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Sunday, September 24, 2017

General Update - Sunday, Sept. 24

Greetings HHSE Friends & Followers - quick update for the coming week.

1).  DAISY WINTERS Media Day is this Tuesday in New York. Response from major media has been quite good. There will be a detailed blog recap on Tuesday night including stills.

2).  BATTLECREEK response to last week's new release announcement has been superb. The rising star stature of our leading man (#1 IMDB Star!) has motivated media and theatres like we've neve before experienced.

3).  CRIMSON FOREST Update - this is their final week. If we are unable to receive the needed historic back-ups required by our more thorough audit requirements, we will have to proceed with HHSE as the audited entity. Due to new reporting activities implemented in 2015 for audit compliance, it is easy now for HHSE to promptly satisfy all audit practices and supporting documentation.

4).  "DEFAULT" JUDGMENTS - some shareholders have asked about two old "foreign default" judgment cases - and the company's strategy to address these. Firstly, as evidenced by our succcessful total "freeze" of collections activities by TCA GLOBAL last year, the laws of the State of Arkansas allow for "foreign default" judgments to be contested and defended. TCA was an actual, true obligation:  HHSE had borrowed money and paid it back in full... but TCA was pressing for usurious interest and unearned fees. Still, because it was a default from another state, HHSE attorneys were able to completely stop collection-enforcement activities, and ultimately force a fair and reasonable settlement. In the cases of both BEDROCK and INTERSTAR, there is no legitimate basis to their claims - so setting these aside should be even simpler. BEDROCK clearly committed fraud by failing to provide HHSE with the required $1.5-mm in funding; it was quite bold of Bedrock to sue to be repaid the partial amount that they DID finance ($500,000), because Bedrock received 200-MILLION shares of HHSE stock (then known as TDGI) in consideration. To sue us for repayment of proceeds which were only a partial payment against the total stock purchase and investment transaction opens up a variety of remedies against Bedrock and its principals (including stock and criminal charges). Now that Bedrock has moved this fraudulrnyly obtained foreign judgment into Arkansas, our attorneys will move swiftly to freeze collections actions and open up the case for adjudication. In the case of INTERSTAR, there is an actual balance of $27,000 due for royalties of "Dawn of the Living Dead" which we have offered repeatedly to pay. However, Barry Strudwick (an assignee of this matter) filed a false report with the CA courts after getting a default judgment - and misrepresented that the amount due was more than 10-tines the actual, verified obligation. The Arkansas courts have little patience for puffery and malicious invention - as was shown in our victory over a similar "inflated" royalty request by Amityville Asylum earlier this month. Bottom line for these two, easily contested, fraudulent judgments is "bring it on," in the State of Arkansas, as we look forward to removing both claims from our balance sheet.

This is a big week for HHSE. We are positioned for significant wins in publicity, theatrical promotions, corporate structuring and legal adjudications. Sit back and enjoy the ride!

Onward and upward...



Monday, September 11, 2017

GETTING GRACE wins all top four categories at NYC-Metro Film Festival

HHSE Congratulates our good friend, actor-director DANIEL ROEBUCK on your victorious SWEEP of all four top awards this past weekend at the NORTHEAST FILM FESTIVAL (NYC- NJ Metro).  WOW!  What a great way to launch your inspiring movie!  GETTING GRACE... well, I guess they GOT it!!!

AUDIENCE FAVORITE

BEST ACTRESS

BEST DIRECTOR

BEST FEATURE

http://www.nefilmfestival.com/

Congratulations to HHSE star Bill Skarsgård - on your #1 Movie and #1 Star Ranking!

Greetings HHSE Friends & Followers - It doesn't get any better than NUMBER ONE - so it's doubly-exciting today to announce that HHSE star Bill Skarsgård not only has the top movie in the world... but he is also listed on IMDB as the #1 Star in the World.

We are excited to be releasing Bill's next film, "BATTLECREEK" - which opens in theatres on Friday, Nov. 3, from director ALISON EASTWOOD.  Go HHSE!!




Saturday, September 9, 2017

HHSE Update - as of Sept. 9, 2017

Greetings HHSE Friends & Followers - as promised, here is a brief update of key issues.

