Water Boarding

[DiamondFire]

No Kazaa in 2012: ATRN Runs Faster...


DiamondFire  

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Saturday, February 04, 2012 12:18:22 AM
Re: None

Post # of 68256 
NO KAZAA IN 2012 = ATRN Runs Faster...


I was just reading the 'Risk Factor' segment in last year's 2010 10K. Reading this report is more like realizing that a disease has been contacted by Atrinsic in 2009, it's growing - and it's name is KAZAA! Here is the 2010 10K:

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7849602

(Pages 10, 11 and 12)


"For periods subsequent to December 31, 2010, we expect losses to continue if we maintain expenditures to develop the Kazaa service, acquire subscribers for the Kazaa digital music service, and are not able to reduce other operating expenses and overhead sufficiently to a level in line with our level of revenues....."

and...:

"(ii) ...scale our Kazaa subscriber base to a level where the monthly revenue generated from our subscriber base exceeds subscriber acquisition costs, net of expenses required to operate Kazaa...(v) improve utilization of the Kazaa digital music service and improve LTVs of subscribers to that service (vi) acquire profitable subscribers to the Kazaa digital music service at cost effective rates..."

and...:

"In the near term, we are focused on: (i) raising debt or equity capital to fund our immediate cash needs and to finance our longer term growth to further develop the Kazaa business and grow our subscriber base..."

and:

"If our purchase of the Kazaa assets does not close, the price of our common stock could decline and our future business and operations could be harmed.

The Company's and Brilliant Digital’s obligations to complete the purchase and sale of the Kazaa assets is subject to conditions, many of which are beyond the control of the parties. If the transaction is not completed for any reason.
 
·
The price of our common stock may decline;
 
·
We will incur costs related to the transaction, such as financial advisory, legal, accounting, proxy solicitation and printing fees, even if the transaction is not completed;
 
·
We will not be able to realize the expected benefits of the acquisition which are a significant component of our growth strategy;
 
·
We may not be able to operate as effectively under the existing Marketing Services Agreement and Master Services Agreement, which agreements are to remain in place if the transaction does not close,

All of which may harm our business and operations."

and...:

"The working capital requirements for companies in the digital music industry is significant.

The digital music industry is highly competitive and as a result of the industry’s characteristics, subjects market participants to significant working capital requirements, as is evidenced by the numerous companies in the industry that have experienced significant losses.  If we are to attract and retain talented employees, acquire subscribers and enhance and improve the Kazaa digital music service, which we will need to do if we are to be successful, we will have significant capital requirements.  There is no guarantee additional capital will be available on favorable terms or at all."

and...lol!:

"We will require additional capital to operate or expand our business. In addition, some of our current or future strategic initiatives, including continued growth of the Kazaa line of business, will require substantial additional capital resources before they begin to generate revenue. Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. In addition, volatility in the credit markets may have an adverse effect on our ability to obtain debt or equity financing. If we do not have funds available to enhance our business, maintain the competitiveness of our technology and pursue business opportunities, we may not be able to service our existing subscribers and customers, or acquire new subscribers or customers , which could have an adverse effect on our business, operating results and financial condition."

and...:

"We face risks in implementing our restructuring plan.

In connection with our announcement to purchase the assets of the Kazaa digital music service, we are undertaking a restructuring of our existing operations."

and...:

"The anticipated benefits of the acquisition of the Kazaa business may not be realized fully or at all or may take longer to realize than expected.

The integration of Atrinsic and the business of Kazaa face challenges as a result of the differing geographical locations of the two businesses. In the event the transactions contemplated by the asset purchase agreement close, the combined company will be required to devote significant management attention and resources to integrating the Kazaa business and the assets into our operations. Delays in this process could adversely affect our business, financial results, financial condition and stock price."



AND...: HOW MUCH HAS ATRINSIC LOST ON KAZAA SINCE TAKING IT OVER?: 

The money that Atrinsic was LOSING each quarter from Kazaa was about $2 million according to their last 10Q of Q3 2011:

"Since inception on July 1, 2009, and through September 30, 2011, the Company has incurred $17.4 million of cumulative net losses, net of recouped funds in order to support the development of the Kazaa brand."

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8241320-1137-200955&type=sect&dcn=0001144204-11-064110


THAT'S ABOUT $2 MILLION IN LOSSES A QUARTER! Couple these LOSSES with all the money that they put into Kazaa - and how much CASH they used to fund it.

SO GOOD RIDDANCE TO KAZAA! And this is clearly why buying ATRN right now is so compelling to me: 

1). Atrinsic in 2012 will not have to throw good money at a dying and money-draining Kazaa business anymore - and the last of their cash reserves. 

2). In 2012 Atrinsic will no longer have $2 million in losses each Quarter from Kazaa going foward. 

3). In 2012, IF Atrinsic can pay off BD's debt in full, of which they are already have paid about 40% in only ONE MONTH - - OF THE SIX MONTHS THEY HAVE TO PAY OFF BD, the 'Kazaa Anchor' will be finally released from their Caboose, which in turn stengthens their GROWING business they have left as seen in last years Q3 when their Transactional and non-Kazaa business doulbled to $9.8 million for the quarter.

All this = Cho-CHOO!

....and you know what else is interesting: their new Spyder search project was made known and the Countdown begun almost to the day last December when they officially severed their deal with BD and got rid of Kazaa....hmmmm lol...talk about 'A Statement'!