savings and Loan and DMX, a cable and satellite music distribution company. Mr. Rubinstein started and sold XTRA Music Ltd., a satellite and cable music distribution company in Europe. Most recently Mr. Rubinstein consults with, and serves on, 3 early stage development companies. Mr. Rubinstein is both a CPA and attorney.

    2. New Board Member Jack Schneider.Mr. Schneider was a Managing Director for more than 34 years at Allen & Co. LLC, the premier investment house in the media and entertainment sector. He has also been on the Board of the National Mentoring Partnership for 12 years, and he has served as Chairman of the Buoniconti Fund to Cure Paralysis for 25 years.

    3. New board member. Seymour G. Siegel is a principal of the business consulting group of ROTHSTEIN KASS, a 50 year old national firm of CPAs and consultants with approximately 1,000 members and offices in 9 cities in the United States. Previously he was a co-founder of Siegel Rich Inc., a company that provided advisory services to business primarily in mergers and acquisitions, succession planning, strategic alliances and finance sourcing. Prior to that he was a Senior Partner of Weiser LLP, a large regional firm of accountants and consultants with international affiliates. Mr. Siegel is a professional member of the American Institutes of CPAs, the NY State Society of CPAs, The National Association of Corporate Directors and is a Member of the Board of Directors of numerous public and not for profit institutions.

  4. EK Poll on September 8th, 2012 5:15 AM
  5. EK Poll on September 8th, 2012 5:26 AM

    Just to be clear, that’s the ProElite stock that was delisted, not Stratus Media Group Inc.

  6. KWJude on September 10th, 2012 4:54 PM

    I think you will see stratus media merge the two companies soon. Only makes sense to do one set of filings instead of 2.

  7. KWJude on September 10th, 2012 4:55 PM

    Also the new CEO recieved $20,000 for consulting work for Stratus Media in May/June so things are definately happening behind the scenes

  8. John Hobbs on November 8th, 2012 10:39 PM

    Its my understanding that it was Mr. Feller who saved Pro Elite from bankruptcy due to the poor management of Chuck Champion and William Kelly. It was Mr. Feller who hired Mr. Jerry Rubenstein (the new CEO) to join the Board of Directors and appointed him as the new CEO when he stepped down (Read the 8K). Of course Pro Elite has been delisted – Stratus Media owns 95% of Pro Elite – why would a company (Stratus Media who is a public company) keep another company it owns the majority stake in (Pro Elite) as a separately reporting public company??? Stands to reason that they will roll Pro Elite into Stratus Media and reduce the costs of two publicly reporting companies of $1M a year into one public company.

Got something to say?

You must be logged in to post a comment.