Hannover House Inc (HHSE)

[Dogfish Head]

Here are a couple of posts to maybe consider:

Usually audit fees are paid in advance. Our audit cost about $100,000 but we were a public company with 150 million in sales. Deloitte and Touche performed our audits with a staff of three for a period of three weeks. I should also note that we had about nine employees in our accounting department that were constantly pulling documents for the auditors for the full period of three weeks. IMO, Hogan Taylor is having Fred pull all documents involving costs associated with the library including customer invoices, vendor invoices for cost to manufacture DVDs, vendor invoices for shipments, and all other costs relating to a DVD library. This is extremely time consuming for one individual or a few especially if the verifiable documents have been boxed and filed away in storage. The audit is more of a job than many realize. There is also the job of Hogan Taylor trying to determine the fair value of the library. The DVD industry is such a specialized industry that I believe Hogan Taylor is trying to find some company specializing in DVD library valuations to independently value the library and I believe IMHO that this is where the hangup is. I believe the value of the library is not simply determined based on previous DVD sales as others claim. One can own a library and not generate any revenue because the titles are newly acquired or the fact that there did not exist a proper channel to distribute the movies to the market. HH is a very young company who is currently working on establishing channels for the DVDs and Blue Rays through Best Buy, Walmart, and the other mentioned previously in PRs. Sorry for the long post but these are just my opinions based on some of my experience.

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AND

Choppers; good observation. I posted this a little while back and since we're on the topic, here is the re-post.

Quote: It would seem to me, that A full GAAS audit of a film library would entail scrupulously examining the potentiality of:
1) each and every title's value
2) the potential Cost of Goods Sold of each of those titles during the validated audit date's "snapshot," which in this case is 12-31-2009
3) and all of the above relative to an entire industry standard valuation regardless of what company actually owns and exercises the right to make profit from the films...

The snapshot might possibly consider business climate in the operating sector, new technologies, etc. So, yes, it could become quite daunting and laborious. Its especially important because this can ultimately (or in this case "did") affect most of the financials: Statement of Cash Flows, Income Statements, EPS, Balance Sheet, ---Business Acquisitions, Credit Lines, (off-balance sheet financing), Cash Equivalents, etc. But this is JMHO, call it a hunch.

If we get quarterly reviews not long after the 2009 auditeds come out, and they're even close to what EP posted recently, you've got assets that clearly outweigh the liabilities. Maybe the HTYMP pass wasn't such a bad idea when valuing the company... all things considered. imo.

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