Hansen Gray and Company, Inc. (HGCP)

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From: Hanson Gray & Co. <info@summit-media-mailer.net >
Date: 23-May-2006 10:25
Subject: HGCP Investment Alert

Consumer spending on poker has skyrocketed. In Nevada and New Jersey - the only states that track poker revenue - Americans spent $151.7 million on organized poker in 2004, a whopping 45% increase over 2003 . Nearly 1 in 5 American adults (19%) who played poker indicated they had started playing in the past year or two, a testament to the recent strength of the poker phenomenon.   LAS VEGAS, May 22 /PRNewswire-FirstCall/ -- The NAPP Tour has announced that the inaugural tour stop slated for May 8-19, 2006 in Hollywood Park, CA will be rescheduled for September 11-21, 2006. The series of international tournaments with a guaranteed $2M prize pool will feature the best of the best in the poker world. The tournament was rescheduled to eliminate a 3-month break between the inaugural event and the remainder of the tour calendar. "In evaluating the best interest of the players and the tour it was determined that the tour should run as a continuous and smooth season and not be scheduled around the World Series of Poker," comments NAPP Tour COO & President, Wade Mezey. With its high-stakes competition, national reach, and the commitment of over 50 of the world's best players, the NAPP Tour will launch in September 2006 as the first professional, standardized poker tour, with a limited number of qualified competitors in each of its main events building up toward a multi-million dollar championship. The NAPP Tour has recruited such first- rate championship players as Annie Duke, Antonio Esfandiari, Phil Laak, Mike Matusow, and Layne Flack, among dozens of other top players. NAPP Tour, Inc., a wholly owned subsidiary of Hansen Gray & Company, Inc. (OTC: HGCP - News ), is an event management and television production company that promotes, manages, hosts and televises the NPA Tour's professional poker tournaments. The NPA Tour is a global membership organization of professional poker players. This mission of the NPA Tour is to increase financial benefits to its players while maintaining its commitment to the integrity of the game.   Hansen Gray and Company, Inc. About Hansen Gray & Co., Inc. Hansen Gray and Company, Inc. ( OTC PK : HGCP) is a strategic venture capital firm that acquires or invests in companies, which through growth or acquisition, have the potential to become leaders in their respective markets. The strategic investments in Hansen Gray & Company's portfolio include iCurie, Inc., (OTC BB: ICUR), a full solution provider in the field of thermal heat management for the PC, consumer electronics, communication and display industries and NAPP Tour, Inc., an event management and television production company that promotes, manages, hosts and televises national professional poker tournaments under the concepts North American Poker Tour™ and International Poker Association™. THE COMPANY Hansen Gray & Company's (OTC PK: HGCP) is an investment holding company whose investment model reflects a deep-seated belief that value is created by focusing on a few key fundamentals. These among others, include solid management, operational excellence, a sound, long-term investment plan and optimal capital structures.   The company has successfully employed capital through a wide range of economic situations and has delivered to shareholders capital appreciation by generating returns that has little or no correlation to the capital markets or lending rates – achieving outstanding returns on large amounts of capital invested. At present, the company has 2 main investment holdings that give shareholders exposure to nanotechnology derived cooling solutions for the PC, personal communications and display industries (iCurie Inc.) and gaming (NAPP Tour Inc.).   On July 8, 2005, all the shareholders of iCurie Lab Holdings Limited, a United Kingdom corporation (iCurie UK), transferred their shares in iCurie UK to iCurie, Inc. (iCurie US), an over-the-counter bulletin board company formerly known as Cedar Mountain Distributors, Inc. (OTC BB: CMTD), through a share exchange. Prior to this acquisition, Cedar Mountain Distributors, Inc. had no material business operations. On July 11, 2005 , iCurie US closed a $17 million private placement with a number of institutional investors and business leaders participating in the private offering. Following these transactions, Hansen Gray & Company, Inc. (HGCP) received 8.62 million common shares of iCurie US in exchange for its ownership interest in iCurie UK . On May 18, 2005 , Hansen Gray and iCurie UK executed a revenue sharing agreement which grants to Hansen Gray the right to receive 0.86% of iCurie UK 's gross revenue after iCurie UK 's aggregate gross revenue exceeds $25 million. The revenue sharing agreement is effective until Hansen Gray receives a total of $21.5 million.   