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Friday, March 22, 2013

So what happened? Why no updates?

Good afternoon HHSE friends & shareholders -- we have received a lot of emails this past week asking about a variety of issues, from the year-end filings to sales updates.  HH CEO (Eric Parkinson) and Presidnt (Fred Shefte) have been even busier than normal, pursuing major new ventures for growth, while also structuring cash-strategies to deal with key debt issues.  An update is merited.

1).  Year End and Q4 Filings -- While originally planned for March 15, the company elected to wait until closer to the actual due date of April 1st, to allow for greater analysis of strategic decisions impacting the financials.  For instance, with a significantly positive and profitable year, the opportunity to write-down or reserve for certain matters may be beneficially times;  Additionally, with a multi-studio distribution pact now being assembled, the need to update the library to include titles acquired over the past two years has become more urgent.  Accordingly, these extra days since March 15 have been utilized to best strengthen and adjust the company's balance sheet and title listings for the coming quarters and years.

2).  Domestic (North American) Distribution Pacts -- Hannover is spearheading a venture to combine sales activities among three additional, independent studios;  the goal is to increase the market presence and strength of the combined product slates, and at the same time, save on field sales and fulfillment costs.  The company hopes to have this venture and structure finalized by mid-April, and ready for a major announcement.  This venture, however, does not impact the company's equity / stock structure, as it's an operational venture to improve sales volume and reduce sales costs.

3).  Production Financing / International / New Titles -- Further to the company's releasing strategy, there will be new (high-profile) productions ready to announce at the Cannes Film Festival in mid-May.  These titles are all being funded through third-party ventures (i.e., private equity and pre-sales combined with tax benefits). As such, Hannover House is not investing or risking capital; but will benefit as the distributor and sales agency for rights.  The structuring of the deals for these new productions has been very time-consuming for both Parkinson and Shefte over the past several weeks, but necessary, due to the imminent announcements and commencement of pre-sales planned for the Cannes Festival.

... will update more early next week...