Shares of common stock in Harmony Holdings, Inc. (HAHO), were removed from the NASDAQ SmallCap Market on Feb. 9 and are now being traded on the OTC Bulletin Board, which is run and operated by NASDAQ. Quartered in Minneapolis and Los Angeles, HAHO is a publicly held parent company with holdings in the commercial production house business.
At press time, SHOOT had not connected with Christopher T. Dahl, HAHOs CEO and chairman. Dahl is also chairman/ CEO of Minneapolis-based Childrens Broadcasting Corp. (CBC), which owns 49.7% of HAHO. In a released statement, Dahl explained that the change in stock market status is the result of the company [HAHO] falling below the net tangible asset threshold required to remain listed on the NASDAQ SmallCap market. This, he continued, was because of the negative financial impact that since-closed subsidiary Harmony Pictures had on HAHO. Back in November (SHOOT, 12/4/98, p. 1), HAHO announced that it was shutting down Harmony Pictures-which briefly was doing business under the Chemistry moniker (SHOOT, 10/9/98, p. 1)-due to significant losses, including $595,000 in the quarter ending Sept. 30, 1998.
Dahls statement went on to contend that HAHO is much stronger today because of Harmony Pictures closure. We also believe the company [HAHO] is in an excellent position to grow the remaining divisions and build on their operating income. Dahl added that CBC has provided the financial support necessary to bring the company [HAHO] back to a level of stability and growth. The company is currently exploring its options as to whether it will appeal the [NASDAQ] decision or ask for a rehearing on this matter.
As earlier reported, HAHOs other commercial production house holdings-bicoastal/international The End and bicoastal Curious Pictures-have proven profitable. And if not for Harmony Pictures poor performance, HAHO-on the strength of The End and Curious-would have turned a bottom-line profit in the aforementioned quarter that ended Sept. 30, 98; but instead, with Harmony Pictures figured into that quarterly tally, HAHO incurred a loss in excess of $500,000 on some $17.3 million in revenue.
Branching Out
In recent months, CBC has shifted its core business from radio stations and programming to spot and long-form production. And the companys commercial production interests arent confined to HAHO. Several months ago, CBC went outside HAHO to bankroll a new spot venture, Populuxe Pictures, New York, headed by exec. producer William K. Near (SHOOT, 11/13/98, p. 1).
Despite the change in HAHOs NASDAQ status, CBC remains a well-capitalized firm, having recently sold its radio station holdings for around $71 million. At one point, it appeared that CBC would benefit from another significant infusion of capital when a St. Paul, Minn., federal district court jury awarded the company $40 million in damages from Walt Disney Co. and ABC. In its lawsuit, CBC claimed that the Radio Disney childrens network was launched based on CBC childrens radio network info and trade secrets that were allegedly accessed illegally by Disney and ABC through ABC Radio, which had a business relationship with CBC. But a federal judge has since overturned the jurys monetary verdict.
