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IMMG Impart Media Group Releases Operational Update on Progress in Recurring Revenue Model
PR Newswire - October 16, 2006 8:00 AM (EDT)

Reduction in Overhead Shortens Anticipated Time To Positive Cash Flow As Impart IQ(TM) Contracts Ramp Up

SEATTLE, Oct 16, 2006 /PRNewswire-FirstCall via COMTEX/ -- Impart Media Group, Inc. (OTCBB: IMMG), a unique full service provider of hardware, content, and advertising for digital media networks announced today an operational update to its shareholders on organizational changes, refocus of the company, and recent momentum in building revenue. According to Joe F. Martinez, the company's Chairman, CEO and Principal Financial Officer, "there are so many exciting events taking place in our company that I felt that it was very important for me to provide our shareholders with an operational update before the end of Q-4." Mr. Martinez went on to say, "since I assumed full responsibility, earlier this year, for the direction of the public company, we had a lot of challenges and I felt there was a need to refocus the company and streamline our business, so that we could more effectively chart our course for what we believe is going to be a very successful 2007. In an effort to communicate these internal, business strategic developments to our shareholders and investors, we felt it was better to address these important changes via a press release, rather than the traditional conference call or annual letter to the shareholders." Martinez elaborated, "I am very bullish on our business and thank our shareholders and investors for their patience during the last few months that we have been restructuring our business."

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In an effort to respond to the changing environment, the company has recently reduced operating costs and overhead by approximately $100,000 per month. This significant adjustment in operating costs and realigning of corporate overhead -- along with new contracts -- will get the company to a positive cash flow position sooner than previously forecasted. In concert with this corporate refocus, the Mobile Media business unit, inherited in the acquisition of Limelight Media, has been permanently closed, since it was not in line with the company's digital and electronic focus. Additionally, the business that is defined as the capital intensive revenue model, where the equipment supplier provides all of the capital expenditures (and assumed risks) for the placement of equipment in venues, such as retail stores, malls, public spaces, and airports and subsequently sells advertising -- has been frozen due to the tremendous upfront cash requirement and uncertain return offered by this revenue model. The company has decided to focus on the placement of its own proprietary equipment offered by the Impart IQ(TM) digital signage and interactive media products. The capital expenditure or CapEX revenue model will be revisited, once the company achieves profitability and raises additional capital to strengthen its balance sheet so that it can secure venues that are demographically desirable and insure optimal, out-of- home audience reach resulting in high margin advertising dollars. Martinez elaborated, "we believe in the advertising revenue model and feel that the future of the specific digital delivery of relevant content and advertising to a targeted demographic is probably the most target rich environment for the future of advertisement. This has been demonstrated, with far-reaching implications, by companies such as Google. However, the space in the Out-of- Home advertising sector is still in a state of flux -- with the CPM (Cost per thousand) metric derived for billboard advertising -- and the Page View for the Internet -- both having problems truly measuring their effectiveness. Brands and advertisers want additional metrics that validate their expenditures, as they migrate from traditional advertising media, such as network television -- whose advertising dollars continue to degrade, as TV continues to lose its audience from the likes of TiVo, video gaming, Internet, OnDemand, and DVD's."

In addition -- after a thorough review by the company's auditors -- the revenue recognition issue of the company's acquisition of E&M Advertising necessitated that E&M's revenue be recognized as net versus gross. Despite the fact that the E&M revenue was historically recorded in this manner, for the past twenty (20) plus years under the guidance of the company's accountants, the company will continue to use the more conservative number of net revenue for recognition, to insure complete compliance with GAAP accounting principles. This treatment of the revenue, however, will have no effect on the recognition of net profit.

