Article: "HHSE Is A MICROCAP RUNNER" ht
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Hannover House Inc (OTCMKTS:HHSE) Is A Microcap Runner
By Jarrod Wesson / in Momentum & Growth, Momentum Stocks, Stocks, Tech / on Tuesday, 23 May 2017
Hannover House Inc. (OTC:HHSE), the media company focused on production and distribution of feature films for theatres, home videos, and Video-On-Demand formats, has recently delivered interesting news that the market celebrated by pushing up its shares. Undoubtedly, the most substantial news is the merger with Crimson Forest Entertainment Group Inc. (OTCMKTS:CRIM). But, the share price started its uptrend a little before its announcement, thus we will cover some other news that will help justify the company’s recent growth along with its financial situation. Have a look at the recent price action.
Business
Hannover House, Inc. is a Wyoming Corporation. According to the most recent corporate filing, the business entity was created in 1993 and has gone through many business combinations. The business objective of the firm is very well resumed in that document:
“The Company is actively involved with the production, acquisition and distribution of entertainment products into the USA and Canadian markets, including theatrical films, home video releases, rights licenses of films and videos to Video-On-Demand platforms and television, as well as book publishing (including printed editions and electronic “E-Book” formats).”
- Films and videos: The company acquires distribution rights from production companies or media companies and makes use of its recently formed multi-studio sales cooperative, Medallion Releasing, Inc. to perform sales & marketing functions on behalf of the owners. In 2010, thanks to the merger with Target Development Group, Inc, the company commenced using new titles being released under the Hannover House label, which, according to the company, is more lucrative.
- Books and E-Books: The same logic applies to the printed books and e-Books business. HHSE acquires publishing rights and sells and promotes the books. The margin of this business is higher than that of the the films and video business, but the upside potential is said to be not that high. In our opinion, it is good that the company has exposure to both businesses. At the end of the day, being more diversified diminishes the operating risk of the company.
Who are the customers? Given that the company distributes its products to the public, market participants would need to know whether the company collaborates with large chains. Yes, have a look at the most important customers of HHSE:
-Wal-MartStores, Inc.
– Netflix
According to the company, both of them represent 15% of the total revenue of the company.
Recent Developments
Most of the company’s press releases are about deals with production companies. As we cannot cover them all, let us cite them so that investors can check if interested:
– On May 19, 2017, HHSE and North Carolina’s Atlantic & Pacific Film Studios will be working on a new venture
– On April 28, 2017, HHSE will be distributing contents for Producer Emsch Schneider of Austrian-based Illusions , Ltd.
– On March 24, 2017, HHSE signs a distribution contract with FilMart with Chinese streaming giant iQIYI
– On December 12, 2016, HHSE signs a deal with Director Jasmin Dizdars acclaimed World War II drama, “CHOSEN,”
In our opinion, the revenues that these distribution contracts will create in the future excited the market, which responded by pushing up the share price this year. The share price went from trading at the level of $0.01 to more than $0.03 recently. Additionally, the stock has become very popular on the message boards.
The merger
On April 26, 2017, it was announced that Crimson Forest Entertainment Group Inc. (OTC: CRIM) and Hannover House, Inc. (OTC: HHSE) would merge to create a larger independent distributor. Crimson was founded in 2010. The CEO of Hannover House, Eric Parkinson, said the following about the firm:
“A Crimson Forest and Hannover House merger is expected to fill the demand from independent and international productions, which seek distributors that have direct access to theatrical, as well as Home Video and VOD & Digital sales. We’re optimistic about what these new opportunities and corporate structure will bring to Hannover House and our shareholders and excited by the upcoming titles that we will be announcing and releasing in the upcoming weeks, which we fully anticipate will have a substantial impact on the growth of our combined company”
We could find substantial information on the iHub financial forum about the merger. Some market participants seem to be quite excited about the firm and are posting information on this site. Additionally, in another press release, it was noted that the company may be able to be listed on the Nasdaq following the close of the merger:
“Upon regulatory approval of the corporate merger, shareholders in Hannover House, Inc. will receive shares in a newly rebranded Crimson Forest stock, which both companies feel will be positioned for uplifting to NASDAQ within a year.”
CONCLUSION
Hannover House has exploded up the charts this year as a result of several things. First, the company is signing a large amount of deals with production companies that may generate revenues in the future. Furthermore, the merger with Crimson will create a bigger company with more financial resources and may be uplisted to Nasdaq in the future. That was definitely appreciated by the market. Finally, we checked the annual report and saw that not only the company has been operating in the sector for long time, but has also signed contracts with relevant content distributors, such as Wall Mart and Netflix. To sum up, there is a lot to like in this company and it seems to be growing. So, we encourage investors to stay alert as its bull run looks set to continue. We will be updating our subscribers as soon as we know more. For the latest updates on HHSE, sign up below!
https://www.insiderfinancial.com/hannover-hou...er/123181/
Disclosure: We have no position in any of the securities mentioned and have not been compensated for this article.
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