1).  CRIMSON FOREST  - The principal updates for the corporate merger with Crimson Forest all relate to Audit issues (see below). As previously disclosed in this blog, the ongoing review of Crimson activities indicates that the merger valuations will need to be significantly modified in favor of Hannover House shareholders. Regardless of the valuation levels that can be independently substantiated, the stock-swap portion of the merger cannot occur until Crimson is restored to fully reporting status - as this is a requirement for our planned immediate re-branding (plus, why would HHSE shareholders want CRIM shares - even if only briefly - while Crimson has a STOP sign on their OTC markets page?). 

2).  AUDIT ACTIVITIES UPDATES - New auditors were engaged to handle the Crimson Audits, as are required in order to restore CRIM to fully reporting / current status (which current status triggers the stock-for-stock swap, as well as the immediate re-branding of the newly merged pubcos). The new auditing firm is much larger than the auditors that handled previous Crimson reporting requirements... and the new firm has compliance standards that have been more challenging than the existing back-up from Crimson records of previous years. To address these requirements, two steps have been implemented, including:  


a).  Input of all transaction data into an exportable QB format by an outside accounting firm; and, 

b).  Forensic accounting for back-up of transactions previously expensed or capitalized by Crimson, which need independent review by the new auditors, despite representations of review from the previous auditing firm for Crimson.  

HHSE board members (Parkinson, Shefte and Sims), met last week to discuss time lines and options regarding the merger with Crimson Forest, and the problems that have been encountered relating to obtaining suitable back-up for prior Crimson Forest activities. In respect of the many other deals and activities in motion for the company, the board has determined that Sept. 30 shall be the latest, reasonable date to allow Crimson Forest to comply with the required documentation for the auditors. 

HHSE accounting and audit materials are fully current and properly formatted to enable the HHSE side of the merger to easily and quickly become fully reporting - which may be a reasonable option should Crimson Forest continue to delay in its willingness or ability to provide appropriate and required compliance documentation.

UPDATE - As a further clarification to the above two items concerning Crimson Forest, shareholders have asked for the corporate options for a road-map to achieve fully reporting status, regardless of merger status. Per discussions with HHSE's advisors, as well as the corporate counsel for Crimson Forest, the following options seem to be governing the steps that will occur if Crimson is unable to fully comply with document requirements by Sept. 30.

1).  First Option - Crimson provides required back-up in a timely manner, the auditors complete ongoing report, all "current" Crimson docs are then filed and the merger swap is completed, as per the March agreement (with the valuation adjustments since then).

2).  Second Option - Crimson is unable to provide appropriate back-ups for the auditors, so HHSE files the Form 10 (and two-years of audits, which are already formatted for submission), and HHSE becomes the "fully reporting" entity for which the stock-swap can occur with Crimson (again, under valuation adjustments).

3).  Third Option - Crimson is unable to provide appropriate back-ups for the auditors, but desires to keep working with HHSE for production, distribution and finance matters (but not as a singular, merged company), so the HHSE would proceed (on its own) to become fully reporting for the benefit of HHSE Shareholders and stock liquidity.

4).  Fourth Option - Crimson is unable to provide appropriate back-ups for the auditors, and the two companies seek an orderly dissolution of the merger process, without specific ongoing corporate activities specified. Under this scenario,  HHSE would proceed (on its own) to become fully reporting for the benefit of HHSE Shareholders and stock liquidity.

We have enjoyed  our working relationship with Crimson Forest this past year, and we believe that all parties are working to achieve a positive resolution to our shared, corporate goals. One way (or another), we are graduating off the Pink Sheets as a trading equity, and feel that this corporate maturation will deliver great value to our Shareholders.

3).  VODWIZ - As of 7:00-pm CST (Saturday, Sept. 9), we have not received word back for the release of new partnership news relating to VODWIZ program suppliers... we expected this by today, but will honor the studio's schedule and approval process.

4).  NEW RELEASES - Here's a quick summary of some of the previously unannounced (or delayed) titles that will be driving the majority of revenues for HHSE-Medallion over the next six months:


a).  BLOODFEAST - finally received a "R" rating from the MPAA after three rounds of edits. Accordingly, the title is now eligible for release to the major theatre circuits as well as for Walmart, Redbox and Target home video placement later. New release plans are in motion.

