MIAMI, Oct. 1, 2012 /PRNewswire/ -- CMG Holdings Group, Inc. (CMGO) (CMGO.PK) 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 updates regarding the company's 2nd Quarter 2012 financial results, the company's corporate spin-off of AudioEye, Inc., the elimination of the company's senior corporate debt and the corporate update of business operations and the retirement of Chairman and CEO Alan Morell, with Jim Ennis chosen has new Chief Executive Officer.
On September 28, 2012, CMG Holdings Group, Inc. filed its 10-Q regarding their 2nd Quarter June 30, 2012.
Financial Highlight Summary from June 30, 2012 Quarter Report
- Revenues increased to $6,159,910, growth of 31.0%, for 3 months ending June 30, 2012 compared to $4,700,528 for 3 months ending June 30, 2011.
- Revenues increased to $7,143,059, growth of 32.3%, for 6 months year to date ending June 30, 2012 compared to $5,400,369 for 6 months year to date ending June 30, 2011.
- Operating income growth increased to $788,589, growth of 48.2%, for 3 months ending June 30, 2012 compared to $532,136 for 3 months ending June 30, 2011.
- Operating income increased to $176,596, growth of 70.9%, for 6 months year to date ending June 30, 2012 compared to $103,339 for 6 month year to date ending June 30, 2011.
"The first 6 months of 2012 has been a transformative period for CMG Holdings Group, Inc.," said Jim Ennis, Chief Executive Officer. "Through the execution of organic growth initiatives, our revenues for 3 months ending June 30, 2012 increased by $1,459,382 or 31.0% compared to the same reporting period for prior year. Our revenues for 6 months year to date ending June 30, 2012 increased by $1,742,690 or 32.3% compared to the same reporting period for prior year. Our consolidated operating income for 3 months ending June 30, 2012 increased by $256,453 or 48.2% compared to the same reporting period for prior year. Our consolidated operating income increased by $73,257 or 70.9% for 6 months year to date ending June 30, 2012 compared to the same reporting period for prior year."
Corporate spin-off AudioEye, Inc. and elimination of Senior Corporate Debt:
"Our focus throughout this year has been to improve our balance sheet through the reduction of our liabilities and to improve our consolidated working capital position," said Jim Ennis. "On August 17, 2012, CMGO, AudioEye Acquisition Corporation (AEAC) completed our Share Exchange pursuant to our Amended Master Agreement of April 5, 2012 regarding the spinout of AudioEye, Inc. (AudioEye). The completion of our Share Exchange and payoff by AEAC caused the release of our Senior Secured Convertible Extendable Notes and their security interests. As a result, approximately $3.67 million or 48.9% in liabilities will be removed from our consolidated balance sheet, $2.6 million related to the spinoff of AudioEye, Inc. and $1.07 million related to senior debt. This total reduction of liabilities is forecasted to be reflective in our September 30, 2012 and December 31, 2012 balance sheets. We are also continuing to work to reduce other liabilities from our balance sheet over the next several quarters. Also, as a result of completion of the Share Exchange, our assets and working capital position are forecasted to increase, due to the approximate 4.5 million shares of AudioEye that CMGO will own, once their registration process is completed."
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.
- CMGO declared October 26, 2012 as the dividend date, that the dividend will be paid to CMGO shareholders of record as of close of business and will be distributed when AudioEye completes its registration process.
- 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.
- 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.
Corporate Update post the Share Exchange Agreement
"During the remainder of 2012 and moving into 2013, we plan to further expand our digital media offering. The benefits from this expansion strategy should become more evident over the next several quarters," said Jim Ennis. "As our digital media platform gains further traction, we anticipate moving forward with more traditional capital sources and investment partners in order to capitalize on experiential marketing organic growth of XA, The Experiential Agency, Inc. (XA) www.experientialagency.com. We anticipate this will potentially increase XA's growing revenues and market share of proportional digital media budgets from corporate clients that will enhance their expansion and operating profit margins."
"Earlier this year, CMGO announced plans to further align its business around the high growth categories of digital media and marketing solutions. We are moving forward in working with more traditional investment partners and acquisitions plans in order to capitalize on digital media marketing sector growth," said Jim Ennis. "In digital media, our company plans to expand its content solutions, enabling customers to create, distribute and monetize digital content. In digital and mobile marketing, our company intends 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."
"Our digital media platform will assist small businesses to effectively sell their products and services directly to their consumers using mobile and social media," said Jim Ennis. "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, our marketing firm, XA, The Experiential Agency, Inc. (XA), www.experientialagency.com and via our mobile marketing specialists, Audioeye, Inc. www.audioeye.com. Over the past year, we have been in discussions with Connecticut's Department of Economic and Community Development www.decd.org and with New Jersey Business Action Center 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. "We believe our Usave platform will expand and help small businesses prosper, 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 Digital Media http://www.ct.gov/ecd/cwp/view.asp?a=3880&q=454824 and The New York State Office for Motion Picture and Television Development http://www.nylovesfilm.org/index.asp.
Retirement of Chairman and Chief Executive Officer
Alan Morell, Chief Executive Officer and Chairman of the Board of Directors, announced his planned retirement and announced the company's next top executive. Mr. Morell announced his retirement as of September 27, 2012 and Jim Ennis, Chief Operating Officer, has been appointed Chief Executive Officer.
"I am honored to have worked with so many talented people at CMG Holdings Group, Inc. through the years. Jim Ennis, our Chief Operating Officer, has been with the company since CMGO became a public company in 2008," said Alan Morell. "I am honored by the trust that the board and Alan have placed in me, and I look forward to taking my industry experience to move CMGO forward. Alan was the visionary to our company's roadmap," Jim Ennis said.
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 Mr. Jim Ennis at Jennis@CreativeManagementGroup.com or visit the 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. Audio Eye 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. (CMGO.PK) (CMGO.PK) 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.