CMG Holdings Group, Inc. Provides Corporate Update
CMGO Provides Corporate Update of Dividend Dates, Elimination of Debt from Balance Sheet and Update on Business Operations
MIAMI, Oct. 24, 2012 /PRNewswire/ -- CMG Holdings Group, Inc. (CMGO) (OTCQB: CMGO) www.cmgholdingsinc.com, a full service marketing communications holding company operating across the sectors of digital media, alternative advertising, social media, experiential marketing and commercial rights, is providing the following corporate update regarding the company's declared dividend dates related to the corporate spin-off of AudioEye, Inc., (AudioEye), the elimination of the company's senior corporate debt and the corporate update of business operations.
Dividend Dates regarding CMG Holdings Group, Inc. and AudioEye, Inc:
On August 21, 2012, the Board of Directors of CMG Holdings Group, Inc. declared October 26, 2012 as the dividend date in accordance with the provisions of their June 22, 2011 Master Agreement, which is 5% of the capital stock of AudioEye, Inc. In accordance with the provisions of the Master Agreement, the dividend which is 5% of AudioEye, Inc., will be paid to the CMGO shareholders of record as of the close of business on October 26, 2012 and when AudioEye completes its registration process and issues the shares to CMG Holdings Group, Inc. AudioEye is currently in the registration process with their most recent registration statement filed on October 1, 2012.
"On August 21, 2012, we declared October 26, 2012 as the dividend date in relation to the provisions of the Master Agreement and the Share Exchange related to AudioEye," said Jim Ennis, CMGO's Chief Executive Officer. "We have been working with our transfer agent, Corporate Stock Transfer, Inc., as well as the representatives of FINRA regarding the regulations related to the confirmation of the pertinent dates pertaining to the dividend. Once we have received the approvals related to the finalized dates, we will provide an additional update for our shareholders. We sincerely apologize if there has been confusion regarding the dates specific to the dividend and we are working to complete this process as soon as possible. We believe the completion of the Share Exchange enhances the value for AudioEye, Inc., the value for our shareholders and our Company."
Additional highlights regarding the Share Exchange and Amended Master Agreement:
- CMGO retains 15% of capital stock of AudioEye subject to transfer restrictions in accordance with provisions of the Master Agreement.
- CMGO will distribute to its shareholders, in the form of a dividend, 5% of capital stock of AudioEye in accordance with provisions of the Master Agreement.
- AudioEye finalized its Consulting Agreement where CMGO will receive commissions not less than 7.5% of revenues from business, clients, sources procured by CMGO directed to AudioEye and 10% of net revenues obtained from a third party described in the agreement as fully described in the Master Agreement.
- AudioEye finalized its Royalty Agreement that pays CMGO 10% of cash received from income earned, settlements or judgments directly resulting from the AudioEye patent enforcement and licensing strategy as fully described in the Master Agreement.
Elimination of Senior Corporate Debt and Other Liabilities:
"Our focus throughout this year has been to increase our consolidated working capital position by improving our balance sheet through the reduction of our liabilities," said Jim Ennis. The completion of the previously announced Share Exchange and release of our Senior Secured Convertible Extendable Notes are forecasted to reduce $3.675 million in liabilities from our consolidated balance sheet, $2.6 million related to AudioEye and $1.075 million related to principal of senior debt. Additionally, we are working to reduce approximately $1.3 million in liabilities from our balance sheet over the next several quarters as well. As a result, approximately $5.0 million, or 66.7%, in liabilities are forecasted to be eliminated from our consolidated balance sheet in our September 30, 2012, December 31, 2012 and March 31, 2013 filings. In addition to reducing our liabilities, our assets are forecasted to increase due to the approximate 4.5 million shares of AudioEye that CMGO will own, once their registration process is completed."
Financial Highlight Summary from June 30, 2012 10-Q:
- Revenues increased to $6.16 Million, growth of 31.0%, for 3 months ending June 30, 2012 compared to $4.70 Million for same period over prior year.