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b).  DAISY WINTERS - formal release announcement on Monday.. this is a big one for HHSE / Medallion. The film tells a powerful and poignant story of love, death and the ironies of life, and features an impressive cast including IWAN RHEON ("Game of Thrones" and "Marvel's Inhumans"), BROOKE SHIELDS ("Suddenly Susan"), CARRIE PRESTON ("True Blood") and a mesmerizing, star-making performance in the title character role by 12-year-old STERLING JERINS ("World War Z", "Conjuring 1 & 2").  Film opens OCT 6 - and will have the largest consumer support campaign in HHSE's history.  Watch for more details next week. National Media Day Sept. 26 (NYC), Red-Carpet Premiere Oct. 5 (NYC).

c).  BATTLECREEK - On the heels of the mega-hit "IT" now setting box office records in theatres, HHSE / Medallion is pleased to announce the Nov. 3 theatrical release of "Battlecreek" from director ALISON EASTWOOD - and starring BILL SKARSGARD ("IT"), DELROY LINDO ("Gone in 60-Seconds"), PAULA MALCOLMSON ("Hunger Games") and CLAIRE VAN DER BOOM ("Hawaii Five-0").  Early enthusiasm from theatres and home video retailers is already quite significant for this title. National Media Day Oct. 24 (LA), Red-Carpet Premiere Nov. 2 (LA).

d).  DEATH HOUSE - Imagine a movie with nearly ALL of the biggest horror film stars from the 1980's and 1990's - all together on Halloween night, in one location, for one incredibly funny and outrageous horror film?  That's DEATH HOUSE, and producer RICK FINKELSTEIN ("Bill & Ted's Bogus Journey") thinks that this new film from director B. HARRISON SMITH ("Camp Dread") will be a huge, sleeper hit release. Coming to theatres on Jan. 26, 2018.

5).  ADDITIONAL VICTORIES / RESOLUTIONS - A separate and detailed blog about recent settlements (or victories) in prior legal matters impacting HHSE / Medallion has been prepared. However, under advice from counsel, and in order to respect the release of information from the courts or the confidentiality of terms, this portion of the blog update is not ready for release as of today, Sat., Sept. 9. 

6).  NEW HHSE STAFF HIRES - We are pleased to announce the return of Desiree Garnier as our Director of Marketing.  Desiree worked with Hannover House / Medallion throughout 2015 and through July of 2016 when she joined the start-up team at Rock Hill Studios (the Fayetteville, AR based motion picture production studio owned by Blake and Kerri Elder).  After a year at Rock Hill - during which time Desiree supervised the construction of the largest sound stage in the State of Arkansas, as well as the production of the horror film, "Door in the Woods" - she has returned to HHSE to help with our impressive slate of theatrical features for the fall and winter seasons.

7).  NEW DISTRIBUTION PARTNERSHIPS - HHSE / Medallion have entered into a distribution agreement with Random Media (the indie studio headed by former Paramount President Eric Doctorow and indie-film producer Tom Skouras). Random will be handling a significant portion of the upcoming release slate for Video-On-Demand placements and Television licensing. Additionally, Random was the catalyst for an exciting new distribution pact with Sony Pictures Home Entertainment, details of which will be announced separately, but which will involve selected titles. HHSE / Medallion will continue to maintain and service the existing distribution relationships with Cinedigm, Vision, All-Channel Films, Entertainment Studios and other key distribution partners.




Friday, September 8, 2017

HHSE Weekly Updates...

Greetings HHSE Friends & Followers - we are preparing an update for this week's acitivities that we plan to post to this blog tomorrow (SATURDAY).  The purpose of posting tomorrow instead of today is to allow two key outside parties time to review and approve the information that concerns them.

FYI, what will be covered will include:

1).  CRIMSON FOREST Merger updates

2).  AUDIT Activities updates

3).  VODWIZ New Activities

4).  NEW RELEASE Activities (Theatrical, HV / VOD / TV).

5).  ADDITIONAL VICTORIES / RESOLUTIONS in old legal matters.

6).  NEW HHSE STAFF HIRES

7).  NEW DISTRIBUTION PARTNERSHIPS update.