Impart Media Advertising (d/b/a E&M Advertising) is an agency specializing in direct response advertising in electronic media, television, radio, and online and has been in business more than 25 years dealing both directly with client and agency partners. Current clients include AARP, Turtle Wax, CarStar, Community Health Plan, Premera Blue Cross of WA, OR and AZ, Telebrands, SMC Specialty Merchandising Corp., Life Alert, Lava Life, Bargain Network, My Fico (Fair Isaac parent company), among others. Impart Media Advertising has 29 employees and operates out of 3 offices in New York, Los Angeles and Las Vegas. As the full integration of both companies progresses, Impart anticipates crossover of mutual clients and the revenue model to be more services driven, therefore having more of its revenue from new contracts recognized as gross versus net.

Clients such as Dole, AT&T among others are large companies that have gone through significant pilot testing of the company's Impart IQ(TM) products. Projects of this magnitude deserve the testing and research needed to deploy a successful network. Other Impart clients have had deployments delayed due to budgets, contract issues, internal jurisdiction and/or ownership of the project. For example, does IT or marketing handle the deployment? ... or is it a combination of both?? Formal guidelines and processes have not been formulated in most Fortune 1000 companies, who represent Impart's core customer base. However, the acceptance of the Impart IQ(TM) product line -- with an "iPod type" ease of use -- should streamline the decision process, as the industry matures and the mass deployment cycle shortens. This is already evident with a series of important and very major client acquisitions that the company will be announcing by year-end, when marketing departments approve project releases to the public-at-large.

Impart has already over twenty-five (25) Impart IQ Box(TM) or Impart IQ Interactive(TM) clients including: AT&T, Microsoft, Nordstrom, RediClinic, Clem Cards, MediPlay, EyePlay, Retail Entertainment, Definitive Solutions, Dole, and others. The company will have delivered, by November 1st, more than 500 Impart IQ(TM) systems to clients. Impart has experienced significant market interest and industry acceptance, since the platform introduction of their innovative digital signage media server/player at the Digital Retailing Expo (DRE) in May 2006.

Significantly, the Impart IQ Box(TM) represented the system platform launch -- with many supportive and complementary products and services that Impart is announcing this year and into next year. At the just completed, Digital Signage Investors Conference in New York City, where the company's CEO presented, there was further validation by industry wide consultants that the interactive, consumer-friendly high touch approach that the Impart IQ(TM) product line delivers is the future for the delivery of relevant content and targeted advertising to consumers.

Impart unveiled in August, the Impart IQ Live(TM) -- for live TV or security feeds -- generating immediate interest in the hospitality industry, including hotels, convention centers, and restaurants ... and more recently, for interactive media or kiosk applications, Impart introduced its robust and scalable, Impart IQ Interactive(TM) system.

Completing the innovative and expanded platform capabilities, the company will also be releasing Impart IQ Streams(TM) (with simple, web portal accessible, environment compatible infotainment content) and Impart IQ Ads(TM) (with easy, web portal selectable and venue relevant, ad inserts) in 4th quarter 2006 and 1st quarter 2007, respectively.

The company continues to expand its channel and content partners ("Impartner") network. With the creation of the comprehensive Impart IQ(TM) product family, Impart is again marketing to channel partners and distributors such as NJ based, Vira Manufacturing -- who has integrated the Impart IQ(TM) solution into their in-store fixture design solutions, Harbor Industries, Design Forum, Advanced Method, and others. Impart sees this "Impartner" channel network approach as the most efficient and timely way to impact the marketplace and accelerate Impart IQ(TM) acceptance, both domestically and internationally.

The company expects to report its Third Quarter financial results by November 15th.

About Impart Media Group, Inc.

Impart Media Group, Inc., headquartered in Seattle, Washington, is a rapidly expanding digital signage leader in the emerging out-of-home media sector. The company is growing through a consolidation strategy that includes acquiring the industry's best and brightest talent and developing the most advanced solutions to create a broad, integrated one-stop communications media company focused on digital signage and networked advertising offerings for leading brands and environments in industries such as retail, grocery, banking, restaurants, hospitality, government, airports, and public transit spaces, among others. The company's digital media solutions enable the simultaneous delivery of video, stills, text, web, and animation content to a variety of remote audiences in real time, allowing for immediate customization of messages through a centralized network operations center or secure web portals. For more information please visit: www.impartmedia.com or call 800-544-3343.