CMG Holdings Group, Inc. Issues Shareholder Update
Company resolves outstanding litigation favorably, eliminates substantial debt, and guides for profitable growth at its XA advertising unit.
CHICAGO & NEW YORK - March 5, 2019 - PRLog -- CMG Holdings Group, Inc. issued a shareholder update today from the office of Chairman and CEO Glenn Laken.
In January 2019, CMG settled its outstanding case with Hudson Gray and other defendants. I am taking this opportunity to let you know what has been going on since the settlement. Please be aware that because an NDA related to the settlement remains in effect, the information I can currently share with you is limited in scope.
As you know, the CMG case against the Hudson defendants was aggressively litigated over the past four years. The case, which was driven primarily by recovery and research related to over six terabytes of stolen corporate information, demanded thousands of hours of e-discovery work, performed almost exclusively by my wife. There were many times over the years, as the case slowly progressed, when she and I wondered what we had gotten ourselves into.
In addition to the thousands of hours invested, we financed the litigation personally on behalf of CMG and its shareholders. Without our personal commitment of time and money, the CMG case against the Hudson defendants could never have gone forward. To be clear, this was not a passive investment.
The CMG case was managed and dealt with on a day-to-day, week-to-week basis as it slowly worked its way through Federal Court. During this time, I strategically chose to take the company dark so as to not have to make disclosures that could or might have worked against us. Now that the matter against Hudson Gray has been settled, CMG is preparing to report again with a target date of April 1, 2019. When reporting commences, the particulars of the settlement with the Hudson defendants will be disclosed as appropriate.
In the interim, there are some items I can discuss. The Burkhardt case, also under NDA restriction, settled prior to the CMG settlement at a cost very favorable to CMG's final result. This settlement, like the CMG settlement, can be disclosed once CMG regains reporting status.
Additionally, XA, the CMG subsidiary that had been stripped of all its clients, digital information and ongoing business in 2014 - and the basis of the CMG case against Hudson Gray - has been making a remarkable comeback. In 2017, XA grossed approximately $750,000 netting approximately $50,000. In 2018, XA grossed roughly $1,300,000 netting approximately $170,000. This year, XA is projecting $2,250,000 in gross revenues with a net profit of approximately $250,000 - $275,000. We will continue to diligently build XA back into an experiential powerhouse. A new XA website will be up and running in the next few weeks. XA has also begun concentrating on building an increasingly significant social media footprint. None of this would have been possible without a herculean effort by my daughter Alexis and her creative partner Armon Lewis, who have worked tirelessly and against all the odds to turn XA into a thriving business again.
The last six weeks have been devoted to cleaning up CMG's balance sheet. I have settled several lingering debts to the company's advantage and am waiting on a few more responses from creditors. Once the old debts have been cleared, I intend to turn my focus back to where it had been back in 2014, before the theft of XA's assets diverted my attention away from my initial mandate - building CMG into a successful holding company with profitable investments. I intend to make XA the cornerstone of that effort.
Finally, I would like to extend my heartfelt thanks to all the CMG investors who never gave up on the belief that I would prevail in my efforts to save the company and shareholder investment, despite withering attacks from uninformed and unidentified voices. I appreciate your understanding and hope that future profits will make up for an unexpectedly rocky beginning.
About CMG Holdings Group, Inc.
CMG Holdings Group, Inc., a marketing communications company, engages in the operation of organizations in the alternative advertising, digital media, experiential and interactive marketing, and entertainment sectors. The Company is involved in the production and promotion, event design, sponsorship evaluation, negotiation and activation, talent buying, show production, stage and set design, and data analysis and management activities. It also offers branding and design services, such as graphic, industrial and package designs across traditional and new media, public relations, social media, media development and relations, and interactive marketing platforms to provide its clients with customary private digital media networks to design and develop individual broadcasting digital media channels to sell, promote, and enhance their digital media video content through mobile, online, and social mediums. The Company serves clients across the marketing communication industry. CMG Holdings Group, Inc. is based in Chicago, Illinois.
Safe Harbor Statement
The above discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout any discussion, CMG will attempt to present important factors relating to our business that may affect our predictions.