Less than two weeks after laying off a third of its 60-person team, Legible has announced two more executive departures.
In a corporate update shared on April 13, the Vancouver-based ebook company said that Chief Publishing Officer (CPO) Cameron Drew and CRO Wai-Ming Yu have both left the company. Legible is currently restructuring in order to preserve cash, and is also looking to raise financing after facing some difficulties.
“In these turbulent times, we needed to be a smaller company with a focused team, which has led to some difficult but necessary decisions.”
While Legible did not clearly state whether Drew and Yu resigned or were laid off, the company was clear that it is currently in the process of “rebuilding” its executive team to reflect that it remains “a small-cap startup.”
Over the past few weeks, Legible has laid off at least 23 employees, citing plans to streamline its operations. In addition to Drew and Yu, the company lost CTO Adam Zouak, CFO Helina Patience, and Head of Accessibility Laura Brady. Legible made the cuts to reduce the company’s annual burn rate by over $3.3 million, and enable it to complete “a follow-on private placement financing.”
As part of that aim to raise capital, Legible has retained Hybrid Financial, a Toronto and Montréal-based sales and distribution company, to provide marketing services to connect Legible with potential investors.
“While this has been challenging for everyone at Legible, the changes were strategically made for Legible’s long-term success,” said Legible founder and CEO Kaleeg Hainsworth in a shareholder update. “In these turbulent times, we needed to be a smaller company with a focused team, which has led to some difficult but necessary decisions.”
This restructuring comes about four months after Legible made its Canadian Securities Exchange (CSE) debut, during what has become a difficult and unpredictable capital-raising environment. Legible’s layoffs came shortly after fellow publicly traded, Vancouver-based firm Thinkific disclosed plans to lay off 100 people—one-fifth of its team—in an effort to cut costs.
As part of this restructuring, Hainsworth said Legible has consolidated its product team to “a strategic set of senior developers,” brought its publishing team under former CPO Angela Doll—who currently serves as Chief Publishing Operations Officer according to LinkedIn—and folded its curation, content creation, and acquisition roles into one team.
RELATED: In effort to cut costs, CSE-listed Legible lays off over a third of its employees
Legible, which trades under the symbol ‘READ,’ opened on the CSE on December 1 at a price of $1.26 CAD per share, shooting as high as $1.40 before dropping to a low of $0.90 the following day. Since then, the company’s share price has fallen precipitously. At time of publication, shares in Legible are trading at $0.14 apiece.
During this time, valuations of publicly-traded tech firms have dropped significantly amid rising inflation, interest rates, and Russia-Ukraine-related tensions, which has made it more difficult for unprofitable, high-growth firms to access financing.
Hainsworth previously noted to BetaKit that Legible’s lower share price impacts its ability to raise capital, calling the present environment “challenging times for everyone.”
In February, Legible announced plans to raise gross proceeds of up to $3 million CAD through a non-brokered private placement financing of 7.5 million units. At the time, the company priced each unit—which includes one common share and one common share purchase warrant—at $0.40 apiece. The status of these efforts are currently unclear, though retaining Hybrid Financial points to a push to attract more investors.
Speaking with BetaKit in December, Hainsworth said Legible had raised a total of just over $11 million CAD in private equity funding from a group of undisclosed individual investors and small funds.
Despite these moves and this environment, Hainsworth expressed confidence in Legible’s outlook. “Legible’s management team and board of directors are excited and confident that Legible, in its new streamlined form, will deliver significant revenues in the coming months,” said the CEO.
Feature image courtesy of Legible