http://www.otcreporter.com/Reportdetails.asp?rptid=22
Overview Headliners Entertainment Group, Inc. Symbol: HLNR 501 Bloomfield Avenue Shares Outstanding: 147,097,540 Montclair, New Jersey 52 Week Range: $0.02 - $0.63 Bus. Tel: (973) 233-1233 Current Price: $0.02 CEO / President: Ed Rodriquez Website: www.rascalscomedyclub.com
Current Price: $0.02 (October 25, 2004) 12-Month Price Target: $0.30
Headliners Entertainment Group, Inc. (OTC BB: HLNR) is the only publicly-traded company in the comedy club industry. The Company has a rich 20-year history of providing the highest quality comedic entertainment in the industry with its branded Rascals Comedy Clubs. The robust U.S. Comedy Club market is estimated at $2 billion annually ! Currently there are only about 250 free-standing comedy clubs nationwide with a market demand for 1,200 total comedy clubs! Headliners? professional management team is now keenly focused on expanding their operations to eventually encompass a chain of at least 45 comedy clubs over the next four years, creating a strong national presence for the Company and giving it a dominant position in this lucrative and profitable industry! In December 2003 Headliners signed a ten-year lease for 7,000 square feet in the Palisades Center, the second largest retail mall in the United States Then, on June 10th , 2004 the Company announced that it signed its second financing agreement with Cornell Capital, Inc., making $30,000,000 available to Headliners. To-date, Cornell has advanced $4,275,000 to Headliners under the terms of their first $10,000,000 financing arrangement. On June 29, 2004, the Company announced that it had signed binding agreements to acquire a chain of dance club complexes, located in Columbia SC, St. Louis MO, Miami FL, Tulsa OK, Kansas MO, Omaha NE, Jackson MS, Cincinnati OH, Tucson AZ, and Louisville KY. The agreements provide for closing of the acquisition as soon as the audits of the financial statements of the clubs are completed. These clubs are currently generating over $20,000,000 in annualized revenue, with a 15% pre-tax profit. The Company?s blended growth strategy calls for acquiring existing full-service comedy clubs, establishing co-location arrangements or joint ventures with restaurants, clubs, and hotels, and opening comedy clubs in major attraction theme parks or top tourist/vacation destinations. Co-location agreements provide a major WIN ? WIN situation for Rascals and its co-location partners in that Rascals has minimal investment outlay per location and yet establishes an immediate presence within a lucrative market area. For example, a major hotel or restaurant could have a Rascals Comedy Club on its premises, thus drawing additional revenue from its hotel guests, visiting tourists and/or customers. This type of co-location arrangement, whether it is with hotels or restaurants, typically yields profit margins of 30% with minimal investment per location. CONTENT LIBRARY AND STRATEGY ? SIGNIFICANT REVENUE SOURCE Rascals has an important content library of original ?Before They Were Famous ? archives featuring such stars as Ray Romano, Drew Carey, Tim Allen, and Rosy O?Donnell. Their existing library features many of the great comedy talents and the Company will continually be adding to its content library as new shows are taped and recorded at its various locations. The nature of a typical comedy show lends itself to reformatting with complementary comedians, in short format. There is a robust market for video-on-demand comedy content as well as multiple distribution opportunities, which Headliners intends to capitalize on in a major way. In fact, Headliners has developed multiple channels of distribution for their comedic entertainment, such as home video sales, pay-per-view specials, HBO, VHS recordings, Showtime, Hotel rooms, etc The Company is currently well connected through strategic alliances with Pay-Per-View and Video-On-Demand, Microsoft, Razor & Tie Direct L.L.C., and InnMedia L.L.C. EXPANSION WILL CREATE NUMEROUS ECONOMIC ADVANTAGES As Rascals implements its growth strategies towards its goal of 45 comedy clubs by 2008, the Company realizes numerous economic and competitive advantages. First, economies of scale becomes a tremendous advantage. Headliners, under the very capable and committed leadership of CEO Ed Rodriquez, operates as a lean and focused organization , which provides HLNR with the ability to build efficiently and gives the Company great flexibility with multiple exit strategies. As more clubs are added, net profits are leveraged, since corporate operational expenses remain relatively stable. Additionally, the Company will be able to easily procure and retain top comedic talent due to their visibility and national presence, and ability to provide work/exposure for talent on a year-round basis in great locations throughout the United States. Obviously the diversification of many clubs in various locations will greatly reduce or eliminate the financial risk of under-performing clubs, while building a substantial overall revenue base. FINANCIAL FORECASTS AND PROJECTIONS ? EXPLOSIVE GROWTH AHEAD! The $30 million financing agreement with Cornell Capital Partners should l allow the Company to implement its aggressive long-term expansion plan. As stated, Rascals anticipates having 45 well-located comedy clubs in place by 2008. Corporate revenues are projected to grow from approximately $6 million gross revenue in 2004 to $28 million in 2005 and over $100 million in 2008 (assuming 45 operating clubs). More importantly, net profits are forecast to increase from $5 million(+/-) in 2005 to about $18.6 million in 2008 . These projections are based on a reasonable and financially sound growth scenario and point to a very bright future for Rascals. SUMMATION: Headliners Entertainment Group, Inc. (OTC BB: HLNR ), currently trading at only 2 cents (near its all-time low), has enormous upside growth potential, based on its strong foundation and strategies to become the United States? leader in the lucrative comedy industry. The Company has a current market cap of less than $3 million and is projecting major increases in revenues and net earnings from 2004 forward. The stock is obviously extremely undervalued based upon its strong growth fundamentals, excellent profit margins, and exceptional, well-connected, and committed management team. Looking forward, HLNR shares could conservatively justify valuations of $0.30 within the next 8 to 12 months and $2 to $3 within a 3 to 4 year time frame. As the country?s only publicly-traded company in the comedy club industry, HLNR presents an excellent opportunity to participate in its dynamic growth and be well rewarded with exceptional share price appreciation. .
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