What we can go ahead and "tease" today is the MONDAY announcement via Wire Services and EPK.TV of the October 6th release of "DAISY WINTERS."  This is a powerful, awards-caliber feature film that will be supported with HHSE's biggest marketing campaign ever (TV, Print, Internet, Radio and Social Media will deliver more than 350-million consumer impressions!).  Full details will be released on Monday.

HAVE A GREAT WEEKEND!!

Thursday, September 7, 2017

HHSE scores another major legal victory - as we transition into a new era for higher-quality films!

Greetings HHSE Friends & Followers - Hannover House achieved a major legal victory on Wednesday with the ruling in HHSE's favor by the court in the "AMITYVILLE ASYLUM" case. Bottom line is that the producer's claims for "damages" in this contract law dispute were supported with (quote from the presiding judge) "... no credible or reasonable evidence" - and the ruling was made in favor of Hannover House.  The judge further stated that the accounting reports from Hannover House appear to be "very thorough"  and with "third-party verification" of units sold, units returned, monies paid and amounts due.

Although the producers of "AMITYVILLE ASYLUM" were seeking a total of $300,000, the court ruled that all they were entitled to was $12,651 - which is the net balance due on actual, earned royalties.

HHSE had previously offered to settle for a far greater amount than the actual royalties, to avoid the nuisance and distraction of ongoing litigation. But the Amityville producers rejected this lucrative offer in favor of hoping to persuade the court that they had somehow been mistreated. The principal evidence that they submitted to support their claim of "damages" was a statement of "projected earnings" from Alchemy Entertainment, Inc., on four totally different movies. But Alchemy filed bankruptcy and ultimately never paid anything to the Amityville producers - thus rendering the Alchemy valuation forecasts as unreliable.

During testimony received via SKYPE from Wales, Amityville principal Robert Graham admitted under oath that the film was intentionally titled "Amityville Asylum" in hopes of confusing consumers into thinking the film was part of the successful AMITYVILLE HORROR film franchise. This sworn testimony supported Hannover's claim that many retailers refused to carry the title out of their concern for potentially confusing and upsetting their customers. This specific admission under testimony could be used in a trademark claim, should Emmett-Furla Films or MGM (co-owners of the true "Amityville Horror" franchise), decide that this willful infringement merits legal action. But that's not a HHSE matter of concern.

The biggest victory is the court's ruling that the HHSE statements represented an accurate and verifiable history of sales activities for the titles... and how today's victorious result may temper the enthusiasm for future, baseless claims from any other producer of "projected losses" or damages. The HHSE producer reports were accurate to the penny - and fully conformed to the independent third-party back-up.  For a producer to claim that they are owed MORE than the HHSE-generated producer statements, is fundamentally a false assumption and one that will never win over basic math.

HHSE provided a fully accurate statement to "AMITYVILLE."  We tendered the first of four, mutually-agreed installment payments (three payments at $5,000, plus one of $2,751), but before the second payment was released, the Amityville producers filed a lawsuit. Ultimately, three years later, they got exactly what the title was due, period. No punitive damages, speculative or projected earnings...none of that complete nonsense.

In 24-years of operations, Hannover House has been named (often as one of multiple-named parties) in NINE (9) lawsuits from program suppliers, representing a total of 17 films.  This represents an extremely low percentage of unhappy producers (about 3.7%) out of our 451-title film library.  As a point of comparison, the industry's two largest indie studios (LIONSGATE and WEINSTEIN COMPANY) are reported to have producer lawsuits in 10% and 25% (respectively) of all films handled.  This does not mean that any of the companies are doing business in a dishonorable way. It just means that producers almost ALWAYS have very high expectations for how they THINK their movies should perform... and the distributor usually gets the blame, even when a film gets horrible reviews from film critics (how is that the distributor's fault?).

As HHSE grows into the evolving media market for independent films - our new business model of handling HIGHER PROFILE titles and ORIGINAL PRODUCTIONS is expected to dramatically reduce or eliminate future producer lawsuits. If we are no longer handling micro-budgeted films from first-time producers, we won't need to waste time in a courtroom explaining how math or consignment video sales work. We are NOW dealing with a higher class of program suppliers, and are intimately involved in the production processes of most of these films - to create better quality titles with the greatest commercial value. It's the beginning of an exciting era for HHSE, and corresponds with the end of the micro-budget, direct-to-video market. Consumers demand better quality films, with original stories, quality production values, known stars and legitimate theatrical release... that's our 2017 - 2018 and beyond business model, so stay tuned for more!

