Hollywood Stock Review

Following and Finding Hollywood's Top Performing Stocks.

Roland Perry

Platinum Studios (PDOS) $0.14, Receives $150 Million Fair Market Valuation.

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Hollywood Stock Review Online, Tuesday 6/24/2008.

Chicago 55...71F. Sunny.
Los Angeles 64...85F. Sunny. (202)
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Table Of Contents:

1. Platinum Studios (PDOS) $0.14, Fair Market Valuation Study.
2. Disclaimer.

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1. Platinum Studios (PDOS) $0.14, Fair Market Valuation Study.

We just came across an 8K asset valuation on Platinum Studio's (PDOS) intellectual property portfolio (after the close). At first glance it boggles the mind (at least it boggled ours). At first glance, the number is so large, your initial reaction will probably be to "dismiss it."

http://www.knobias.com/individual/public/quote.htm?aff=SAMPLE&ticker=pdos

Now if you're thinking to yourself, "who do these guys think they are -- telling me what my reaction will be -- as if I can't have an entirely different opinion of my own..."

If you feel uncomfortable (or your feathers get ruffled) with the knowledge that we have the ability to read your mind, remember this. We are experts at knowing how investors will react to certain events or news items, as they are released by publicly traded companies. And all things being equal, (meaning there isn't a PIPE fund ready to convert and sell) we are also very good at knowing how the shares will perform (eventually) after the news is released. And finally, we are experts at finding situations which can "fuel the enthusiasm" of investors, often long before the first match is lit.

It's what we do for a living, it's how we make a living. It's the genesis of idea generation from where we think, "If investors find out, what we just found out...look out and let the games begin !"

So back to Platinum Studios.

There was no press release issued. We came across it in an 8K filed with the SEC. And while their are more eyeballs looking at Platinum Studios today, then there was 60 days ago, only 246,000 shares traded earlier yesterday. Our point being, this is actionable information -- and it is still something of a secret. An 8K is available to the public, but you wouldn't know about it unless you were looking for it.

8K Market Valuation Filing: http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=5739095

This asset valuation is in one word...and we're not really sure how to describe it...is:

Startling ? Nah. This is much bigger than that.
Exciting. Bigger than that.
Shocking ? Nope. That has negative connotations and there is certainly nothing negative about this.
Sends a chill up our spine ? Close, but that is short term in nature and this has longer ranging implications.
Amazing ? Overused (especially by us).
Gratifying ? Close again, but that usually comes after we've made a huge score -- in the face of innumerable odds and in the face of persistent short-sellers.

Think, think, think....

Oh we got it. The asset valuation report in one word, is an "OHMY !"

As in "Oh my, look what we just found."

It's that feeling you get when you discover something all on your own -- a feeling which at first you think you just can't wait to share with everyone you know, but on further thought you wonder -- if you should keep it all to yourself. It could be an unspoiled vacation spot. Or it could be a bar you stumbled into -- that only on certain nights and only between a few certain hours, it is packed with a bevy of gorgeous women from the Elite Modeling Agency who just got off work, where Martini's are half off and where the male to female ratio is twenty to one -- and nobody knows about it but you !

As in OH MY !

Now you won't get the "Oh My" feeling solely reading the valuation report (even if you read all 150 pages).

But you should get it after learning about who PREPARED the asset valuation, which we just discovered ourselves, by Googleing their name -- "Sanli Pastore & Hill" and after reading news stories (not press releases) about their incredible expertise and the stature of who has hired them in the past.

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1. The Valuation.
2. Valuation details.
3. Who prepared the valuation.
4. Today, we'll make a call to Nevin Sanli, CEO of Sanli, Pastore & Hill to get additional details.

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1. The Valuation.

We'll stop beating around the bush and blurt it out.

$150,038,000.

Now of course in the grand scale of things, $150 million isn't that wild of a figure. While we don't have exact figures, here are some estimated budgets for movies derived from comic book characters or an original animation -- to put it into perspective.

Name: Cost to make.

Spider Man 3: $258 million
Superman Returns: $204 million.
Iron Man: $180 million.
WALL-E: $180 million.
Transformers: $151 million
X-men: $150 million
Batman Begins: $150 million.
The Dark Knight: $150 million.
The Incredible Hulk: $137 million
Tarzan: $145 million.
Ghost Rider: $120 million.
Cat Woman: $100 million.
Men In Black: $90 million.
Fantastic Four: $87 million.
Daredevil: $80 million.

