Options Media CEO resigns as Justin Bieber marketing deal flops

Scott Frohman resigned as CEO and director of Options Media Group Holdings after the company’s marketing deal with pop star Justin Bieber failed to generate significant sales.

The Boca Raton-based company (Pink Sheets: OPMG) made headlines in May 2011 by signing a deal with Bieber to endorse its PhoneGuard, an application that prevents cellphones from texting and using other distracting functions while driving, in exchange for warrants to purchase 121.2 million shares of the company for a penny each. That deal was later revised to 242.3 million shares at a half-penny a share.

That might sound like a discount, but shares of Options Media were trading at nine-hundredths of a cent on Friday morning.

Despite Bieber’s endorsement of PhoneGuard, its sales are anemic. Options Media lost $3.9 million on revenue of $1,333 in the first six months of 2012. In fact, the company’s sales of PhoneGuard in the year ago period – when the Bieber deal was in place for just one of those six months – were higher, at $24,519.

As of June 30, the company had $1 million in assets, versus $8.4 million in liabilities. Its liabilities included nearly $2 million in accounts payable and accrued expenses.

The company has been issuing stock in private placements to cover its cash needs.
According to a U.S. Securities and Exchange Commission filing, Frohman resigned Sept. 10. It is not clear who is leading the show at Options Media now.

The company’s website says that The Zimmerman Agency handles Options Media’s press inquiries, but a representative at the agency said it no longer represents the company. The contact number for Chairman Keith St. Clair at the bottom of Options Media’s latest press release, dated Aug. 22, wasn’t accepting messages.

For a company that specializes in cellphone applications, that’s a little odd.