- Revenues increased to $7.14 Million, growth of 32.3%, for 6 months ending June 30, 2012 compared to $5.40 Million for same period over prior year.
- Operating income increased to $788,589, growth of 48.2%, for 3 months ending June 30, 2012 compared to $532,136 for same period over prior year.
- Operating income increased to $176,596, growth of 70.9%, for 6 months ending June 30, 2012 compared to $103,339 for same period over prior year.
Corporate Update on Digital Media Expansion and Organic Operations:
"During the remainder of this year and moving into 2013, we plan to expand our digital media offering and the benefits should become evident over the next several quarters," said Jim Ennis. "In connection with the forecasted improvement of our balance sheet, the organic revenue growth of XA, The Experiential Agency, Inc. (XA) www.experientialagency.com and the traction of our digital media expansion, we have held discussions with more traditional investment partners regarding securing additional sources of capital. We are working to secure capital to take advantage on organic revenue growth of XA and anticipate securing this capital will potentially increase XA's growing revenues and market share of marketing and media budgets from corporate clients that will enhance their overall expansion and operating profit margins."
"CMGO has previously announced plans to further align its business around the high growth sectors of digital media and marketing. We are moving forward in partnering with more traditional investment partners regarding our acquisition plans in order to capitalize on growth in the digital media marketing sectors," said Jim Ennis. "Our digital media platform will assist small businesses to effectively sell their products and services directly to their consumers using mobile and social media. It will also provide the social network to connect directly from small businesses across Connecticut, New Jersey and New York using social media expertise via our public relations specialists, XA Social, www.xasocial.com, XA, www.experientialagency.com and via our mobile marketing partner, AudioEye www.audioeye.com.
"In digital and mobile marketing, our company intends to increase its presence in the multi-billion-dollar media sector which is poised to grow at an incredible pace over the next decade as technological advances make digital media practical and affordable platforms for small businesses. CMGO previously announced their digital media expansion with their UsaveCT and UsaveNJ platforms, providing digital savings solutions connecting clients and customers with small businesses through interactive media videos. Operating across Connecticut, New Jersey, and New York to offer small businesses digital solutions to increase their customer interaction through interactive media videos to build and strengthen relationships with their clients. Customers, after watching the interactive video commercials within Usave digital network site, will receive digital, mobile or printable coupon offers for immediate savings and incentives from small businesses. Over the past year, we have held discussions with Connecticut's Department of Economic and Community Development (DECD) www.decd.org and New Jersey Business Action Center (BAC) www.state.nj.us/njbusiness/bac/index.shtml to be a contributing factor as part of their statewide initiative to create jobs and economic growth for small businesses in Connecticut and New Jersey," said Jim Ennis.
"Now that our Share Exchange is complete and the steps are in place to improve the financial position of our balance sheet, we are looking forward to advance the next stages of our growth strategy. We believe our digital media platforms will help small businesses, improve job creation and provide significant savings for residents across Connecticut, New Jersey and New York. This will allow us to hire sales and digital media professionals potentially capitalizing on the digital media tax credit platforms from Connecticut's Department of Economic and Community Development's Office of Film, Television and The New York State Office for Motion Picture and Television Development."
Companies or individuals that are interested in learning more about CMG Holdings Group, Inc., our subsidiaries or CMGO's investment in AudioEye, Inc., should please contact Jim Ennis at Jennis@CreativeManagementGroup.com or visit following websites: www.cmgholdingsinc.com, www.experientialagency.com, www.xasocial.com, www.audioeye.com.
About CMG Holdings Group, Inc. (CMGO):
CMG Holdings Group, Inc. is a full service marketing and communications holding company. CMGO's mission is to build a national platform of exceptional companies that deliver solutions in the areas of alternative advertising, social media marketing services, event management and commercial rights. CMGO is seeking to expand its national presence via its acquired companies, capitalizing on their intellectual properties, patents, sales and marketing, new product development and continued operations via economic recovery. CMGO owns and operates wholly-owned subsidiaries, XA, The Experiential Agency, Inc. and has a minority investment in Audio Eye, Inc.
