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Friday, November 30, 2012

HHSE Corporate Structure is not confusing... unless you want it to be!!

Okay, so the new "alternate reality" of the day from the infamous "say anything you want I-Hub" board is an intentional refusal to read our filings in order to create the false impression of some corporate errors with Hannover House.  As a courtesy for those who can read and comprehend, we will recap what is clearly filed with the OTC Markets, and which is readily accessible through the respective Business Portals of the Arkansas and Wyoming Secretaries of State.

The structure is simple to follow, and clearly explained in OTC filings.  The operating entity is Truman Press, Inc., d/b/a "Hannover House" which merged into (and became a wholly owned entity of) a Wyoming-domiciled, publicly traded company in December, 2009.  The 100% owner of Truman Press, Inc. is this Wyoming entity, which at the time of the acquisition was known as "Target Development Group, Inc."  In February, 2012, to avoid confusion with other companies named "Target" -- as well as to streamline the identification of our company stock for prospective shareholders that might have seen our videos in retail stores nationwide -- the Wyoming entity was renamed as "Hannover House, Inc."

"HANNOVER HOUSE" has always been the d/b/a ("doing business as") releasing label of Truman Press, Inc. Truman Press, Inc. was originally organized as a California corporation (from 1993 through 2008).  In 2008, Truman Press, Inc. was redomiciled and registered as an ARKANSAS corporation -- where the offices were essentially operating from.

So there are two corporate entities:  the operating company (Truman Press, Inc.), registered in Arkansas (in good standing) and doing all the day-to-day work activities... and the "parent company" (Hannover House, Inc.), registered in Wyoming (in good standing) and owning 100% of the stock of Truman Press, Inc.   Bank accounts, office leases and day-to-day business activities are handled by the Arkansas entity -- the stock for which happens to be 100% owned by the publicly traded Wyoming entity, Hannover House, Inc. (symbol: HHSE). 

There is no "privately owned" company venture for HHSE principals Parkinson and Shefte.  Truman Press, Inc., d/b/a "Hannover House" was 100% acquired by TDGI in the merger agreement.  It's all in the OTC filings.  Anybody that doesn't understand this, doesn't want to.


It appears that the I-Hub poster is hoping to create confusion due to an entity that was opened -- and promptly closed -- back in 2004.  Eight years ago, the Governor of Arkansas was a gentleman named Mike Huckabee, and the Film Commissioner was name Joe Glass.  Truman Press, Inc., d/b/a "Hannover House" President Eric Parkinson was contacted by Mr. Glass from the Arkansas Film Office with the good news of an impending "State Film Incentive" program, for eligible, Arkansas-domiciled entities.  As structured, this Film Incentive program would have created a 25% to 30% benefit for a very broad range of activities relating to the business activities of "Hannover House."  For instance, as worded, even the manufacturing and production of DVDs would have been eligible for this significant State rebate, provided that certain qualifying conditions were met.  Other states with film incentive programs have carefully structured their legislation to be strictly limited to apply only to new film "production" activities... and not worded as broadly as the Arkansas plan was, that covered general administration, distribution and the manufacturing of home entertainment products.  So this pending incentive act looked like a very promising opportunity.  Accordingly, and at the advice of counsel, a new corporation was filed with the State of Arkansas in order to be eligible for this prospective financing source. The name of the entity formed in 2004 was "Hannover House, Inc."  However, as often happens in politically contentious state houses, the bill ultimately did not pass into law, so the hoped-for incentives windfall was not to be obtained.  The newly formed Arkansas entity ("Hannover House, Inc.") was never operational.  It was allowed to be "revoked" rather than "dissolved" since both have the same defacto result, but have significantly different costs and filing requirements.  The opened (and closed) 2004 entity, "Hannover House, Inc." exists only in the archives of the Arkansas Secretary of State's office.  Yes, it has the same name as the publicly traded, Wyoming entity that was formerly known as Target Development Group, Inc.  But it does not otherwise exist. 

Unlike most Pinksheet companies, "Hannover House" has been operating for a very long time.  In fact, we're into our 20th year!  In ALL of that time, the operating company has always been -- and continues to be to this day -- Truman Press, Inc., d/b/a "Hannover House."  It's a wholly owned division of the Wyoming corporation, and to make it easier to identify who we are, the Wyoming corporation was renamed "Hannover House, Inc."  There is only ONE operating entity called Hannover House, Inc.   It's the public company with stock trading as HHSE.  I hope that this clarifies what looks to have been "intentional" confusion!

