NanoTech Entertainment Inc (NTEK)

[B402]

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The Scoop on NTEK A/S Increase:

It is fairly simple. The TVOD business is typically a revenue share arrangement. Most larger TVOD providers (Amazon, Comcast, TWC, ATT and other established players that actually generate revenue) follow the basic tenants of the "Apple" model, which is a 70%/30% split of TVOD revs. TVOD also represents the "first window" for television post theatrical runs, and/or first window outside of broadcast/cable rights-holders/creators. With an unknown like Ultraflix, 99% of content holders (who hold any content that would drive a platform or attract viewers) will demand upfront or monthly payments, otherwise known as MG (minimums against the aforementioned split). Those rights holders know these numbers from the years of selling to those listed previously.

Ultraflix, quite simply, did deals they cannot now fulfill financially. The IMAX large format conversions, the native UHD studio films of note, what do you think this kind of content costs in terms of MG for a platform like Ultraflix? Trust me, not small numbers for a little engine that couldn't like NTEK. For an unknown or emerging platform with their act together, a manageable amount under the right circumstances, but an unsustainable amount for Ultraflix considering how the platform has been horribly mismanaged.

Where is NTEK now? Delinquent on payments to many of those initial content holders they've done deals with - and although they can make excuses with the smaller content holders and the Bollywood types looking for any way into the US market, the bigger players will send a slew of lawyers pounding down the door. Which they're now doing.

P.S. - there will never be future deals done with the likes of Paramount - they've been burned. Nor IMAX, Disney, FOX or Warner Bros. And forget Sony in terms of sharing their films on Ultraflix - ain't ever gonna happen. Word is out around town, and although NTEK would love to offer worthless shares in lieu of hard cash, everyone knows what's up. So they might pony up one more flick of note through this latest share increase, but it's only to pump and dump. As no studio will do a deal at this point unless the cash is paid up front. They all know the MG will never be met, they'll never see any cash beyond the MG in terms of revenues. So they'll only do a deal if they get their typical first run window revenues up front. Period.

So once again - the Cliffsnotes version. NTEK will raise the A/S as long as necessary to keep the key content rights holders off their backs, stall on paying bills where they can, and allow those with non-restricted shares to dump until it's done.