SEC Filing Summary: KSIX Media Holdings, Inc. (Form 8-K)
Business Context and Reporting Period
This Current Report on Form 8-K was filed by KSIX Media Holdings, Inc. (Nevada corporation) on October 12, 2015. The filing details a material definitive agreement to acquire DigitizeIQ, LLC ("DIQ"), a digital advertising agency specializing in lead generation for mass tort class action lawsuits. Upon execution, DIQ became a wholly-owned subsidiary of the Company.
Key Financial Metrics and Transaction Details
The filing does not provide standard financial statements (revenue, profit, cash flow, or margins) for the reporting period. However, it discloses specific transaction values and capital structure changes:
- Total Acquisition Consideration: $1,250,000 USD for 100% of DIQ membership interests.
- Payment Structure:
- Cash: $250,000 paid upon execution.
- Equity: 1,250,000 shares of restricted Common Stock valued at $0.20 per share ($250,000 aggregate).
- Debt: Three non-interest bearing Promissory Notes of $250,000 each, totaling $750,000.
- Debt Maturity Dates: November 12, 2015; January 12, 2016; and March 12, 2016.
- Outstanding Shares: 36,130,432 shares of Common Stock issued and outstanding following the transaction.
Material Changes and Unregistered Securities
The Company reported the following material changes and unregistered equity issuances:
- Acquisition: Entry into a definitive agreement to acquire DIQ, expanding operations into digital advertising for legal services.
- Unregistered Stock Issuance (Services): On October 1, 2015, the Company issued 48,000 restricted shares to Omnivance Advisors as compensation for PR services, valued at $12,000 ($0.25/share).
- Unregistered Stock Issuance (Acquisition): On October 12, 2015, the Company issued 1,250,000 restricted shares to Christopher Burd (DIQ owner) as part of the acquisition consideration, valued at $250,000 ($0.25/share).
- Service Agreement: A 90-day services agreement with Omnivance Advisors to increase investment community awareness.
Guidance, Risks, and Contingencies
The filing does not contain forward-looking guidance, revenue projections, or management commentary regarding future financial performance. Key contingencies and risks identified include:
- Liquidity and Debt Obligations: The Company has immediate and near-term debt obligations totaling $750,000 in promissory notes due between November 2015 and March 2016.
- Grace Period: The Company has a 30-day grace period to cure any default on the promissory notes with proper notice to the seller.
- Restricted Securities: All newly issued shares are restricted and subject to resale limitations under Rule 144 of the Securities Act of 1933.
Investor Verification Checklist
- Verify the Company's current cash position to assess its ability to meet the $250,000 note due November 12, 2015, and subsequent notes.
- Confirm the integration status of DigitizeIQ, LLC and whether the acquisition has generated immediate revenue.
- Review the total number of outstanding shares (36,130,432) to understand potential dilution impact.
- Check for any subsequent filings regarding the payment of the promissory notes or extension of the grace period.
- Validate the valuation assumptions used for the stock issued ($0.20 vs $0.25 per share) in the context of recent market trading.