... last but not least, speaking of EMMETT-FURLA films, here's an oldie-but-goodie photo of HHSE C.E.O. Eric Parkinson with RANDALL EMMETT and CURTIS 50-CENT JACKSON at the Sundance Film Festival.  Parkinson has worked with George Furla and Randall Emmett on five prior productions, including "FUTURE SHOCK(directed by Parkinson) and "GRIZZLY MOUNTAIN" (written and Produced by Parkinson).  "FUTURE SHOCK" is an HHSE title for worldwide rights;  "GRIZZLY MOUNTAIN" is a MGM-UA title.


Friday, August 25, 2017

Oh Boy, what an interesting dilemma!!

So - even after a significant re-cut and re-mix, the MPAA Film Ratings board will still NOT issue an "R" rating for the film!  This poses some interesting questions, obstacles and opportunities...

* Will horror fans flock to see a watered-down version... or will they wait for an unrated home video release?

* Will indie theatres (non-chains) agree to book the unrated version... or will they also require the "R" rating that Regal, Cinemark and AMC prefer?

* Will the film's struggles to get an "R" rating make it more visible and desirable to the horror market?

So many questions, so little time... maybe the Ghost of Bloodfeast Past will provide a vision?!?

Stay Tuned....


VODWIZ presents: Three Steps to a POWERFUL Marketing Angle & Position

Greetings HHSE Shareholders, Friends & Followers - As the home-entertainment world continues to evolve and mature, we find ourselves in an interesting position with our VODWIZ streaming portal.  As originally envisioned several years ago, VODWIZ has been structured with the support of nearly all major independent film companies, as a "one-stop" destination site for independent films.  As the venture grew, we found that three major studio labels were willing to "give VODWIZ a try" by offering an assortment of higher-end theatrical titles... so the venture was becoming MORE than a site solely for lesser-known, independent movies.

As we prepared for the launch of VODWIZ, we discovered that the cost for HHSE to build out the hosting, delivery and customer-service infrastructure was enormous (well over $1-mm), and that it was prohibitive to try to finance this with internal resources... and unattractive as a vehicle for borrowing (as a start-up streaming division with no revenue history).  So, when the opportunity to have hosting and operations handled by Nanotech arrived, we felt that this was a good solution to defraying these significant infrastructure costs.  

Unfortunately, launching via Nanotech did not work to either company's satisfaction.  HHSE supplier partners wanted to see the site fully functional before opening the floodgates to 1000's of films... but Nanotech wanted a substantial initial title count before committing more resources to the venture. Ultimately, after losing several years of momentum, Nanotech and HHSE/VODWIZ parted ways. We wish Nanotech well as they pursue the UltraFlix strategy of offering 4k format programming for streaming.

For the past year, VODWIZ was working to satisfy some benchmarks required for Cinedigm to act as the host and operational partner for the venture.  However, the cost-structure for Cinedigm's involvement was impeding enthusiasm from some of the HHSE-VODWIZ supplier studios.

So, what's happening with VODWIZ now?  As described last week, VODWIZ has now partnered with Amazon Digital Services for hosting, operations, payment processing and customer service of all activities.  This is being done without prohibitive benchmark requirements and at a fraction of the costs presented through the prior operational structures.  Better yet, the massive data and streaming capacity available through Amazon's multitude of regionally-based servers, has opened up two new "channels" (so to speak) for VODWIZ.  The VODWIZ site now being assembled, prepared and uploaded will feature THREE main categories of programming on the home-page menu:

WATCH - LEARN - PLAY

WATCH - menu link will open to the traditional VODWIZ assortment of passive-viewing programing:  thousands of feature films and television episodes, primarily from indie studios, will be available for viewing on both a transactional basis, or a subscription basis. This is the model that VODWIZ has planned from initial conception several years ago.

LEARN - this menu link is a new twist to the Video-On-Demand streaming market.  With an abundant supply of educational programming now available, the "LEARN" menu of VODWIZ can offer a wide range of subjects and levels.  Art, English & Composition, Foreign Languages, History, Math, Science, Social-Sciences and many more subjects and achievement levels (from beginner to advanced levels).  Most of these subject programs will offer interactive "quizzes" so that the user can track their achievement goals.

