Dear HHSE Friends and Shareholders - The coming week is poised to be historic in stature for Hannover House, in that we are approaching completion of long-delayed corporate governance and operational matters.
1). AUDITS -- The Company took so long to get our supporting materials together that we ended up moving the audit year periods to 2011 and 2012 (instead of 2010 as the first year). This is good for several reasons. First of all, it's the "two most current" years, which is a customary Edgar filing requirement. Secondly, it answers some of the concerns previously posed about having the "starting point" for the 2010 audit being the vague numbers provided to Hannover House from the company's prior management covering 2009 and earlier years. Finally, having the audits for 2011 and 2012 covers the periods during which our payables tracking (and account assignments) have been in place. We're handing this all off to the auditors on Friday, and will encourage them to move expeditiously in their review.
2). REGISTRATION WITH EDGAR / S.E.C. -- We have completed a Form 10 Registration for the Company's stock, but not yet filed with the S.E.C. due to conflicting information about eligibility for filing prior to audits. Company has engaged a securities attorney to review our Form 10 and advise if we are eligible to proceed with the filing now (sans audits). The S.E.C. Edgar Filing Department has been helpful and receptive, but cannot substitute for the advice we are seeking from independent securities counsel. If we are advised by counsel to file this week, we will do so and will post an update to our shareholders in this matter.
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With respect to the above two "critical issues," both Parkinson and Shefte offer shareholders a sincere apology for the delays in completing these matters. There simply has not been "enough hours in every day" to get our core distribution duties addressed, and still leave the hours of time required to address tedious corporate governance issues. The back-up history of sales and costs for library titles was not in an audit-friendly format (i.e., cases of old records in deep storage to retrieve and sort-through), and the Edgar reporting issues proved too complex to attempt without securities counsel's help (so this has now risen to a priority cash issue). It's been no secret that the Company has been instantly reinvesting / reallocating cash flow revenues for operations, new releases and debt management... leaving little crumbs for "unusual" expenses such as the advice of outside securities counsel. But we're sucking-it-up and getting it done - both the daily commitments AND the long-term corporate issues - for the sake of all shareholders.
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3). MULTI-STUDIO DISTRIBUTION PACT -- We have discussed in prior disclosures and blogs that the Company is structuring an exciting "multi-studio" distribution pact. To meet late Summer / early Fall release slots, a major effort is underway to conclude this structure within the next two weeks (if it's going to happen); while Hannover House is happy with our current distribution conduit structures (both direct and through two-step wholesalers), we feel that the new structure as proposed could result in a 2X or greater improvement in overall sales... so it's absolutely been a major priority of the management time invested.
4). NEW ACQUISITIONS -- Lots of activities in this arena for new films and titles for home video and VOD release. As and when announcements of these new title acquisitions are approved by the licensors, these will be posted.
Parkinson and Shefte are committed to conmpleting the corporate governance items, and will work diligently to restore the support of shareholders.