This is not what the movies grossed. This is not what the movies are worth. This is just what they "spent" on making them.

At $150 million, on a percentage basis, this means that Platinum Studios is selling for 20% of its fair market value, as defined by Sanli Pastore & Hill. And as we've stated before, we understand the credibility issue inherent in any company, whose shares sell for under $10, so think of it this way:

Platinum Studios has a current market valuation of $30 million, at $0.14 per share.

If Platinum Studios were selling for its fair market value of $150 million, it would be at $0.68 per share.

Using an identical capital ratio, if Platinum Studios were instead selling at $14 per share, it would have a fair market value of $68 per share. In that instance (or example) the gross discount to fair market valuation, becomes much more readily apparent.

$0.14 or $0.68 almost sounds like the same thing. $14 vs. $68, well...that's an Oh My !

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2. Valuation details.

Again, this is a 150 page report. These figures are just the divisional fair market valuation estimates (so we should call this valuation "highlights"):

Filmed Entertainment: $60,041,000
Digital Publishing: $28,816,000
Video Network: $42,391,000
Print Publishing: $812,000
Licensed Video Games: $29,852.000
Licensing and Merchandising: $7,991,000
Comic Book Chaklenge: $500,000

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3. Who prepared the valuation.

In short, Sanli Pastore & Hill.

To us, this is the "Pièce de résistance." Which we had to look up in Wikipedia.

It means: the portion of a creation which defies (i.e. "resists") orthodox or common conventions and practices, thereby making the whole of the creation unique and special. The phrase gives the sense that the referred-to element is the defining essence of the whole, that part that makes it memorable or gives it its unique character.

We went through the Sanli Pastore & Hill (SPH) website and decided we needed more. So we did a search on the firm name and then a search on the names of each of the individual partners and this is what we came up with.

Cut & Paste from various sources:

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Growing up in Brussels, Belgium, Nevin Sanli, a 1986 School of Social Sciences graduate with a BS in Honors Economics, dreamed of advancing his education in the United States and starting his own business. He was drawn to UC Irvine, not just by its geographic desirability, but also by its Economics program.

After graduating, Sanli went on to realize his second dream. As President and Co-Founder of Sanli Pastore & Hill, Inc., a Los Angeles-based business valuation and valuation advisory company, his business grew from a fledgling operation with no clients or revenues, run from his one-bedroom apartment, to a growing concern of 25 employees with 4 offices throughout California that do business nationwide.

Today the SP&H client roster reads like the who’s who of California governmental entities, along with Fortune 500 clients and privately held firms. As an independent provider of business valuation and valuation services geared to “withstand the most stringent third-party scrutiny,” Sanli’s firm proved that the market recognizes, and rewards, what he calls, “the desire of three people to create a better widget.”

Using his education from the School of Social Sciences­from research and survey techniques to statistical analysis, econometrics, and financial theory, Sanli and his partners built a cost-effective valuation service backed with airtight research and justifications made in jury-friendly English that better filled client needs.

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Each year, SPH completes over 100 valuations for its clients which have included 29 of Los Angeles's most prestigious law firms as expert witnesses in over 250 court proceedings, over 50 Los Angeles area municipal agencies and 100's fortune 500 and 400 corporations including firms like Texaco, Sears, Wells Fargo, Home Depot, Valero Energy and Artist Direct.

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The scope of valuation services include: fairness opinions for stock acquisitions, fairness opinions for buy-out offers, fairness opinions for stock repurchases, fairness opinions for ESOP's assessing going private valuations.

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SPH conducts exhaustive research and thorough due diligence leveraging its extensive in-house library, including hundreds of prior valuation reports, industry contacts, skilled research analysts, and broad access to financial, statistical, and transactional databases. And most importantly that their thorough research has enabled our conclusions to withstand intense third-party scrutiny.

(we love the term "intense third-party scrutiny")

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Los Angeles won a lawsuit with SPH's help, which could have cost the city $18 million. (Regency Advertising claimed that it suffered damages as a direct result of the city planting of palm trees (the “Gateway LAX project”) along Century Boulevard. Regency stated that the palm trees caused an obstruction/loss of visibility to four of its billboards (the “Billboards”) and therefore it was unable to rent these Billboards.)

