Hop-On Inc (HPNN)

[Richard Headlock]

Why it is probably Huawei - Third largest Smart Phone Manufacturer in the world


In these type situations you have to start with the information that you know and work from there. So this is what we know:


1) Products are currently sold in Best Buy and other similar locations - Known entity


2) Includes smart Phones and tablets/E-readers


3) Company would not already have an Android License but need one.


4) 100m in revenue for HPNN - Has to be a big company


5) There are 7 companies Peter Michaels is following on Linkedin (Google, Microsoft, USA CIG, Synaptics., Chipworks, Apple and........Huaweii..Huawei is the latest one)


http://www.linkedin.com/profile/view?id=2060770&authType=OPENLINK&authToken=Zp-S&locale=en_US&srchid=39024651394996007271&srchindex=2&srchtotal=67&trk=vsrp_people_res_name&trkInfo=VSRPsearchId%3A39024651394996007271%2CVSRPtargetId%3A2060770%2CVSRPcmpt%3Aprimary



6) Microsoft has granted a License to HOP-On for this IP


7) Huawei has been pursuing a license since 2011 but has not signed for one....why? I think I know and there are two reasons


8) ZTE and others have agreed to licenses leaving Huawei only it would seem in the group of the largest manufacturers.



When you crunch this data together, it becomes apparent that Huawei is by far the likely choice.




So why HOP-ON and Huawei? Two reasons - 


Check out this in the filings

These carefully negotiated “have made” license rights permit Hop-on to have patented products made by third parties, in addition to the standard rights to “make, use and sell”. The license rights to essential patents has been from Qualcomm, Motorola, InterDigital, Lucent, NEC, Alcatel, Ericsson, Nokia, Philips, Siemens, and now from an Android platform, give Hop-on a stronger position to manufacture, market and distribute than the likes of Samsung or Apple. 


Worldwide patent law amendments have allowed patent owners a more aggressive means of preventing patent infringement than was previously unavailable, including the ability to pursue injunctive relief. While headlines abound with patent wars among Samsung, Apple and Google, patent owners are also winning judgments against the many less known manufacturers in evolving markets, such as China. 

 

With insurmountable judgments levied against some Chinese firms, many are being forced to adjust their business practices. Working with a holder of “have made” licenses, like Hop-on, permits existing 

Chinese and other international firms to continue in business, forgoing the need for audits that would identify years of non-compliance and provide the evidence needed for compensatory damages. 

Hop-on has intimate relationships with many Chinese manufacturers and has a history of successfully monetizing patent portfolios under Hop-on and other brands. It is now uniquely positioned to fill an ever increasing gap in the Chinese OEM and ODM mobile communications, computing and home entertainment devices marketplace

Huawei has a long sketchy history - Just google them from concerns over threats to security, espionage to financial impropriety..



And then there is this


Microsoft is in a bit of a bind here. They need to get Windows OS into as many phones as possible. Most prefer Android. Huawei is going to be making phones that utilize both. Microsoft just licensed out their Windows IP to Huawei.....Now would Microsoft openly note the licensing of both OS to one company?


After doing some research, I came upon this blog which kind of put things in perspective


http://blog.laptopmag.com/huawei-android-windows-phone


So how does Microsoft save face and get their Windows OS into more phones? Enter HOP-ON



So with Huawei you have a deal for Windows and with HOP-on you have a license for Android. They can now make both. You can also note how ZTE only has IP for Android from MSFT. Seems for these companies, it is one or the other.....And MSFT gets to save face.


Also note how HOP-ON filed two years filings at once and the legal determination on FEB 19th....The day before the MSFT announcement. Basically, this deal has been in the works for awhile and once everything is in place, it is announced...Meaning once HOP-ON had their ducks in a row, MSFT could pull the trigger.


My speculation is that Microsoft has been well aware of Huawei's plan to launch these dual mode phones. And set this deal up to enable it to take place and allow them to save face while getting their OS into millions of phones. They need to get the market a little bit pregnant with this Windows OS to get exposure. Sort of like being a loss leader. They are even giving the Microsoft license for windows away to Indian manufacturers. Perhaps even to Huawei but that is not clear yet.


I also think it is very possible that we see HOP-ON phones as early as next Q, running both Microsoft Windows and Android.


And this means immediate revenue for HOP-ON. As we know these current products are already being sold in Best buy. So HOP-On will be able to immediately begin collecting license fees. And they have minimal overhead on this


Note that the settlement reports out there between Huawei and Microsoft or Rockstar, cannot confirm that a license has been given or what the financial settlement was or even if there was one. They are all assuming. However in the cases of other companies it was announced. All the data points to Huawei.


And understand this is for worldwide sales and distribution


So what you will see is this generate substantial cash flow which will feed into the MJ patch and e-Cig business....The company seems to be running almost even based on recent filings. The $150k revenue upront here is about the difference in cash flow loss.


I also note the articles in Hotstocked and the misleading, misdirecting, false information being put out there in print. MMs are short by a lot it would seem. They hire folks to write these articles and dissemintate false and distracting information. However ask yourself one simple question....Would Microsoft bother with a penny stock company if there was not significant returns in it for them or if HOP-On was not trustworthy? I believe they set the whole thing up...not that it matters.


From the Corporate update - And how this all makes sense...

This week the Company announced that a Letter of Intent with a Chinese Manufacturer has been signed for over USD $100,000,000 in revenue. Under that LOI, Hop-on will be receiving an initial payment of USD $150,000 from the Chinese Manufacturer, and is not required to finance any aspect of the deal. This alleviates Hop-on from the costly needs of prototyping, tooling, testing, software integration, manufacturing, facilities, personnel, packaging, distribution, marketing, warranty repair, etc. for the smart phones, tablets and eReaders that will be produced for Hop-on utilizing its IPR licenses.  This is the first of several potential intellectual property rights royalty contracts that Hop-on is working on.

No financing is needed as noted above because, it is already a known product, with known distribution (Best Buy and others) and all being manufactured and financed by the Chinese.


1) Good Case is this is a different company with big Revenue

2) Better case is this is Huawei for Android only phones

3) Best Case is this is for both Android and the dual mode phones....