Finally! HHSE Blu-Ray Titles at Wal-Mart!

At long last, we received today our first Purchase Order for direct placement of a Hannover House "Blu-Ray" format video into Wal-Mart Stores nationwide.  Watch for TOYS IN THE ATTIC to appear in the Blu-Ray Modular beginning February 5, 2013.  The Wal-Mart "Everyday Low Price" will be only $12.96, which is a significant discount off the title's $19.95 suggested retail list price.  While we are not allowed to discuss unit quantities, we can say that the initial order quantity is more than all of the Blu-Ray units sold across our entire line for the past 12-months!  It's a very exciting development -- especially knowing that Wal-Mart is committed to promoting the Blu-Ray format for 2013 and beyond (they even offered a $38 Blu-Ray player on Black Friday!).  Yoo-Hoo!!  For the record, the Hannover House theatrical release "TWELVE" was also sold on Blu-Ray at Wal-Mart, but not under the Hannover House (direct label); it was released by 20th Century Fox Home Entertainment.

Thursday, November 29, 2012

What's going on with all the absurd I-Hub nonsense?

As stated previously, Hannover House has aspirations for eventually having our shares traded on a "higher" exchange than the OTC-Markets Pinksheets.  In fact, we're told that as a half-step, we'll be automatically elevated a half-step (so to speak) to the OTC-QB simply by posting our financials to Edgar.  But we'd like to shoot for higher, not to disrespect the QB or even the QX.  We'd like to be traded on the BB or higher in part to squelch a lot of the "beyond-bizarre" silliness that sometimes passes for I-Hub posts. 

What's the reason that someone would ignore all facts in order to say that we're not REALLY an entertainment distributor, but are, instead a "Coffee House"?? Can anyone give even a half-ounce of credibility to an anonymous basher who is so obviously delusional that they would make such a claim?  How many shareholders have visited our offices and warehouse over the years, including our receptions held here?  We don't even have a decent coffee maker!  And all this perpetual "sky is falling" nonsense and the vague promises that these idiots "know" something that no one else knows, and "oohhh boy... if you knew then you'd go running, believe me" and "of coarse"  (bozo's cannot even SPELL properly, let alone think clearly).  Look back at the basher posts from more than a year ago, promising imminent demise in the next few days and weeks.  Really??  So if these bashers really think they know something, then why can't they come right out with it!?

The truth is, Hannover House has disclosed all our activities, including the ugly matters of litigation and the potential threats that these could have for the company.  Read the filings.  It's all there, warts and all.  We stand behind our company and filings, and do not hide in the dark like anonymous little basher-boys. 

Fact is, we got into a deep hole 2-years ago with "TWELVE." Bedrock Ventures insisted that we acquire this expensive title and insisted that we go deep into debt to release it, because they had a financing obligation to the company to cover most of these costs.  But they defaulted on the payments to Hannover House, leaving us with the debts.  This has all been disclosed, as have the various creditor and litigation issues that arose from this ill-advised venture. 

So what has the company done about it? First of all, we stopped spending big money on acquisitions, and we stopped spending big money on theatrical P&A.  We refocused the company on direct-to-video titles, and it's proven to be a great cash flow business.  As for Bedrock, Hannover was willing to walk away and write it off as another one of Bedrock's breached ventures, but now we are forced to respond and to fight.  They want back the $500,000 from "Twelve?"  Okay, we're going to fight for the $1-mm that was not funded under the Investment Banking agreement. But we're not going to fight the case on a blog site or I-Hub Board.  Yes, "MeanMe" is an appropriate I-Hub screenname selected by Fotis... but why would he want to bash our stock on I-Hub?