(this means the sword cuts both ways. SPH can not only tell you what you're worth, but also tell you what you're not worth.)

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SPH helped its clients win the largest good will award in California, the 2nd largest good will award in California as well as the 3rd and 4th largest awards.

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In a recent matter where SP&H was retained to value a metal distributorship, the opposing expert valued the whole business at about $95 million. SP&H valued the same business at $9 million (It really cuts both ways). The judge determined that SPH's Nevin Sanli's opinion was the correct number for the business

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Chrysler Realty Corporation recently claimed that it lost $9,400,000 in goodwill as a result of the City of Los Angeles (the “City”) condemning a vacant property upon which it was going to build an automobile dealership. The City hired SPH to:

1.) Analyze whether Chrysler’s ownership of the Subject Property could constitute a business interest;
2.) Provide expert witness analysis to determine whether Chrysler suffered any economic damages or loss of goodwill value as a result of the loss of the Subject Property; and
3.) Determine whether Chrysler engaged in reasonable efforts to mitigate its damages, if any, and/or preserve its goodwill, if any.

SP&H assembled a team consisting of Nevin Sanli, ASA and an experienced analyst. The SP&H team worked diligently and efficiently and Chrysler’s attempt to claim $10,000,000 (and later $9,000,000), an amount that would have significantly impacted the City’s budget, failed.

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SP&H Principals: http://www.sphvalue.com/people.html

SP&H Clients: http://www.sphvalue.com/pdf/fairness.pdf

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4. Today we'll make a call to Nevin Sanli, CEO of Sanli, Pastore & Hill to get additional details.

We'll place a call into the SPH offices today. As you can see from the clips above, this is truly an amazing firm with incredible capabilities.

We'll report back on what we find.

It's important to understand that entertainment companies like Platinum Studios which are building assets (library), are typically not generating sales or earnings which contribute to traditional valuation base metrics. This can make investment decisions more challenging.

At the end of the day, we liked Platinum Studios before the appearance of this report, so we like them even more today. Much more.

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Disclaimer: PDOS, Platinum Studios Safe Harbor Statement, Matters
discussed in this press release contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. When
used in this press release, the words "anticipate," "believe," "estimate,"
"may," "intend," "expect" and similar expressions identify such
forward-looking statements. Although expected, actual results, performance
or achievements could differ materially from those contemplated, expressed
or implied by the forward-looking statements contained herein. These
forward-looking statements are based largely on the expectation of
Platinum Studios and are subject to a number of risks and uncertainties.
These include, but are not limited to, risks and uncertainties associated
with: the impact of economic, competitive and other factors affecting
Platinum Studios and its operations; its markets, products, and
distributor performance, the impact on the national and local economies
resulting from terrorist actions, and U.S. actions subsequently, and other
factors detailed in reports filed by Platinum Studios with the SEC.
Client, we were compensated with ten thousand dollars and three hundred
thousand restricted shares.
NXCN: This release contains statements that constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E the Securities Exchange Act of 1934, as
amended. These statements appear in a number of places in this release and
include all statements that are not statements of historical fact
regarding the intent, belief or current expectations of the Company, its
directors or its officers with respect to, among other things: (i) the
Company's financing plans; (ii) trends affecting the Company's financial
condition or results of operations; (iii) the Company's growth strategy
and operating strategy; and (iv) the declaration and payment of dividends.
The words "may," "would," "will," "expect," "estimate," "anticipate,"
"believe," "intend," and similar expressions and variations thereof are
intended to identify forward-looking statements. Investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, many of which are beyond
the Company's ability to control, and that actual results may differ
materially from those projected in the forward-looking statements as a
result of various factors. Client we have been retained by the company for
one million pre-split shares and ten thousand dollars.
OTC Bulletin Board have factors which create an
uncertainty about the their ability to continue as a going concern. These
concerns are typically related to financing (or lack of), competitive
environments, lack of operating history and operating at loss levels which
is typical of most start-ups.
These statement can usually be found in their most recent 10Q filings and
typically you don't have to dig to far down past the financial tables. We
like to use http://www.pinksheets.com for quick and easy access to SEC
filings. We think it would be wise for most investors to assume that all
companies listed on the OTC Bulletin Board (and many on NASDAQ) have going
concern issues.
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