CURRENT STATE OF SAPX DUE DILIGANCE
Originally posted by shish:
Fourth Quarter Releases and Clarity from Zacks Report 2-22-2012
1) Fourth Quarter Fiscal 2012 starts April 1st- June 30th 2012
" Likewise, the Company anticipates the release of 'Drunkboat' and 'Nine Miles Down' in the the Fourth Quarter fiscal 2012.
Similarly, Seven Arts expect its first releases from its new record subsidiary to be in the Fourth Quarter fiscal 2012."
So these above-mentioned Releases are coming in April, May, June time frame.
2) "Upon completion of the acquisition, David Michery will be appointed Chief Executive Officer of the Company's new music division, Seven Arts Music, which will comprise of Big Jake music and other stars including DMX"
Completion should be announced any day now is my understanding. In other words this will be a done deal soon.
3) The Company's strategy is to produce and distribute two to four $2 million to $15 million motion pictures in house per year. This is Consistent with what Peter Said in the recent interview as well on Radio. This is a sound strategy and again points out that the 25 cent per share is ridiculous, under valued and irrational and overly negatively slanted based on Fear of mostly In and out trader mentality gamblers. Nothing wrong with trading , but when they come back IN and street gets to paying attention ( which is always late ) , the sales price will have made a big percentage increase from its current severely low valuation.
4)Recently, Seven Arts has completed production and is anticipating the release for the theatrical showing of Radio Free Albemuth (United States) and Men Don't Lie (United Kingdom).
5) Still, the Company increased net shareholders' equity from $7.958 million as of June 30, 2011 and $14.633 million as of September 30, 2011 to its current level of $15.250 million, with an additional $1.46 million of stock authorized but not yet issued.
6)Additionally, Seven Arts' working capital deficit improved to $7.815 million for the period ended December31, 2011, down sequentially from a working capital deficit of $8.381 million during the first quarter ended September 30, 2011.
7)The Company's balance sheet continued to improve.
As of December 31, 2011, the Company reported $28.729 in assets, up sequentially from $27.291 million in assets during the first quarter fiscal 2012.
8)Additionally, as a result of its continued efforts to reduce indebtedness and increase net shareholder equity, Seven Arts made progress during the quarter in reducing its debt and increasing stockholder equity.
The Company reduced film and production loans as well as reduced other liabilities by approximately $2 million to under $7.5 million.
Production debt decreased from $15.876 million at December 31, 2010 and $10.890 million at June 30, 2011 to $6,025 million at December 31, 2011.
What's more, $700,000 of existing Other Loans were paid or converted over the past twelve months.
9)The increase in weighted shares outstanding was primarily a result of the issuance of unregistered shares to Seven Arts Pictures Plc., the Company's NASDAQ listing predecessor.
10) The increase in net loss was primarily a result of negative gross margins in fiscal 2012 and a $366,488 increase in year over year operating expenses.
Gross margin was negative for the three months ended December 31, 2011, due to the Company amortizing 100% of revenue achieved and writing off the cost of the theatrical release of "The Pool Boys".
In Conclusion , "While second quarter results were weak, Seven Arts reported substantial progress in reducing debt and increasing its stockholder equity."
Everyone can come as they always do to their own conclusions based on recently reported facts by the company and re-iterated by the Most Current Zacks Report.
The Current Valuation of 25-27 cents/share is ridiculously low and the fact remains that the balance sheet is improving and so is the net shareholders equity in spite of increase in weighted shares. The 7 cents loss per share announced in second quarter is more than adequately reflected in the current share price and actually Over done in my opinion . Its almost March and we know the revenues expected in fourth quarter which starts in 5 weeks or so beginning of April.
So take your best common sense Guess on what the share price might be as these revenues hit the SAPX books in the not so distant future. It all seems gloom and doom and the those that have low pain thresholds have bailed , but this is the time to absolutely hold tight if you are already IN and add if you can and if it fits your risk parameters, but definitely be a buyer if you dont own it yet. This is all strictly my opinion and I am a believer that SAPX will make considerable moves from current levels.
Please do your own due diligence and make your decisions based on your risk reward parameters. These decisions to invest/gamble/take a chance...whatever you want to call it is your personal decision and do not be swayed by your emotions and feelings. Either you believe in the revenues that are coming or you dont.
Good luck and God bless you all.
S
