iSign’s Ad Rights Deal On Mac’s Digital OOH Network Falls Through, For Now
October 17, 2013 by Dave Haynes
A reader alerted me to an update on the very curious case of a Montreal company with little to no digital OOH advertising experience taking on a burdensome contract for the ad rights in a Canadian c-store chain.
The contract commences as of July 1, 2013 and mirrors the length of iSIGN’s contract with Mac’s with an option for a five year renewal. iSIGN will receive payments of $1,460,000 annually and has received its initial payment of $250,000. iSIGN will also receive a commission of no less than 5% on the gross advertising sales generated by iTrix throughout the term of this agreement.
Turns out iTrix put a stop payment on the first check, and the deal may or may not happen.
Says a more recent release:
Under the terms of that agreement, iTrix committed to and gave the Company a post-dated cheque for $250,000. iTrix subsequently put a stop payment on that payment and entered into re-negotiations for the agreement. Under the terms of the new agreement, iTrix will be required to make a $100,000 payment upon returning a signed agreement.
The terms of the revised agreement have been discussed with iTrix’ management and have verbally been agreed to. The agreement is currently being reviewed by their legal counsel. The specifics of the revised agreement are essentially the same as the original agreement, other than the timing of payments to be made to the Company. The major addition to the agreement, is that iTrix will acquire the option to purchase the network, at the 18 month point of the agreement, with all payments made by iTrix prior to this date to be counted towards the purchase price. iTrix understands that their purchase of the network would require the approval of Mac’s Convenience Stores (“Mac’s”).
The renegotiation of the iTrix agreement impacted the Company’s cash flow projections and resulted in the Company: re-examining the fair value of its intangible asset related to the contract with Mac’s; and recording an impairment of that asset as reported in the annual financials for the year ended April 30, 2013.
The share value has dropped in half in the last month and is down at 8 cents today. It was trading at more than 70 cents in early 2011.
The various factions are going at each other on the iSIGN stock bulletin board, which has some short-term entertainment value as some lament the state of affairs while promoters try to say the company is a bargain rocket ready for lift-off.