$SAPX lotto play with textbook support at .0004 IDX:SAPX lotto play with textbook support at .0004, on watch for a break of this descending triangle
SAPX trade ideas
$SAPX Entertainment StocksSeven Arts Entertainment Inc. (OTC: SAPX) is one of the most promising entertainment stocks as it looks to grow in the movie production industry. With the company preparing to release a documentary film and start operating its facility in Atlanta, SAPX has the potential to cement itself as a major player in the Atlanta region. Considering the company’s upcoming catalysts, SAPX stock could be one of the entertainment stocks to hold this year as these catalysts roll out.
SAPX Fundamentals
The competitive film and music industries thrive on popular demand and enjoy a constantly growing consumer base. Making up for lost time, the global market for the combined industries is expected to reach $308 billion dollars in 2021 with more growth expected in 2022. Seizing on this sector’s rebound, SAPX secured $1.5 million in funding, which Seven Arts’ CEO – Jason Black – believes will “significantly help jumpstart the company toward realizing its former glory”. The company is already springing into action, using the funding available over the next 6 months to finance some of its film and music ventures.
This non-dilutive funding will be repaid through partial revenue and royalties from its long list of upcoming projects which is a bullish sign indicating the likely success of its projects. With this in mind, SAPX has announced its upcoming sci-fi feature film – “Venus Effect” – which could be a huge hit with Andrew Burn as its director.
A cinematographer and director most known for movies like: “Everyone Will Die, The Journeyman and Lighten Up”, Burn has also collaborated on music videos with big name artists like Fortune, T.I., and Wiz Khalifa. His role in the film could give SAPX’s new movie a massive head start in terms of box office potential and possible returns on investment.
Even though Venus Effect is still in early-stage production, it is already moving ahead of schedule. And while several cast members have yet to be announced, producers are currently in the process of working with casting agents to secure several notable leads. Given the movie’s exciting potential, various streaming platforms have already expressed interest in picking up the film and Seven Arts is confident a deal will be closed shortly.
To ensure the film reaches a broader audience, Seven Arts is focused on connecting with streaming networks like Hulu and Netflix and embracing new ways of producing and displaying its content. With these future goals in mind, the company has made investments in new equipment and technology replacing its green screens with LED Screens for a more cost-effective production.
Proving its creativity, Seven Arts Entertainment Inc. plans to mint various NFT’s in promotion of the movie and to help guide the company’s NFT plans, SAPX has brought onboard a leading cryptocurrency trader, miner, and influencer. The company believes its initial offering will bring in more than $1 million in NFT revenue.
Major movies like Warner Brothers’ Dune and the Matrix “Resurrections” sequel are already taking the lead in exploring the unexploited market opportunities of movie themed NFTs. Recent trends have already shown that the NFT market has provided 15% of financing for some feature films and as more people jump on board the NFT bandwagon – that number will only grow.
NFT’s could easily be a lifelong ticket to fan engagement and revenue for film and music producers like Seven Arts. Just as DVD’s and streaming services were the meteorite to the proverbial dinosaurs of VHS tapes and cable TV, movie themed NFT’s could be the next revenue producing cash cow. Seven Arts CEO is definitely bullish on this prospect saying he believes that what the company has under development “will generate $10 million plus in projected revenues” in the near term.
As for its operations in the music industry, SAPX acquired the Atlanta based film and music studio, Muse Media LLC in July which will act as Seven Arts satellite in the city’s thriving music and film production sector. Through this subsidiary, SevenArts will work on “indie” style production concepts, music “A&R”, and test marketing. With a facility that accommodates its many needs, the Muse Media satellite will allow for a smooth process pre- and post-production. It will also take on various social media initiatives for film promotions and music videos through its social media platforms.
This is because, as a multimedia and entertainment company, Muse Media has developed a fresh approach with the goal of revitalizing the industry. Reimagining distribution, promotion, and content – it looks like this investment fully supports SAPX’s growth plans and new business direction.