PLAY - VODWIZ will be offering a significant menu of single-player, interactive and group-play VideoGames under the PLAY menu option.  Amazon's large storage capacity and data delivery capabilities make the gaming / PLAY / option an important and exciting new component of the VODWIZ venture.

USER OPTIONS - VODWIZ will offer programming under two models:  Pay-Per-Transaction (starting at only $.99 per program, and increasing based upon studio rental models), and Monthly Subscription  Model (monthly plans for each category, and Premium Plans for LEARN & PLAY as described below).

The Premium Subscription Model will enable up to five (5) individual users per subscription (so that "Billy, Jr." can have his own login-access).  Parents can "limit" the access granted to their kids to wide range of restrictions (e.g., no "R" rated movies, no Violent Video Games, only 4-hours per day, etc...). Even better, parents can create a performance-based rewards model for the kids, by activating the Achievement Points option under the LEARN menu:  passing grades on the on-line quizzes generate access points to enable Billy, Jr. to watch movies or play video games!  With kids spending more-and-more time in front of electronic media today, having a mechanism to incentivize taking on-line classes to earn access to video games and movies is a twist to VODWIZ that we feel families will embrace.

Management is still working on the pricing models for the various Subscription options.  However, we are attempting to work out a $7-per-month model for "watch" only, and a $10-per-month "premium model" (which allows for multiple users, limitations as well as achievement awards access).  Our initial (first year) target is to have 100,000 subscription customers, averaged at $8.50 per month - for annualized gross revenues of $10.2-million.  The operational system we are building with Amazon will accommodate data servicing for up to 50-million monthly subscriptions, should the venture prove to be widely popular!

WATCH HERE FOR MORE VODWIZ UPDATES EACH WEEK!




Friday, August 18, 2017

HHSE Updates - Friday, August 18, 2017

Greetings HHSE Friends & Followers - Below are a few updates as requested by shareholders.

1).  MERGER UPDATE - The stock-for-stock swap, as originally structured back in March, placed a value on the Crimson Forest assets side which ultimately could not be reasonably supported by independent valuations. Accordingly, the ratio of stock for HHSE shareholders under the Crimson merger will need to be adjusted in favor of HHSE shareholders maintaining a larger percentage of the combined stock issued - and therefore, a higher premium-to-market formula. These Crimson Forest asset valuation issues impacted their balance sheets as well as the ongoing auditing process, but now seem to be heading towards a final resolution in the next few days. It is likely (but not assured) that the Newco post-merger company will be branded under Crimson Forest World Media, Inc., symbol CFWM.

2).  LEGAL UPDATES - Settlement in principal has been made with the producers of "UNION BOUND" through mutual legal counselors.  Settlement also seems imminent (according to HHSE counsel) in the XVIII matter; meanwhile, in anticipation of resolution and settlement, counsel for XVIII has extended the time for HHSE to file a response until the end of August. No other legal matters represent a material issue impacting the company outside of the ordinary course of business.

3).  NEW RELEASE ACTIVITIES - No formal theatrical re-launch date has been set for "BLOODFEAST" until the film receives the MPAA "R" rating (currently under appeal, after two rounds of editing).  There are THREE significant theatrical releases from HHSE for Q4, however, in respect of the merger activities and co-branding with other distribution partners, these titles have not yet been formally announced.  The first is opening in theatres Oct. 6 (so announcement needs to be done very soon).  The second release is November 3 and the final release of these three is Dec. 1 - all are significant level theatrical openings.  On the home video front, HHSE withheld / delayed the street dates to five titles that would otherwise have hit the video market during Q2 - and three additional titles that were slated for home video release during Q3.  These titles will begin hitting the home video, V.O.D. and Electronic / Digital platforms in Q4 and Q1 (2018).

4). NEW VODWIZ PARTNERSHIP - We are pleased, honored and excited to announce a new partnership with Amazon Digital to host the VODWIZ streaming platform - which is being tailored to fit the infrastructure of the Amazon Prime operations.  This major development has breathed a hurricane of new life into VODWIZ, so watch for updates on this venture beginning next week...


