Note that there was no suggestion in the HitsGalore.com press release that the Amrhein Foley Group was actually going to contribute money at all. Rather, they were going to assist HITT with the process of raising capital, in two traunches, for unspecified amounts of compensation.
It would not be reasonable on that basis to expect AFG to be of significant substance themselves. They would, instead, be people who knew the people who had money. Also, it appears that AFG would be using some of the proceeds of the money raised (about $750,000 according to the press release) for initial work on the production of financial advisory information -- presumably videos, since the term "studios" was used.
This certainly has a familiar ring to it. One of the Peter Foley's in question, specifically the chauffeur for Mrs. Lear, was to help her in production, from studios (wasn't that also CA?), for financial advisory videos.
It would be interesting to learn what AFG's compensation would be from that ongoing business, and the production to set it up. HITT stockholders may be concerned about the nature of what is suggested to be a joint venture, which HITT is clearly going to fund (to the extent that anything is clear in the press release).
Reasonable questions to ask (of the 8k, perhaps?):
- Is the transaction truly arms-length?
- What is the nature of the fund raising effort?
- Does AFG advertise in any fashion for web/studio work?
- What is their business address/phone number, etc?
- Do they now have the T3 necessary for video streaming?
- What is AFG's compensation for the production/web work?
- Is the cost for production/web work reasonable?
- Does AFG have a successful track record in this arena?
- What is AFG's compensation for raising the capital?
- Does AFG have an ongoing JV participation?
- If they do, do they have any "skin" in the game?
- Are there any other transactions with AFG principals?
- What happened to Solvere's much touted ability here?
Further, is it reasonable that the same company that is well suited to raise cash by private placement is also well suited to do video and web production, and to do a financial advisory service? This company would have an interesting resum‚, neh?
It is possible, and in fact I know personally of a company that would fit the above description -- but that entity would not deal with HITT under the current cloud of suspicion. AFG is apparently not, ah, squeamish, or at least not too picky.
I also note with amusement that, in spite of the LFT receivable, which should be the source of low-cost bank financing for HITT as a bridge loan until April, that they are resorting to a high-effort fund raising process that I would wager is an order of magnitude more expensive.
Further, Mr. Reed indicates that this is a great deal for HITT (with the right strategic partnership, it could be) and that he intends to go on raising this sort of cash. Curious also that the phrasing suggests that fund-raising of this type, rather than revenue production, is the best and highest use of HITT's time. Not their words, of course, but a reasonable read of the release wording.
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