But choosing Muse Media as a subsidiary was likely a strategic move for the company as well because Georgia’s film industry is on track for a comeback with pandemic restrictions easing. Despite the pandemic, Georgia’s film and television industry hit a new all time high of $4 billion in direct production spending this year alone. Ranking among the top three states for its film industry in 2018, this year Georgia was home to more than 366 film productions in-state.
More importantly, for investors, this acquisition adds a semi-recurring revenue model that can supplement SAPX’s cash flow during major feature productions. Because the company operates in both industries it can now expand its production services for a wide range of clientele.
Already well established in the music industry, Seven Arts has digital streaming partnerships and is currently working on developing new ones. The company holds all the performance and mechanical licenses of its recording artists which allows it to easily integrate into broadcast or radio, commercials, and digital distribution like iTunes.
However Seven Arts has another catalyst up its sleeve. The company has hinted at its vault of unreleased tracks featuring some very well-known names in the music world. Because it has the full distribution rights for them, it can remaster and re-release these “never-before-heard-tracks” for fans to purchase.
Setting Seven Art’s production plans aside, the company has most recently caught investors’ attention as it proceeds with plans to execute a major share reduction. After hiring a new Transfer Agent, Seven Arts Entertainment is confident it will be able to shave 2.5 billion shares from its OS leaving roughly 1.5 billion shares outstanding and a float of approximately 1.3 billion. After conducting a poll regarding the share reduction, many investors are waiting on SAPX’s promised PR regarding its decision.
Unlike many production companies which run themselves into the ground with debt and spending, Seven Arts management team is running a tight ship, free of debt except one convertible note set to expire in 2022. The company has also assured investors that it will not pursue a reverse split, choosing to generate real value for shareholders through growth instead.
It’s worth noting that Seven Arts emerged victorious following a rough and tumble with the notorious OTC CEO George Sharp earlier this summer. After “a series of online slanders” the “litigious penny stock gadfly” took Seven Arts to the San Diego Superior Court which dismissed most of his claims before determining that Mr. Sharp owed the company compensation as a result of his actions. Guess it goes to show this is one of the few entertainment stocks to take seriously on and off the screen.
Movie Project
Looking to kickstart its movie production business, SAPX completed the principal photography of its documentary film – Manspeaker – which is based on the Green Jello’s founder Bill Manspeaker. As the world record holder of the world’s largest band, Green Jello rose to prominence in the early 90s as the first band to sign a video recording contract and was later nominated for a Grammy. Based on this, “Manspeaker” is expected to be a hit considering the growing trend of nostalgic music documentaries like The Dirt and Pistol.
With this in mind, SAPX held talks with executives from Blackhall Studios, Blumhouse Productions, Morgan Creek Entertainment, and HBO Max prior to filming who showed interest in the documentary. On that note, the lowest figure discussed in these talks was $5 million and a revenue share that could exceed $20 million. In light of this, the company could be on track for financial growth – making SAPX of the most intriguing entertainment stocks.
In addition to the film, SAPX and its music subsidiary Muse Media agreed with Manspeaker to produce an album to be released in conjunction with the film. At the same time, SAPX and Manspeaker agreed to develop NFTs which will feature historical content of Green Jello. Through the film, NFTs, and the album, SAPX projects to realize more than $40 million in revenues. Considering the scale of this documentary, SAPX stock could be one of the best entertainment stocks in the OTC as the company continues pursuing additional growth opportunities.
On that note, SAPX has been advised to pursue a multi-picture deal since a three to five film deal with a major production company could be an opportunity for the company to achieve financial growth. In this way, SAPX could pursue up to $20 million upfront with the potential of realizing more than $80 million over five years of a single deal. For this reason, SAPX stock could be one of the entertainment stocks to hold onto for the long-term.
