iTeknik Holding Corporation Posts FY17 Annual Repo
Post# of 301275
West Palm Beach, FL, Oct. 16, 2017 (GLOBE NEWSWIRE) -- iTeknik Holding Corporation (OTC PINK:ITKH) posted its Annual Report for FY 30, 2017. Revenues for the year ending June 30, 2017 were 1,144,925 vs. $952,149 for the year ending June 30, 2016.
Fred Wicks, Chairman and CEO of iTeknik stated, “FY 2017 was a pivotal year for us. In the beginning of our year, we transitioned from the Telecom industry to Marketing, Advertising and the digital media space with the start-up of our Big Rhino Agency in January. From January to this past August Big Rhino, which accounts for almost all of our sales, has been able to increase revenues by more than a hundred percent.”
In conjunction with the posting of the Annual Report, iTeknik released the following letter to shareholders.
Dear Shareholders,
On July 1, 2017 we began Fiscal Year 2018 on a very optimistic note because of the remarkable progress we made in the last half of Fiscal Year 2017. I want to take this opportunity to update our Shareholders on our results for the year and our vision for the new year ahead.
Fiscal Year 2017 Accomplishments
FY 2017 saw dramatic changes and accomplishment in your Company. Some of these include:
- Completed the transition from the Telecom Industry into the Advertising, Marketing and Digital Media space
- Negotiated away more than $200,000 of debt from our books
- Secured a commitment of $15 million in capital for the purpose of growing the Company through acquisition
- Utilized a tranche of $5 million to buy the assets of a former Advertising agency
- Formed Big Rhino Corporation as a subsidiary in order to utilize the purchased assets
- Hired an extremely talented staff to operate the new subsidiary company
- Started up Big Rhino Corporation on January 1, 2017
- Increased Revenues from January to August by 101%
- Acquired The Blender Company and valuable assets including government contracts
- Began a financial audit in order to help uplift to the OTCQB
- Took action against a creditor with a potential settlement in the works.
By any standards these accomplishments have been significant and prove that our strategic plan in process is working. The following paragraphs provide more detail on these accomplishments
Revenues
Revenue for FY 2017 was $1,144,925. This amount was almost all from our subsidiary, Big Rhino, and was accomplished in six months. For the 3-month period ended June 30, 2017 the Company posted revenue of $645,661 vs. revenue of $499,313 for the quarter ended March 31, 2017. This represents an increase quarter over quarter of 29.3%. During the quarter ended March 31, 2017 the Company also benefited from a one-time adjustment to other income as the Company’s Big Rhino was able to bill an additional amount of $157,316 for services performed but not previously billed. Since the Company has been in a high growth mode in a new industry the quarter over quarter results are very indicative of the Company’s progress.
The following chart outlines the monthly results and the impressive growth rate that the Company has achieved since the start-up of Big Rhino in January. While we remain in the development stage and we have cash flow concerns and risks our vision is to become an established seasoned player in our markets.
Historical:
Month Revenues % of Month to Month Increase
January $130,994
February $176,563 34.7%
March $191,756 8.6%
April $196,343 2.4%
May $227,426 15.8%
June $221,893 -2.4%
July $230,938 4%
Booked Revenue
Month Revenues % of Month to Month Increase
August $263,029 13.9%
Earnings As reflected in our financial statements the Company had a net Loss for the quarter ended June 30, 2017 of -$362,775 vs a net profit of $74,534 for the quarter ended March 31, 2017 Expenses for the quarter ended June 30, 2017 included $ 150,000 for new customer acquisition, $78,564 in expenses related to the litigation (see iTeknik’s supplemental filing on OTC Markets which describe this litigation) with TCA Global Fund Management Group (TCA). We have accrued $225,000 in interest charges to TCA although management believes that these costs in a settlement with TCA could be considerably less. When compared to the quarter ended March 31, 2017 the Company reported a profit of $74,534 which included $ $157,316 in other revenue and $216,542 in income from various settlements.
The Company shows a net loss of $484,566 for the 12 months ended June 30, 2017 vs a net loss of $35,526 for the 12 months ended in June 2016. The loss in FY 2016 was derived from the Company’s former subsidiary, Send Global Corporation making a direct comparison minimally descriptive.
There are several factors that management believes will improve earnings going forward. First, Big Rhino is expected to continue to grow and improve its net income. Big Rhino has undergone a very successful cost reduction program. This program along with their high growth rate has enabled Big Rhino to go from an operating loss of $31,975 in January to a 19.1% operating income of $50,297 in August. This improvement has been achieved in only eight months.
Another factor is the litigation with TCA in which we are the Plaintiff. Management has been in settlement discussions for some time. We believe that the outcome of this dispute could improve our financial performance significantly. Finally we continue our process to find additional acquisitions that will provide more revenue and earnings.