Suddenly, there's a group of "new" names posting to I-Hub / HHSE and inventing anything they can think of to bash our stock and our officers.  Besides Fotis / MeanMe, apparently, "pdgood" has some history with an Arkansas individual that he wants you to think is associated with HHSE.  I guess his contact is not considered a  good guy?  In this bizarro logic, the HH officers and employees are now responsible for anything and everything that happens to all other people that live in the State of Arkansas (population 2.5-million+)??  So if that's the logic, why isn't he writing about the important and successful people our managers really DO have contact and activities with, such as the WALTON and TYSON families among others?  Because all he's spewing is baloney, and it's designed to try to scare low-information traders away from the stock.  But these guys will not win. 

The success of Hannover House is our core business as a growing entertainment distributor -- which activity is unaffected by an artificially depressed PPS.  It's like trying to hold a rubber inner-tube underwater.  At some point, I-Hub readers will learn to completely ignore their anonymous and baseless spewings, and the natural PPS value will be restored.  Hannover House will help it too.  We will meet the uplist requirements very quickly (including the two-years of HT audits), we will fight the Bedrock case, and we will continue to place more-and-more high-margin video releases into retailers such as Wal-Mart, Redbox, and Blockbuster.  Longer-term, we're pursuing high-end titles but without the high-end cost to HHSE (such as arranging $12-mm in off-balance sheet / non-recourse financing for MOTHER GOOSE).

Will it be an easy journey?  Not likely, but far from difficult. We have to make tough management decisions daily to decide how-much of our cash flow to invest in new activities, and how much to use for debt management.  Sometimes we get it wrong, and an impatient creditor files a lawsuit... so we deal those situations as they occur.  But there has to be a balance between using all cash flow for old debt, or using all of the cash flow to generate new sales and growth (and ignoring the old debt).  Shareholders generally want earnings, and this requires new activities.  But they also don't want to see lawsuits.  It's also been communicated to us that paying off aged and impatient debts with "debt conversion" transactions (i.e., issuing new shares), is also an unpopular strategy among shareholders.  So there's always a probability that someone is not going to be 100% happy with whatever decisions are made by HHSE managers.

But through it all, we are open, accessible and we communicate with shareholders.  We are probably among the most accessible public-company managers out there.  We take shareholder calls, we respond to shareholder emails, and we tell it like-it-is.  Even when it's not that pretty.

The bashers wish that we had some dark and scary secrets, but we don't.  The only secret is who are they and what is their agenda?  Call them out on it.  Tell them to stand up for what they do and say... certainly Parkinson and Shefte do not hide in the dark.  But most of all, don't let them kick your asses by stealing from you.  Bashing our stock with false claims, innuendos and the perpetual "sky is falling" routine is no better than a criminal on the street stealing your wallet.  At some point (soon), the political powers-that-be in D.C. are going to pass sweeping reforms to stop all forms of stock manipulation and baseless bashing.  Sooner than you can imagine.  Meanwhile, Hannover is implementing our own response.

More success at Wal-Mart for HHSE

Friends -- we've had a great year with placement of DVDs into Wal-Mart stores.  Recently, the success with the budget-bin-repricing of "BOGGY CREEK" (Halloween promotion) was very strong, and we were invited to present new titles.  Accordingly, there is a commitment for five new budget-priced titles from Hannover House, beginning with the January 15 release of "The Unexpendable Collection" (previously planned by HH for release in August, but hey, you take the space when it's available!).  Budget-bin titles at Wal-Mart can sometimes be hit-or-miss, with sales ranging from 10,000 units to (literally) 1-MILLION units.  The best-selling Budget-Bin title for Hannover House has been "OXYGEN" starring Adrien Brody, which sold a cumulative 678,000 units over a 32 week life in the Wal-Mart bin!  Fingers crossed for our new line up!!

Monday, November 19, 2012

Zombies are unstoppable... a genre' that just won't die... sort of like, uh, Zombies??!?  Anyway, watch next Spring for a new Zombie thriller from Hannover House... just in time to complement the Paramount mega-event / Brad Pitt thriller "World War Z."  Coming soon:  "Zombie Warz: Falls the Shadow"

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Friday, November 16, 2012

Greetings HHSE Friends, Fans & Shareholders.  This is a TEST Posting of our new HHSE Investor Relations Blog.  It will soon be posted a link directly from the Hannoverhouse.com website.

Here's some new artwork / layout for the upcoming Hannover House re-release of Tony Scott's AMERICAN FIGHTER PILOT.  We are checking to see how these graphics appear on the test posting.  Cheers!