Hannover House Inc (HHSE)

[MoneyMan]

Lets see how they are now claiming January is a huge month.

2). CREDIT LINE - Over the next six months, HHSE (and affiliated labels) have a total of 32 new release items hitting the market. The upfront costs for marketing, infrastructure, replication and freight require that the Company obtain new financing.

Funds have to be spent NOW for February and March releases that won't turn into matured collections until May and June. Typically, a direct-to-video movie (such as "GABRIELLE" as an example), requires that HHSE spend about $10,000 upfront in marketing, and about $.80 per DVD for manufacturing and Freight. If initial shipments are 30,000 units (as forecast for "GABRIELLE"), then the total of upfront, out-of-pocket costs for HHSE is about $34,000. However, those 30,000 units average out at about $6.30 each / wholesale. So the gross revenues of $189,000 represent a 5.5X-to-1 R.O.I., excluding third party participants (which are not payable until after revenues are collected). Multiply this upfront cash expenditure by 20 or more HHSE titles, then add in some theatrical and book releasing costs, and it becomes clear that while our MUCH bigger boat can haul a lot more cargo, this bigger boat's going to need a bigger fuel supply.

See how they might have scrapped together $34,000 and claim "sales" or "revenue" or "AR/New Shipments" whatever they want to call it. Reality they might have produced and shipped 30,000 to 50,000 units and are now clinging to the money that comes in May and June. Of course they will screw third party participants who most of that is owed to. But HHSE bills are piling up, they need the money coming in.