Replies to post #19580 on Total Sports Media Inc. (fka TSMI)

[BaldInvestor]

TNI, I think that the ongoing concern is there for any startup company. While I could say it doesn't bother me, it does only slightly because I look at this as a startup. Any startup will continue to have 'ongoing concerns'.
It's all just part of being a startup.

As for the debt, I don't see it as an issue. While it would be great to have no debt, seeing the large picture around the products, including the patent, makes me comfortable that STTK is headed in the right direction.

Having been involved, as CTO, in a startup before that was $25M in debt after the first 12 months and knowing what it takes to do product development before income starts coming in, I think that the debt is actually very reasonable.

I look at as positive that their debt is actually this low, knowing that they are trying to upgrade the plane while it's in flight.

If they were $15M in debt I wouldn't have ever invested, that's why I checked them out as thoroughly as I did in the beginning.

Personally, liquidating the company now would be an issue, however, once they have the patent approved, they should be able to sell that for $15-25M easily. Tack on the additional products set to release soon and it easily becomes an acquisition target for some of the other streaming companies that really want the user base, the advertising patent, the radio stations and all the rest of the technology and the sky's the limit.

Just my opinion, but where my head is at after reading the 10Q.
Take care,
BI

[PhantomRecce]

Nervous... too funny. I just read your post after I submitted mine. We both have the same concern.

I've been a VP level officer in a number of IT companies... all the way from running sales in a start up through its successful IPO, to several mid size firms, and even running sales and marketing for a Division within a billion dollar software company. If it's me running the show, I would take a very aggressive short term strategy to further reduce expenses and direct all resources to growing revenues...but, I certainly wouldn't concede or give in.

I've helped turn around IT-based companies in much worse straights than this company. The only issue they have is the dilutive financing they have. In a Machiavellian sense, they shouldn't care. All that matters in the long run is achieving profitability, or building and proving the business model for acquisition by larger company that can sustain the costs.

In fact, for a start-up, this company has a lot going for it. Proven products... a growing listener and content provider customer base... increasing revenues per listening minute... decreasing costs... and sustained revenue growth... for three quarters in a row!

So, I'm just not getting why that section was written as negative as it was. It's almost as if the CEO took a position that would further keep the share price in the mud. That won't help stop the dilution... nor do I see how it will it make the company an attractive acquisition target.

[BaldInvestor]

TNI, and just for the record, this is pretty much what was stated in the 'Going Concern' section from last Q as well. Just different #'s.

I'd like to think that this is simply MH being honest about the future of the company, as would any startup. If they can't get financing, revenues don't increase or just whither away, then yes, they would have to shutter....
But I simply don't see that happening. If they wanted to just bleed the company, then why put the efforts into the partnerships, new products, etc.
AIMO.

BI

[MDuffy]

That is standard legal language. They are required to disclose risk factors, even the remote ones. It's on all my OTC Quarterly reports, even the company that has 4m cash on hand, no debt, and a ridiculously low burn rate. (Though, I will say, til last Q THAT CEO only paid himself 90k.) I haven't seen any of em go bankrupt yet, just something they have to include when in developmental/not profitable stages.