American Green Inc (ERBB)

[neilbolton]

Licensing Revenue recognition is as stated. It occurs in the period that the CD is manufactured. That means every CD manufactured up until 6/30 is included. The reason that MediaMax files late in August (when many other companies file in late July) is because they must wait on the manufacturing reports to see what revenue is to be included.

The figure of $99.4K in revenue for Year to 6/30 is hugely disappointing and raises some questions. There were about 10 million CDs released to 6/30/05 (20 million, less 10 million in 04). In 2004 there were 10 million CDs released, and approxiamtely 9 million went through MediaMax (1M before the agreement).

So the 10 million CDs for first half 2005 gave us just $99.4K in revenue and 9 million CDs in 2004 gave $106K in revenue. That means MediaMax Tech is getting less per CD than in 2004. What's more, the excuse for the low rate per CD in 2004 was because we were giving away a huge amount of freebies. What's the excuse now?

If we are to accept that MediaMax Tech reports just 40% of revenue (which I find difficult to accept based on what was told to our club on two occasions), then $99.4K for 10M CDs is 1 cent per CD to MediaMax Tech, and only 2.5 cents gross (SunnComm and MediaMax Tech together). 2.5 cents is a long way from the minimum of 4 cents we are told we are getting.

And lets not have any talk of some special licensing revenue flowing exclusively to SunnComm that is not visible or calculable from the MediaMax figures. The marketing agreement is filed with the SEC and is available for all to see. If that marketing agreement does not reflect the true state of affairs, then MediaMax Tech shareholders would have a right to claim they are being misled.