Acquisitions
On December 30, 2016 we completed our transition away from the Telecom Industry to our new focus, Marketing, Advertising and Digital Media, with the startup of our new subsidiary, Big Rhino Corporation. Big Rhino was formed through the purchase of the assets of a former Arizona advertising agency and the hiring of new staff including key managers from that company. Big Rhino started operations in January 2017. The startup was remarkably smooth thanks to the efforts of its President, Kyle Eng and the extraordinary staff he assembled. Big Rhino has established itself as a premier provider of marketing and advertising services to automotive dealers in Arizona, California, and Nevada. In addition, Big Rhino has diversified into providing services to non-automotive customers such as the medical and real estate industries.
On August 29, 2017 the Company announced that it has acquired The Blender Company LLC assets. Blender is an Arizona based multi-cultural focused advertising and digital media firm with long standing clients in the state and local government agencies. This acquisition allows us to utilize Blender’s minority business enterprise (“MBE”) experience to expand our business. In addition, Blender holds government contracts that will enable us to expand business within state and local government agencies in Arizona. In addition, we view its Minority Business Enterprise status as a platform for future business.
Our Expectations for FY 2018
Revenue
In January of 2017 Big Rhino began to build on its automotive base and diversify into non-automotive accounts. This strategy was implemented in order to smooth out revenue swings by offsetting the seasonality of the automotive industry and enable Big Rhino to grow. Big Rhino has been highly successful in securing accounts in the medical and real estate industries. For example, in the month of June the revenues are 83% related to automotive clients and 17% related to these new industries. Big Rhino and management expects this trend to continue even as they acquire additional clients in the automotive industry.
Growth
In 2017 Big Rhino grew revenues 101% from January to August. While we do not expect this growth rate to continue, we do expect a steady growth in Big Rhino revenue. In addition, with the acquisition of Blender, we expect to increase business in the government sector.
We also expect to continue to implement our strategy of growth through increased sales and acquisition. We are talking with a number of very successful companies whose owners would like to ultimately exit their business or who are looking for a company like iTeknik to help them eliminate barriers that prevent them from growing. iTeknik can help with investment capital, economies of scale and the synergy they could obtain with other divisions in a larger organization.
Profitability will be another major focus in 2018. As we bring in other successful acquisitions we will be able to take advantage of economy of scale and additional cash flow to service our debt while we continue to grow. We have done the calculations and we know how to achieve profitability.
Shareholder Communications We will also increase Investor Relations activities so that our Company and our strategy become more familiar with potential investors. To help provide more confidence to potential investors in our Company, we plan to complete the financial audit that we have started. Now that our Annual Report is complete, we are able to use this year’s results in the audit process. We anticipate that we will complete the audit early in the first quarter of the 2018 Calendar Year. The bottom line is, like you, we are all investors in our Company and we will continue to work hard to increase the value of our corporation.
About iTeknik Holding Corporation: iTeknik Holding Corporation’s strategy (OTC Pink: ITKH) is to acquire fundamentally sound companies that are market accepted, scalable and demonstrate a quantifiable value proposition. Our focus is in companies that have strong market presence, brand awareness and talented and dedicated management teams. We seek companies with the potential to achieve exceptional performance over time in the Marketing, Advertising and Digital Media space and related technologies. iTeknik lends its operational support, management approach and financial resources to these companies to achieve improvements in revenue and earnings growth as well as positioning in the marketplace. iTeknik Holdings currently operates one wholly owned subsidiary, Big Rhino Corporation. For more information check us out at www.iteknik.com .
About Big Rhino Corporation: Big Rhino Corporation is a wholly owned subsidiary of iTeknik Holding Corporation and is a full-service advertising and digital media agency. Big Rhino excels in providing on-strategy, fast, precise and creative marketing solutions that get our clients BIG results. We maintain a nimble in-house creative team with a unique talent for delivering the highest quality creative that we believe is faster than anyone else. When combined with our completely integrated digital, interactive and media teams, our clients have access to a strategic and responsive advertising machine. For more information check us out at www.bigrhino.agency
About Blender Company, LLC: The Blender Company LLC. Blender is an Arizona based multi-cultural focused advertising and digital media firm with long standing clients in the state and local government agencies. Blender’s has extensive minority business enterprise (“MBE”) experience. Blender holds government contracts and has significant potential to expand business within state and local government agencies in Arizona.
Safe Harbor: This document contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this letter will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved. In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Annual Report on Form 10-K, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements. Figures herein are unaudited and if audited results may vary.
Fredrick Wicks Chairman and CEO info@iteknik.com 561-594-6235
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