UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of
1934
Date of Report: November 19,
2014
(Date of earliest event reported)
CMG HOLDINGS GROUP, INC.
(Exact name of registrant as specified
in its charter)
Nevada |
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000-51770 |
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87-0733770 |
(State of Incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
875 North Michigan Avenue, Suite 2929
Chicago, IL 60611
(Address of principal executive offices)
(Zip Code)
(732) 536-3800
(Registrant’s telephone no., including
area code)
(Former name, former
address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 Other Events.
The Chief Executive Officer of the Company, Mr. Glenn Laken,
provided a letter for the shareholders of the Company as an update of the operations of the Company’s subsidiaries. The letter
is annexed hereto as Exhibit 17.1.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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CMG HOLDINGS GROUP, INC. |
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Date: November
19, 2014 |
/s/ GLENN LAKEN |
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Name: Glenn Laken |
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Its: Chief Executive Officer |
3
Exhibit 17.1
November 19, 2014
To Shareholders of CMG Holdings Group, Inc:
XA, The Experiential Agency, Inc.
A forensic investigation conducted by current executives of XA and
CMG has revealed an ongoing pattern of fraud at XA’s New York and Chicago offices that predated and extended through the
tenure of former chairman, Ron Burkhardt.
The pattern of fraud uncovered was instituted and overseen by former
CEO Joe Wagner, who ran XA with little or no oversight from former CMG board members from 2009 – 2012. Mr. Wagner resigned
as CEO in early 2014, months after board members and consultants from CMG began to question why XA, a company with 7-8 million
dollars in annual revenue, never made a significant profit. CMG board chairman Glenn Laken launched his own investigation in an
attempt to answer that question and uncovered the following:
From the time CMG first acquired ownership of XA in 2009, and until
their departure from the firm a few months ago, Darren Andereck, XA’s president, Joe Wagner, XA’s CEO and Jean Wilson
XA’s COO all owned privately held competing companies designed to siphon business opportunity away from XA. These private
affiliations were not disclosed to the board of CMG. These undisclosed entities also defrauded the parent company by becoming vendors
to XA – charging XA nearly $650,000.00 in questionable receipts over last two years alone.
While still working for XA, Darren Andereck,
Jean Wilson and Jeff Smith, XA’s Creative Director along with employees Jesse Loma and Mike Day conspired with Joe Wagner
to strip XA’s business of all corporate clients, newly purchased computers, lockers filled with staging equipment around
the country and ongoing projects worth over $1,000,000.00 in revenue. While the investigation is not complete, we have discovered
that there are numerous instances of conversion of XA assets and funds, such as personal charges on company credit cards, payments
for cell phones for family members, reimbursement for personal travel and other expenses which did not relate to XA in any way,
in addition transactions between XA and parties owned by these former employees who did not disclose their interests in them. The
Company and XA plan to complete the investigation, including recovering e-mails deleted by the former employees, and to vigorously
pursue any and all amounts wrongfully taken from XA. On September 23, 2014, XA filed a lawsuit in the Supreme Court of the State
of New York, County of New York against Hudson Gray, Joe Wagner’s new competing enterprise, along with its principals and
former XA employees now working for Hudson Gray, alleging wrongdoing by the defendants in connection with soliciting XA’s
clients and seeking against further contact with XA clients.
While XA has suffered client losses due to the wrongful acts by
its former management and employees, XA’s new executive staff has worked diligently to develop a vibrant and transparent
business model for the future by focusing on smaller jobs with higher profit margins. The new XA staff organized and managed public
relations for the October 24th Lang-Lang Foundation Concert and Gala at the United Nations, and arranged for Sting’s surprise
guest appearance there. New XA staffers have also booked the Legacy Awards and Influencer dinner at Chicago’s Art Institute
in March. They’re currently negotiating with a well known charitable foundation to organize a star-studded movie premiere
and A-list gala dinner scheduled to take place in Manhattan in early March, in addition to a number of other corporate and charitable
projects and events. They’re also fielding RFP’s for up-fronts for this upcoming television season. XA employees in
the Chicago office continue to represent some of the regions most high profile restaurants and hotel chains, including the popular
Coco Pazzo Group, The Four Seasons Hotel Group and The Ritz Carlton.
The future is bright for the newly re-organized XA, which is now
being run by a younger, hipper, experienced and professional staff. Without the fraudulent practices of the past gobbling up profits,
XA will finally generate a meaningful financial benefit to CMG’s shareholders, and have the ability to grow into the thriving
profit center it always had the potential to be. We look forward to sharing the continued successes of the new XA, and will use
every legal avenue available to claw-back the stolen profits of the past.
Good Gaming, Inc.
Good Gaming Inc. successfully completed its
first test tournament in October 2014. We identified several key areas for development as a result, and believe over 90% of all
areas targeted for improvement will be addressed prior to when the next tournament takes place. We are currently in the final stages
of negotiation with a major gaming publisher to create a mutually beneficial alliance for our tournament in December. This alliance
will significantly speed up our global adoption cycle. While details are still forthcoming, Good Gaming is extremely excited about
this potential alliance and its impact on the overall business going forward.
In the short period of time since its official
launch, Good Gaming has further refined the infrastructure involved in keeping the content production branch of the business as
efficient as possible. We’ve begun releasing new videos every Tuesday to assure our user base that content is up to date
and to keep them excited from week to week. We are also preparing to institute a content calendar so users can preview future videos.
By offering promotional giveaways on our Twitch channel, we gained further exposure and credibility with the gaming community and
expanded our user base. The most recent Twitch promotion – a 12 hour live stream for Halloween with Good Gaming streamers
playing survival, horror, and survival/horror games while giving away copies of the most recent horror game, “The Evil Within,”
was a huge success. We have over 20 veteran gamers with thousands of hours of experience working as content contributors and streamers
for the most popular and commonly played games, such as Battlefield, Call of Duty, World of Warcraft, and League of Legends.
From a technological standpoint Good Gaming
is evolving at a rapid pace. As is the case with any new and innovative site, a big part of our job is to identify technical hurdles
and nimbly overcome them as soon as they present themselves. As a result of constant testing and stringent attention to quality
control, every system Good Gaming has built is constantly evaluated, and where necessary, improved. One obstacle that we are addressing
is our ability to gain global traction and credibility while not sacrificing the overall vision of the site. A technology we discovered
after our tournament testing cycle, which will be ready for implementation in early 2015, will give us a significant advantage
over competitors, improve our timeline, and add a significant value proposition for any alliance members.
Good Gaming expects significant strides of improvement in platform
functionality prior to the December tournament, as our feedback loop kicks in full force and new users join and supply data. While
using community feedback has a slower adoptive cycle, we firmly believe that an involved community of users who feel invested in
the site is the best way to form a dedicated and ever expanding client group, and using them as a knowledgeable and constructive
feedback source will pay dividends now and in the future. Feedback from our community of users has led us to improve on the boarding
of new members by reducing the steps required to sign up for tournaments. We expect this and other continuing innovations will
be well received, and increase our customer base and revenue flow when our next tournament takes place a few weeks from now.
Sincerely,
/s/ Glenn Laken
Glenn Laken
Chief Executive Officer
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