Music Subsidiary
Meanwhile, SAPX plans to focus on Muse Media over the coming year to invest in music artists. To facilitate this, SAPX intends to utilize its A&R representative’s – Thom Hazaert – 30 year experience in the music industry to identify established and upcoming artists open to integrate their work with technology. Considering that NFTs and the metaverse are expected to be pivotal in how albums are released, SAPX and Muse are working to incorporate these elements into their music catalog – beginning with Green Jello’s upcoming album for the “Manspeaker” documentary. Based on these plans, SAPX could be positioning itself to become a significant player in the entertainment industry in the future – making it one of the entertainment stocks to watch this year.
Atlanta Facility
In the meantime, SAPX is continuing to develop its 3000 square foot Atlanta facility with the aim of starting operations in October. These efforts are highlighted by the addition of a new consultant who has worked on more than 300 films. Moreover, SAPX added new personnel to ensure that the facility is the most advanced Dolby Atmos mixing and Foley stage in the Atlanta region. Meanwhile, the company entered into a partnership with production company – Ascended – to oversee post production work for SAPX and Muse through an experienced Pro Tools certified engineer.
Given that most post production and audio mixing is sent to Los Angeles after filming is completed in Atlanta, this facility could be on track to achieve its projected revenues of $5 million annually. Based on this, SAPX could become a major player in this niche in the Atlanta market – allowing the company to grow financially in the future. In light of this, SAPX stock could be one of the most profitable entertainment stocks in the OTC.
Funding
Since the company’s plans require significant funds, SAPX acquired a 7.5% interest in Picture Pro LLC to capitalize on its team’s experience in raising capital for feature films through third parties. By having access to this funding, SAPX will be able to produce larger feature films and become more competitive in the movie industry. At the same time, SAPX would be able to raise funds without diluting shares – which affects the company’s shareholders. In addition, SAPX expects to be able to settle its convertible debt before maturing. As a result of this funding, SAPX stock could be a low risk play considering its low PPS.
Uplisting Plans
With the company preparing to release its annual report soon, SAPX is bullish it could submit the required audited financials to become SEC reporting and uplist to the OTCQB with the goal of returning to the NASDAQ. Although these uplisting plans require the company to maintain a minimum price, SAPX intends to meet these price requirements organically without performing a reverse split. To achieve this, SAPX plans to increase its IP and generate additional revenues to reflect on the PPS. With this in mind, SAPX projects to realize $50 million in 2023 with the potential to increase to $300 million over the coming five years. If these projections are achieved, SAPX stock could be one of the most undervalued entertainment stocks at its current PPS.
SAPX Financials
According to its Q3 report, SAPX has $56.9 thousand in assets and $3.5 million in liabilities. Meanwhile, the company reported $15 thousand in revenues and $30.1 thousand in operating costs. Despite this, SAPX reported a net income of $77.3 thousand thanks to a $108.6 thousand gain on revaluation of derivative liability. While the company remains in its early growth stages, SAPX could be positioned for financial growth as it continues to grow its business.
Technical Analysis
As one of the most promising entertainment stocks, SAPX is currently trading at $.002 and has supports at .0018 and .0014. The stock also shows resistances near .0025 and .0034. Considering the growth potential of the company thanks to its upcoming catalysts, SAPX could be one to hold for the long-term. Meanwhile, the stock recently dropped below its MA support and appears to be heading to retest its support. Based on this, bullish investors could take a starter position near $.0018 and average up as the stock moves.
SAPX Forecast
From a technical standpoint, SAPX has a number of catalysts that could bring volume to the stock this year. Projecting to realize $40 million from its minted NFT collection, Green Jello album, and upcoming movie release, SAPX stock could be well-positioned to reach the next level. Meanwhile, the company’s Atlanta facility could cement SAPX as a leader in the Atlanta market since it is expected to be the only Dolby studio licensed for the movie industry in the region. With the company expecting to generate $50 million in revenues in 2023, SAPX stock could be one of the promising entertainment stocks.