For more information, please visit: www.cmgholdingsinc.com
About XA, The Experiential Agency, Inc. (XA):
XA, The Experiential Agency, Inc. is a wholly-owned subsidiary of CMG Holdings Group, Inc. and has offices in Chicago and New York from which it provides corporations and highly visible brands with comprehensive event marketing, design, public relations and production services. The XA brand has a 20 year history and its team has been the creative force behind prestigious, national projects for such prior and current clients including USA Networks, The Bravo Channel, NBC Universal, Bloomberg, Guinness, HBO, Disney, Microsoft, Sony, Harrah's Entertainment, United Nations, Conde Nast, Vanity Fair, Vimeo, Michael Kors, Puma, and Ritz Carlton.
For more information please visit: www.experientialagency.com
About XA Social:
XA Social is part of the XA consolidated platform and excels in social media strategy; from a social media 101 seminar, to advising and monitoring, overall management and ROI. XA Social believes social media is not a fad, but rather an extension of good public relations that is here to stay. XA Social creates lasting connections between consumers and brands in order to engage in two way communication. XA Social helps clients build their brands through innovative and authentic social media tactics and aids in creating environments of conversation and engaging relevant consumers with brands through personal interactions.
For more information please visit: www.xasocial.com
About CMGO's Investment in AudioEye, Inc. (AudioEye):
AudioEye, Inc., founded in 2003, is a wholly-owned subsidiary of CMG Holdings Group, Inc. with offices in Tucson and Chicago. AudioEye has developed patented, Internet content publication and distribution software enabling conversion of any media into accessible formats and allowing for real time distribution to end users on any Internet connected device. AudioEye is focused on creating better and more comprehensive access to Internet, print, broadcast and other media to all people regardless of their network connection, device, location, or any disabilities or disadvantages an individual may have. Audio Eye solutions include comprehensive E-Learning and E-Commerce systems as well as a variety of Internet publishing products and services that enable customers to create and deliver accessible, highly scalable web-based applications.
For more information please visit: www.audioeye.com
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may contain forward-looking statements which include, but are not limited to, statements concerning expectations as to our revenues, expenses, and net income, our growth strategies and plans, the status of evolving technologies and their growth potential, the adoption of future industry standards, expectations as to financing and liquidity requirements and arrangements, need for additional capital, and other matters that are not historical facts. These forward-looking statements are based on our current expectations, estimates, and projections about our industry, management's beliefs, and certain assumptions made by it. Words such as "forecasted", "forecasts", "anticipates", "appears", "expects", "intends", "plans", "believes, "seeks", "estimates", "may", "will" and variations of these words or similar expressions are intended to identify forward-looking statements. In particular, when used in the preceding discussions, similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from those results expressed in any forward-looking statements, as a result of various factors. Readers are cautioned not to place undue reliance on forward-looking statements, which are based only upon information available as of the date of this report. We undertake no obligation to revise or update publicly revise any forward-looking statements for any reason Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward-looking statements that involve a number of risks and uncertainties. It is possible that the assumptions made by management are not necessarily the most likely and may not materialize. In addition, other important factors that could cause actual results to differ materially include the following: business conditions and the amount of growth in the company's industry and general economy; competitive factors; ability to attract and retain personnel; the price of the Company's stock; and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-K; its quarterly reports on Forms 10-Q; and any reports on Form 8-K. CMG Holdings Group, Inc. (OTCQB: CMGO) takes no obligation to update or correct forward-looking statements and also takes no obligation to update or correct information prepared by third parties that is not paid for by the Company.
CMG Holdings Group Inc.
5601 Biscayne Boulevard
Miami, FL 33137
SOURCE CMG Holdings Group, Inc.