iTeknik Holding Corporation Releases Letter to Shareholders
WEST PALM BEACH, FL-(Marketwired - Jun 12, 2017) - iTeknik
Holding Corporation (OTC PINK: ITKH) today released a letter to
shareholders from its Chairman, Fred Wicks.
Dear Shareholders,
iTeknik Holding Corporation has seen many challenges and
undergone some dramatic changes over the past few years. In this
letter to our shareholders I wanted to take the time to review with
you where we have been, where we are now, where we plan to go.
Where we have been:
Over the last few years, we realized that our primary operating
company, Send Global Corporation, suffered from eroding margins due
to a tremendous increase in competition in the telecom industry as
well as major changes in the availability and cost of the products
we sold. This downward trend was accelerating and we could see the
day that we would no longer be a "player" in this space. Because of
these competitive factors, we entered into an agreement in
September 2015 with one of our former officers to begin the process
of divesting ourselves of Send Global. We initially sold 49% of the
business in a share exchange with this former officer. Then in June
of 2016 we divested our controlling interest by offering a portion
of our stock to an unaffiliated third party for services rendered,
and we became a minority shareholder. Since then Send Global
Corporation has ceased operations and we have written down this
minority interest to zero on our books and records.
Our new direction:
The telecom industry had been very volatile and constantly
changing for some time. So we decided to search for opportunities
that could provide for growth, in a different high tech space. We
looked for companies that would also benefit from our technology
and business know how. We decided to focus our search in a number
of high tech sectors. One of those areas included businesses in
digital media, advertising and marketing, especially fully
integrated agencies.
Using the relationships that we had developed over the years, we
discovered an opportunity with TCA Global Master Credit Fund, L.P.
("TCA"). TCA had recently foreclosed on the business of a fully
integrated Advertising Agency and they were looking for a buyer to
purchase the assets of that business. Based on the projections
supplied by TCA, as well as the fact we would be able to hire some
of the professionals who worked for the former Agency, it looked
like an attractive opportunity. TCA offered us a $15 million dollar
revolving line of credit with an initial advance of $5 million from
which we paid TCA for the assets and increased our working capital.
We closed this transaction on December 30, 2016 and placed the
assets into our Big Rhino Agency, subsidiary.
Where we are now:
TCA Litigation
From the outset we encountered issues with this new venture
which led to our decision to initiate litigation against TCA. Our
suit alleges among other things, that TCA withheld more than
$300,000 of our reserve capital at closing, and misrepresented the
financial projections of the former agency. In addition the suit
alleges that TCA didn't pay certain liabilities of the former
company that we were obligated to pay in order to continue the new
business. While there are no guarantees in litigation, we filed
this action because we believe that we will get a better result for
our shareholders. Our dispute with TCA has not impacted the
operations of Big Rhino. And though we have disputed the amount
owed to TCA in our litigation, we have taken a conservative
approach by posting our financials to include the accrual of the
full interest charges that are claimed by TCA.
Becoming a fully reporting Company on the OTC QB.
We have engaged a PCAOB accredited firm, L&L CPAs, of
Charlotte, North Carolina to audit our financials so we can move up
to the OTC Markets QB tier. We expect this project to be completed
sometime after the end of our 2017 Fiscal Year which ends on June
30, 2017. We believe that this move will benefit our shareholders
by building confidence in our financial reporting and allow us
access to better priced capital in order to make acquisitions in
the future.
Prospects for our subsidiary, Big Rhino Agency
Our exceptional team at Big Rhino has been working hard to
increase sales and turn a profit. Considering that the company only
started operations on January 1, 2017, their efforts have been
outstanding. On May 22nd 2017 we reported our results from our
first quarter of operations. The results are very encouraging. For
the quarter ended March 31, 2017 we had Gross Revenues of $499,264
and Net Income of $74,534. Big Rhino Management has been working
hard to acquire new accounts and we expect revenues to continue to
grow. We also expect income to increase for the following reasons.
1) We are currently experiencing higher than normal expenses as we
ramp up to handle the new influx of business, 2) we have one-time
costs associated with becoming a fully reporting Company and, 3) we
have ongoing litigation costs which will eventually cease.
Another very encouraging sign is that Big Rhino Agency is
expanding its reach into non-automotive sectors. When we acquired
the assets that became Big Rhino, almost all of its revenue was
derived from automotive dealers. The advertising needs of these
clients are seasonal with the quarter just ended being the least
advertised time of the year. The late spring-to-fall seasons are
the busiest months for automotive clients and we should see this
effect on future financials. In addition, we have begun to
diversify with clients outside of automotive, including new medical
accounts. With the great base of automotive clients and the new
non-automotive business, we expect to smooth out revenue over the
course of the year.
The Future
With Big Rhino as a base and solid audited financials we will
begin to look to make other acquisitions in the advertising,
marketing and digital space as well as other complementary
businesses. In addition, we will work hard on lowering our debt. We
are confident that we have the ingredients to build something
special and deliver more value for shareholders.
As founder and Chairman of iTeknik Holding Corporation, I want
to take this opportunity to especially thank those shareholders who
have been with us for many years. I have met some of you personally
and talked with many more on the phone. Your Company has overcome
many obstacles and now is moving in an exciting new direction. One
thing remains constant. Your management team has always focused on
increasing shareholder value. As I have told you in the past, we
too are shareholders. We believe that by staying true to our
strategic plan and working hard we will build a substantial company
with revenue and earnings growth. So I want to thank those of you
have stayed with us for so long through our turbulent times. I
truly appreciate your loyalty and I promise that we will work hard
to achieve our goals.
iTeknik Holding Corporation (OTC PINK: ITKH) trades on the OTC
Pink tier of the OTC Market For quotes and market information on
the company, visit
http://www.otcmarkets.com/stock/ITKH/company-info.
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.
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
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.
Contact Information
Contact: Investor Relations Tom Nelson Tenassociates33@gmail.com
480-326-8577
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