LOS ANGELES, CA--(Marketwired - Mar 8, 2017) - Innovativ Media Group, Inc. (OTC PINK: INMG) ("Company"), a multi-media content producer and distributor, today announced record results for its fiscal year ended December 31, 2016. Company revenues increased over 88% from $98,792 to $185,995 and EBITDA increased by over 2200% from $1,880 to $43,552, the highest in Company history. The Company has posted 6 Quarters of successive earnings since acquiring the Innovativ Media entertainment assets in mid-2015.
This is why I jumped out of this stock. PR's like this are smoke and mirrors to hide problems and decreases in revenue. Notice that Net income is not even mentioned. It's in the 10-K. The total Annual Net Income after all revenue and expenses went from a loss of $48,120 for 2015 to a loss of $56,376 for 2016. Why, with a boasted revenue of approximately $100,000 more than 2015, did the Net Loss increase? Because every year a percentage of the $2.5 million in film assets in INMG's library that were acquired have to be amortized to cover the initial purchase (just like purchasing a house and amortizing the cost through a loan.) And here it is in the 10-K:
"NOTE 3: UNAMORTIZED FILM COSTS AND SPORTS BUSINESSES WRITE DOWN (CON’T)
The Company is amortizing its film content assets at 4% annually for the first 5 years and then 16% annually for the next
5 years. For the Year ended December 31, 2016, the Company amortized 4% for a total of $100,000."
The posted revenue is due to four quarters of income from film assets at an average of about $46,498 per quarter for each quarter of 2016 ($185,995/4). For the two quarters of 2015 that INMG had income from those same assets the average income per quarter was approximately $49,396 per quarter($98,792/2). That's right. Each quarter those film assets bring in less and less money.
The killer is in that NOTE 3 too. Notice that the cost will increase from an amortization interest rate of 4% per year to a whopping 16% per year for the second five years.
It's been a year since the release of the first episode of Mountains of Madness. What is there to show for it? $0.00 in Net income according to the 10-K.
We all listened to Tom Coleman make his speaches. He was very convincing. But it looks like this is another OTC that is only designed to profit the CEO with nothing but loss for the shareholders. The claimed purpose of the reverse split was to make a share structure and PPS more favorable to larger investors. Well? All we hear are crickets chirping in that arena. Basically he's using shareholder's hard earned investment dollars to acquire a film media library that appears on the outside to be solid company (and therefor shareholder) assets, but are in reality his bank account that are pilfered every month in the name of "business expenses." Here's just one example from the 10-K:
Office and Internet expenses: $12,011.00
But notice the statement in the 10-K:
NOTE 7 – COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer has provided office facilities and services
without charge. There is no obligation for this arrangement to continue. Such costs are immaterial to the financial
statements and accordingly are not reflected herein.
This is all my personal opinion of course. But we've had a year and a half to watch Tom and what is there to show for it? 10-K's that are plain as day if you take the time to read and analyze them.
Albert Einstein is reported to have stated the definition of Insanity: doing the same thing over and over again and expecting different results.
Sad, but true.
