Monster Arts Inc (APPZ)

[Raggedy Man]

Some answers to your questions.

[August 29, 2013]

Expanding marketing firm looks to be upwardly mobile [The Orange County Register]

(Orange County Register (CA) Via Acquire Media NewsEdge) Aug. 29--A San Clemente-based mobile marketing company is pushing for a Nasdaq listing, and its recent $250,000 acquisition of a smaller company is the first of many intended to get the $5 million in assets needed to join the stock exchange.

Monster Arts Inc. and its ambitious new chief executive are working to make the company more profitable and more lucrative for investors. The business specializes in daily deals, rewards programs and brand promotions. Its apps Monster Offers and Monster Daily Deals collect and publish thousands of deals that consumers can organize by category or geography.

The company's purchase this month of Travel America Visitor Guide is CEO Wayne Irving's first major acquisition since he took over last year.

Monster Arts currently is listed on the OTCQB stock exchange for companies with less than $5 million in assets. Other companies on the OTCQB include Six Flags Entertainment Corp. and Jones Soda Co.

"It was a good acquisition," Irving said of Travel America, an online travel-planning tool that helps promote member businesses. "I've been out there looking for opportunities to start bringing revenues and profits into the company so our shareholders will be able to recognize a gain on their stocks.

"We not only gain their business and their revenues ... the profits that come with it, but we gain ... a warm relationship with their prestigious group of clients." Monster Arts said 20 new clients have signed on for Travel America.

"A listing on the Nasdaq would be significant. It would allow the company an avenue to raise funds for expansion," said Daniel Kuo, an economics professor at Orange Coast College in Costa Mesa.

Monster Arts' 52-week stock performance shows the publically traded company peaked at $4.50 per share but is currently trading at about 20 cents per share.

The low stock price might be an incentive for investors to start buying into the company, Kuo said. "You get in before any real appreciation of the stock price can occur." Irving, former CEO of San Clemente mobile technology company Iconosys, hopes a new strategy of expansion and investment will yield more profits. He plans to invest $250,000 to $300,000 in Travel America.

Yingdi Wang, a Cal State Fullerton finance professor, said an acquisition like that can be beneficial, but it's not without risks.

"Acquiring other firms to boost growth is one way that management uses to turn around a company," Wang said. "This sometimes creates synergy between the two entities. However, the benefits of combining two firms do not always offset the costs.

"In addition, when a firm is in trouble, the management has the tendency to engage in riskier activities. The acquisition might end up being a risky move." But Irving said he's confident the company is on the right track.

"It's the beginning stages, and I feel like I'm the one who can take it to the next level, and I'm excited to do that," he said.

Revenue in the past month shot up 25 percent, Irving said, but he said the company should be able to increase revenue by 300 percent.

Irving, who also runs Text Kills, a nonprofit that warns of the dangers of texting and driving and cyber bullying, said the acquisition of Travel America will mean 18 to 20 new customer-service jobs in San Clemente, which he said he plans to fill from among local residents and the Marine community. Irving is a former Marine.

"There's a great labor force right on Camp Pendleton," he said. "I look forward to hiring these Marine wives whose husbands are ... traveling or out training." Travel America Visitor Guide, which will officially become a Monster Arts subsidiary Oct. 1, will operate in a separate office in San Clemente.

Local business leaders said the acquisition is good for the city.

"Monster Arts Inc. benefits our local economy by bringing growth and innovation to the community," said Lynn Wood, chief executive of the Chamber of Commerce. "In addition, they will help stimulate economic growth by providing additional employment opportunities." Irving said one of the reasons he purchased Travel America is that it is profitable, turning out about $300,000 in revenue per year. The company was built by about 25 people, three of whom stayed on to manage it. Those three will remain as consultants, Irving said.

Irving said he wants the company to generate $1 million to $1.5 million in revenue per year. He said the key will be to integrate the companies' services.

WHAT'S NEXT The companies will see upgrades to their websites and mobile applications in coming months, Irving said.

Job listings are expected to be posted on Monster.com and Craigslist. For more information on hiring, email [e-mail].

Irving is eyeing three more companies, one of which could complement Travel America. He wouldn't identify the companies but said the acquisitions could come in the next year.

Contact the writer: [e-mail] ___ (c)2013 The Orange County Register (Santa Ana, Calif.) Visit The Orange County Register (Santa Ana, Calif.) at www.ocregister.com Distributed by MCT Information Services

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