Tuesday, July 11, 2017

Production & Character Design Launched for MOTHER GOOSE, Major Feature

Greetings HHSE Friends & Followers - Two top visual effects & character designers have joined the MOTHER GOOSE production team, and have begun the process of designing the look of the principal characters in the film (including:  Mother Goose, Jack and Gillian, Old King Cole, Humpty Dumpty, Jack Horner and Tatiana Queen of the Faieries).  We're very excited to be moving forward with this long-awaited, epic family adventure, and will be releasing crew, talent and scheduling specifics through separate press announcements.




Friday, June 30, 2017

Shareholder Q&A - Pre-Holiday Weekend Post

Good Morning HHSE Friends & Followers - and Happy Pre-Fourth-Of-July Mega Weekend!

Over the past few weeks, HHSE / Crimson managers have received a variety of emails from shareholders asking for greater specificity regarding issues of the merger, operations and strategy.  These questions have been consolidated into TEN (10) key subject lines and are briefly addressed below, following a review with counsel as to breadth of disclosure and appropriateness.

* * * * * * * * *

1).  WHEN WILL THE STOCK-FOR-STOCK SWAP OCCUR - At this point, we have achieved the requirements to enable us to functionally 'do the swap" at any time (and simultaneously file the final docs with the Nevada S.O.S., and OTC Markets). There are no further regulatory obstacles impeding this final step. However, Crimson Forest is still "not fully current" with their S.E.C. reporting / filing... and we are advised that we cannot change the ticker symbol until "current reporting status" is restored. We do not want to do a stock-for-stock swap of HHSE shares into "CRIM" only to have to repeat some steps days later under the newly approved and issued ticker symbol. Plus, we feel it would be a psychological detriment to exchange robustly trading HHSE shares for Crimson stock while a "STOP" sign still exists on the current Crimson Forest Entertainment Group OTC listings page.

2).  WHAT IS THE TIMING AT THIS POINT?  HHSE / Crimson engaged a superb PCAOB auditing firm that will be submitting the review letters for 2-28-16 and 2-28-17.  This firm imposed some formatting requirements onto the workbooks and back-up for Crimson, which have been handled by a competent outside CPA firm (unaffiliated with either HHSE / Crimson or the auditing firm). Under PCAOB rules and Sarbanes-Oxley procedures, the internal control requirements rise above a consumer-level of QuickBooks and Excel formatting. So we were very excited to have this formatting step completed by a competent team of CPAs. Although our auditing firm has specifically requested that we not predict a particular "day" that they will release the report to us for inclusion in the Crimson filings, we are authorized to say that everything is on track for this to be completed "at some point during July."  FYI, July starts tomorrow, and ends in about four weeks from now.

3).  ARE THERE ANY MAJOR VENTURES READY TO "JOIN THE FOLD" FOLLOWING THE STOCK-SWAP?  Yes, several supplier issues, a major distribution venture, several mid-to-large level funding deals (including P&A Marketing, and VODWIZ), and one very significant corporate acquisition.

4).  WILL THE END-FORMULA OF SPLIT (Presently disclosed as being about 57.5% for HHSE and 42.5% for CRIMSON), STAY THE SAME?  No, during the course of the filings and various review procedures (including valuation analysis), the value of HHSE vs. Crimson has changed in HHSE's favor... so the final split will be more beneficial to HHSE shareholders.

5).  WHAT SORT OF UPDATES CAN YOU PROVIDE ON PREVIOUSLY ANNOUNCED PRODUCTIONS (alphabetically):

Basement, Belle Starr, Delirium, Final Minute, Kung Fu Cowboys, Mother Goose, Shimmer, Shuck & Jive, True Freshman?

Each of these films is in various stages of development, pre-production or production. In respect of our filmmaking teams, investors and co-production partners, we feel that updates for each deserve a separate and more thorough forum than a general blog post summary.

6).  WHAT SORT OF UPDATES OR SCHEDULE CAN YOU PROVIDE ON UPCOMING THEATRIAL & VIDEO RELEASES (including):

American United In Support of our Troops, Blood Feast, Dinosaurs of the Jurassic, Extraordinary Mission, Identity Crisis, Ride United, Shockwave, Spices of Liberty, Time Matrix, Where's The Dragon?