Based on figures obtained in an 8-K filing of iCurie at the time of this share transfer transaction, the fully diluted percentage holding of iCurie Inc., by Hansen Gray & Co. stood at approximately 13.2%. HGCP also holds a 100% stake in NAPP Tour Inc.     INVESTMENT MODEL   Hansen Gray & Company acquires or invests in emerging growth companies with exceptional future potential.   Specifically, HG portfolio companies should have the potential, through either organic growth and/or acquisition, to become leaders in their market. The company has investment criteria and seeks certain characteristics when looking at investment candidates. Firstly they place a high value on companies that is able to deliver sustainable growth . Secondly, they also seek to lower their investment risk by striving to uncover businesses that deliver quality or innovation in the value chain , as opposed to competing solely on price. Finally, Hansen Gray believes in backing management teams with vision. This could be a company that is very much in the right place at the right time! HANSEN GRAY & COMPANY, INC.    US-OTC Pink Sheets HGCP •  Hollywood Park-Casino will host the inaugural tournament of the NAPP Tour's 2006-2007 season and will take place May 8th - 19 th , featuring a number of events culminating with a guaranteed $2 million Prize Pool No-Limit Hold-em Championship Event. •  According to the Vancouver-based Pokerpulse's estimates, more than $190 million is bet in online poker games every day , up from $11 million two years ago . •  Consumer spending on poker has skyrocketed. In Nevada and New Jersey - the only states that track poker revenue - Am eric ans spent $151.7 million on organized poker in 2004, a whopping 45% increase over 2003 . Nearly 1 in 5 Am eric an adults (19%) who played poker indicated they had started playing in the past year or two, a testament to the recent strength of the poker phenomenon. •  NAPT expects television revenues to be $26.9 million in 2006 or $840,840 per Show. NAPT also hired Bortz Media and Sports Group, Inc . to represent NAPT in negotiating its television deal which may be finalized in early Q2 2006 . •  HGCP owns 8.62 million common shares of iCurie Inc. and executed a revenue sharing agreement which grants to Hansen Gray the right to receive 0.86% of iCurie UK 's gross revenue after iCurie UK 's aggregate gross revenue exceeds $25 million . The revenue sharing agreement is effective until Hansen Gray receives a total of $21.5 million. •  The immediate market opportunity for ICUR is substantial. The PC cooling industry is estimated today at more than $1 billion. •  HGCP shares appear attractive using our valuation methodology after stripping out its stake in iCurie Inc. (worth over $7.5 million). It follows that the HGCP stock price assigns a market value of only $7 million to the NAPT business, which is very conservative. We forecast FY 2006 Revenues of $26.9 million (for the NAPT business) and a minimum after tax profit of $1.87 million in FY 2007, which we anticipate will lead to a higher rating of HGCP. European Online Gaming IPOs have been priced at 11.5x EBITDA. A similar valuation could translate in market capitalization for HGCP of close to $30 million ($1.1 per share) including the iCurie holding of $7.6 million. See INVESTMENT THESIS & RECOMMENDATION for more in-depth discussion (Page 10-12). Hansen Gray & Co., Inc. ( HGCP.PK) Investment Highlights   FortuneMarket.net Announces Profile of Hansen Gray and Company as Featured Company PR Newswire (Fri 9:07am)   Hansen Gray Seeks Permanent Injunction and Damages From Mark Gray for Fraud and Illegal Sales of Company Stock PR Newswire (Fri, May 12)   Hansen Gray & Company Recruits Top Professional Players for Upcoming North American Poker Tour Event PR Newswire (Wed, Apr 5)   Card Player Publisher Barry Shulman Predicts Great Success for Hansen Gray & Company's Subsidiary North American Poker Tour PR Newswire (Mon, Mar 27)   Hansen Gray & Company's Subsidiary North American Poker Tour Adds Seneca Niagara Casino & Hotel to 2006-2007 Tournament Schedule PR Newswire (Thu, Mar 23)   Hansen Gray and Company, Inc. Receives Strong Upgrade by Respected Research Firm PR Newswire (Mon, Mar 20)   Hansen Gray & Company Subsidiary North American Poker Tour(TM) Announce Hollywood Park Open Rock-n-Jock Media Tournament PR Newswire (Fri, Mar 17)   Hansen Gray & Company Subsidiary NAPP Tour, Inc. Sponsors VH1 Classic Rock-N-Roll Charity Poker Tournament PR Newswire (Thu, Mar 16)   Hansen Gray & Company Subsidiary NAPP Tour, Inc. Recruits Top Rated Championship Players for Its Tour Events PR Newswire (Wed, Mar 15)   Hansen Gray & Company Subsidiary NAPPTour, Inc. Engages B|W|R Public Relations for the North American Poker Tour(TM) PR Newswire (Thu, Mar 9)   Symbol HGCP.PK Stock Price $0.26 52 Week Range $0.13 - $0.69 Average Daily Volume 116,903 Basic Shares Outstanding 14.6 m Market Capitalization 27.0 m      Summit Entertainment Group · 14435 FM 2920 · Tombal, TX 77377