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Momentous Entertainment Group Inc (OTCMKTS:MMEG) Making Strategic Moves

Momentous Entertainment Group Inc (OTCMKTS:MMEG) Making Strategic Moves
Written by
Jarrod Wesson
Published on
October 4, 2017
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Our readers remember well that Momentous Entertainment Group Inc. (OTCMKTS:MMEG) was highlighted in August because large amount of shares were changing hands. This fact had drew our attention towards the company and we conducted some research. We noted that the company is serial M&A player that seems to be growing at a high pace through acquisitions. We believe that this was the main reason to explain the increase in volume. Company LogoAfter our article was published, the company released new information that, we believe, is valuable and seems to be affecting the stock price positively. The most significant are the announcement of the new quarterly earnings release, an increase in the total outstanding shares, and the closure of the acquisition of BlackFox, Inc.We will provide all the details in this article, but first of all have a look at the recent share price action: 1 year chart for MMEGRecent DevelopmentsLet's revisit the company's business model for those who are getting to know MMEG here. The company runs a social media network providing services in four different business areas; "social networking, social gaming, ecommerce sold consumer products and services, and OTT (Over-The-Top) streaming media content creation and distribution." The company is said to have millions of online registered users worldwide. Some of the company's posts can be found on Facebook, Twitter, and Linkedin.What's new?On August 22, 2017, the market received the quarterly earnings release for the period ended on June 30, 2017. We were glad to find the new financial accounts, as it finally showed how the recent acquisitions are affecting the assets and liabilities. As of December 31, 2016, the total amount of asset was $86,644, but on June 30, 2017, this figure grew to $2,848,604. The amount of liabilities also increased from $1,683,506 to $43,363,511 in the same period.We could also have a look at the share structure on June 30, 2017. The following information can be interesting for those willing to calculate the book value per share and the cash per share.

  • Preferred stock A: 1,000 shares issued and authorized.
  • Preferred stock B: 50,000,000 shares authorized; 133,060 and 138,000 shares issued and outstanding respectively.
  • Common stock: 5,000,000,000 shares authorized; 1,128,433,976 and 520,921,319 shares issued and outstanding respectively.

Additionally, on August 17, 2017, the company noted that the authorized shares of common stock had increased from 4,950,000,000 shares to 9,950,000,000 shares. This is not a bad news, as it means that the company could increase the shares outstanding, but the total amount of shares outstanding remained the same. Sometimes, companies, such as this one, do such type of changes while preparing for a corporate transaction, wherein issuing shares will be necessary.On top of it, we believe that the most interesting announcement made recently was the closing of BlackFox's acquisition. It was announced on September 28, 2017 and we believe that the market reacted positively to the news. Our readers know very well that the acquisitions bring new assets and increase the company's know-how. The transaction was announced on May 15, 2017. It was executed as a Stock Purchase Agreement with the shareholders of BlackFox, Inc., a New York company, which owns and operates a mobile advertising network. $1,500,000 in cash, debt and newly-issued preferred stock and common stock of MEG were used for the transaction. Finally, in the document, we could read that the deal was finally consummated on August 11, 2017.On September 19, 2017, an update was released, wherein Kurt E. Neubauer, Chairman of the Board and CEO, explained the last developments of the company and the future prospects. In our opinion, the most interesting was the announcement of future debt reductions:

"Momentous Entertainment Group's current debt obligations have been steadily reducing over the past several months through conversion. Also, within the last week management withdrew an S-1 Registration Statement it had initiated with Southridge Partners last year in a further attempt to reduce dilution. Management is hopeful that the Company will locate and secure long term capital funding needs before the close of 2017. In the meantime, corporate debt will continue to be reduced through current channels." Source

Additionally, on September 28, 2017, many new strategic initiatives were noted in a new press release. The company plans to accelerate its new acquired company growth with the following developments: increasing the number of Blackfox advertisers and publishers, expanding the portfolio of Blackfox offered services, offering video ad services to increase revenue opportunities, and procuring "exclusive" private label e-commerce products that will allow MMEG to retain more of the product selling margins.ConclusionCurrently trading with a market cap of $0.4 million, MMEG is an exciting story among small caps. In our opinion, the recent volume increase was created by the release of new strategic initiatives. It seems that some people in the market did not want to wait and see how the company is able to integrate the new acquired business, Blackfox. We cannot blame them, as the press release recently issued indicated many promising growth plans.Additionally, we will need to check the new announcements regarding the debt reduction. They can also be quite positive for the share price. To sum up, check the company's announcements, as this is what's driving the share price up.We will be updating our subscribers as soon as we know more. For the latest updates on MMEG, sign up below!For the full story, check out our complete coverage on MMEG.Image courtesy of TheTelephoneGirl via FlickrDisclosure: We have no position in MMEG and have not been compensated for this article.

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