“We’re settling our obligations,” Spaniak told XBiz Monday. “The [iBill] payments are going out, and we see our company moving forward.”
Spaniak said that IBD is determined to quash any notion that iBill won’t settle webmaster demands. “The boards don’t tell the whole truth to the matter,” he said.
So far, iBill has made payments of $4 million in cash and term notes to 463 webmasters, Spaniak claims.
Spaniak’s outlook is one of optimism, despite last week’s news that the adult-entertainment company posted a net loss of $3.4 million for fiscal year 2004, according to a filing with the Securities and Exchange Commission.
The struggling public company said in its filing that it is paring its mainstream business holdings, targeting only “synergistic” adult businesses.
“Our integrated plan is to now commercially exploit our consolidated investments and to capitalize on the highly fragmented multi-billion adult market,” IBD CEO Steve Markely said. “We believe we have deployed capital shrewdly.”
IBD, which claimed in the filing it “depleted the cash resources that it has available” in its fiscal year, said it believes that operating cash flows and borrowings will be adequate to meet its operating needs and capital requirements through 2005. The company reported $50 million in assets.
Last week, the company said that iBill was making a payment of $41.6 million to all former and current clients for transactions using First Data Merchant Service processing through Feb. 28. The payment is comprised of $21.6 million in cash and $20 million in term notes.
IBill has taken out millions in short-term loans and recently said that European customers will receive nearly $14 million in funds held by subsidiary iBill Europe and Inteca, a trade advocacy group.
The company also last week closed on its 25 percent acquisition of XTV, a subscription-based pay TV service that allows access to more than 50 streaming channels and more than 10 interactive video products.
Spaniak told XBiz that XTV is “just a really good investment.”
Markley concurred: “This investment is strategic.”
“[IBD] is capitalizing on broad-based, fundamental changes in how adult entertainment is consumed, delivered and paid for,” he said.
With the filing, IBD also revealed in its annual statement that it is in arbitration with iBill’s former owner, InterCept, over nearly $6.9 million in disputed funds.
InterCept said that iBill’s parent breached obligations over its original purchase agreement. Conversely, IBD said that InterCept failed to deliver certain intellectual property rights, including patents.
The filing also revealed that IBD is paring off its mainstream business and moving more into adult.
IBD discontinued its auction operations in March and entered into a licensing agreement with LTC Group Inc. to use its proprietary auction software.
LTC will pay a 20 percent fee of profits, Spaniak said.
And last November, IBD sold Foster Sports, Inc., a division that broadcasts a sports talk show on two radio stations in South and Central Florida.
Through the past few years iBill, which operates from offices in Deerfield Beach, Fla., has been connected to a number of scandals and numerous webmaster complaints over nonpayments.
IBill is now operated by Corporate Revitalization Partners, a Dallas, Texas, firm that has assisted hundreds of distressed companies restructure their businesses.
In the last year, several of IBD's 300 shareholders were charged with accounting fraud, among other charges, by the SEC.
The SEC claims that shareholders Charles Samel and Jason Galanis converted a $1 million quarterly loss to a profit in pursuit of a stake in Penthouse Media Group last year, which IBD holds a 35 percent share.
Regulators want to ban Samel and Galanis from serving as officers or directors of a U.S. public company. The litigation, which is still pending, does not name IBD.