Hannover House Inc (HHSE)

[dukelasilvertbird]

Ivy league write up;

Hello Traders,


We had a great write up for TDGI prepared for you today, however one of our most active members sent us a" highlight write up" so detailed and accurate that we decided to discard our previously created write up for his instead. We read every single email/comment/review our members give us and if there work is good enough we make sure everyone knows. You can watch the official shareholder meeting by visiting the link here- http://www.ustream.tv/recorded/12031352

1. Explains the results for 2010, how their releases weren't as successful as they thought they would be (theatrical releases for Racing Dreams and Twelve were far below expectations) but even still they had revenues of close to a million on which they made approximately 450k profit explains how the agreements they enter into are low risk and cash flow positive.



2. Answers questions about audits. There were some delays/difficulties with the audit for two main reasons. The "shell" (TDGI) that they reverse merged into a year ago to become public has not been forthcoming with tax returns and other necessary documents so that the auditors could complete the 2008 and 2009 audits. In addition they needed to do a revaluation of their asset library (their portfolio of DVDs/books/rights to distribute movies) because it is by far their biggest item on the balance sheet. This was a lengthy process as they received evaluations from three independent parties including one party who is above reproach is a very well known and successful executive in the industry (who is also doing the valuation of asset library for Warner Home Video). Complicating the valuation is the drastic changing of the industry (the decline of the DVD market and the rise of Blu Ray and VOD) and the many titles that are in the library.


Well now that valuation has been completed and the CEO says that they have all materials requested by auditors. They will meet with their review accountant on Tuesday and will be sending all these materials to the auditors within a week or two and therefore should be expecting the audit to be completed in early spring. After which they will immediately file these audited statements with the SEC and take the steps necessary to be a fully reporting company and also look into up-listing to a different exchange.


3. Now to the valuation of the library...the valuation of the library is $24,276,709 which if you divide by OS of 471 million gives a value per share of .0515. This means that the stock price is currently under the liquidation value of the company. (price closed at .0465 on Friday)


4. They filed their unaudited annual report for 2010 which can be seen below. http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=42266. You will see that they earned 404k on revenues of 911k. However this does not include revenue from the shipments of Twelve which took place in December of 2010 because they had not yet received solid concrete numbers from Twentieth Century Fox about what their cut will be. Well the CEO offered the following speculation about what this numbers will be that will hit the books for Q1 2011. Based off of DVD shipments that have already taken place TDGI's cut will be $1.8 million in addition to 500-800k forecasted for VOD. So we are looking at $2.3 million plus for revenues from Twelve only in Q1 2011.


5. In addition to that there will be 30 releases in 2011. One of these films will be All's Faire in Love.





6. Also danced around their two "franchise" movies that they are negotiating. One is an animated, sci-fi, action film as he describes it. This was clearly in reference to the T3000, a CGI Terminator, that there have been leaks about. The other one involves Triple-A star actor/actress (never heard that term before Triple-A star) in a family movie. The budgets for these two films would be in the $70-80 million range, so these would be huge films. But he said that although they have good shots at getting some sort of rights for these, that these are in the prelim phase of negotiations and discussions and that he would not recommend buying stock on what could be in regards to these, and that the earliest that these would even be a part of the company's equation is 2012.


7.When asked about dilution/share structure. Said that they have no intention to dilute, it's not in their plans (they haven't diluted since they reverse merged over a year ago, this can be checked daily as TA is not gagged). He said that they are the largest shareholders through their restricted shares ( approximately a combined 160 million shares that are restricted) and that they don't start becoming unrestricted shares until 6 months after becoming a fully reporting company and then after that they can only sell 1%/quarter at the most.


8.An improved website will be coming out in the next few weeks. Also the CEO hinted they will be announcing over the next two weeks some of their new title acquisitions.


9. Oh and he also said that they are a highly sought after invitee to all film festivals and that they will be attending all of them (Sundance, Cannes, Toronto, etc) but unlike last year they will not be writing big checks for rights to films rather they will use their name recognition and reputation to sell themselves.


10. They have product selling in Walmart, Best Buy, Target, Sears, Amazon, Netflix, Red Box, Blockbuster, list goes on. They are established to take advantage of VOD (Video on Demand) which is money that goes straight to bottomline as there is little to no cost associated with VOD.

With the above information we can conclude that the current book value/liquidation value of TDGI is currently at least .052. Company's usually trade much higher then their actual value, usually trading 2-4 times their actually book value. This means that not only is TDGI a steal under .052 but that there's a good chance TDGI will appreciate to .104 or higher once Audits are completed.
Members who traded TDGI are currently up 3-11% depending if they held or sold at .05 with a great cost basis. TDGI is not a pump and dump stock, and does not dilute, nor pay for promotion and thus it follows the rules of Technical Analysis very well. Please pay close attentions to the chart as it will tell you what is going.

Note: We are constantly scanning the markets and should have another penny stock ready to move for you this week. If you have any questions on how to read a chart, please email us at [e-mail].