Blood Feast, Time Matrix and Where's the Dragon are all upcoming summer theatricals.  The other titles are slotted already into our Q3 / Q4 release schedule for home video / VOD.  Each merits their individual New Release announcement.

7).  ARE THERE ANY NEW "MAJOR" RELEASES FOR 2017 NOT YET ANNOUNCED?

Yes, four high-profile, very commercial titles have been acquired for 2017 theatrical release, each meriting separate announcements and fanfare.  Each of these titles will also be handled by HHSE / Crimson for home video, VOD, SVOD and Television release (for 2018). Additionally, there are three "specialty" titles that were acquired in Cannes that have not yet been announced - but are expected to be released theatrically in Q4 or Q1 2018.

8).  WITH TCA FULLY DISMISSED, ARE THERE ANY OTHER "MATERIAL" LAWSUITS IMPACTING THE COMPANY?   While there are still some clean-up issues regarding the resolution settlements with Andersons, Bedrock, JSJ and a few supplier-creditors, Management does not see any of the remaining issues as falling outside of managerial control or the ordinary course of operating a business of this nature.

9).  IS THE FINANCING FOR ALL OF THE ENHANCED THEATRICAL RELEASE ACTIVITIES NOW UNDERWAY COMING FROM "CRIMSON" SOURCES OUT OF CHINA?  Not at this time.  All of the P&A for the next eight (8) significant releases under HHSE / Crimson is being provided by either the producer clients directly, or through a marketing-fund venture (secured against title-specific revenues). The financing associates and affiliates of Crimson Forest in China are primarily interested in title-specific pre-sales of distribution rights into China, which provides a financing mechanism for the films to be produced and distributed by HHSE / Crimson in all other worldwide territories.

10).  BOTH OF THE CORPORATE WEBSITES FOR HHSE AND CRIMSON ARE VERY INCOMPLETE AND OUTDATED AT THIS POINT...WHEN WILL HHSE AND CRIMSON HAVE FULLY UP-TO-DATE WEBSITES, DESCRIBING THE COMPANIES, THE STAFF, THE RELEASES?  We expect that during July, both the Hannover House.com and CFF.TV sites will be fully updated, and "cross-connected" so that visitors to EITHER site will have access to both catalogs and content.

HAVE A GREAT AND LONG WEEKEND!!






Monday, June 26, 2017

HHSE Pacts with Director Rick Walker on production of "THE BASEMENT"

Good morning HHSE Friends & Followers - We are pleased to announced that HHSE is partnering with director Rick Walker on a fourth project together - this time for the September feature film production shoot of "THE BASEMENT." Previous projects with Rick Walker included the horror film "FUN PARK," the college football documentary "SOONER MAGIC," and the upcoming science-fiction thriller "THE FINAL MINUTE."

"THE BASEMENT" will be shot in and around Fayetteville, Arkansas, in order to make use of the production equipment and post-production capabilities of Hannover House-Crimson - as well as the lucrative State of Arkansas rebates (which can be monetized to receive rebates for up to forty percent of a film's eligible expenses).  The thriller tells the story of a reclusive old woman in a large and spooky house - who is keeping a dark secret in the basement.  Negotiations have commenced with a major star for this role, with additional, commercial cast members expected for the roles of the two nephews as well as the Police Chief who unravels their scheme.

Production is planned for a four-week shoot commencing September 25 - and the film is expected to be a late spring (2018) theatrical release through HHSE-Crimson Forest.

Watch here for more details!

Old Lady Nelson is having some guests for Dinner...
She's cooking-up a special meal for you in 
T H E   B A S E M E N T

(Teaser Art - Not Final Campaign)

Friday, June 23, 2017

VODWIZ activities at Cannes Market bring Supplier Studios count to 22 - representing over 4,500 titles!



Good Morning HHSE Friends & Followers - One of the many exciting aspects of the new financing from the merger of with Crimson Forest, is the long-awaited availability of funding to finally launch the VODWIZ consumer portal.  In anticipation of the current frenzy of mastering activities underway, HHSE executives Eric Parkinson and Fred Shefte held many meetings at the Cannes market last month, to recruit additional large supplier studios for the venture.  The results of the Cannes meetings were to functionally double the number of feature titles now available for upload to VODWIZ, to a count in excess of 4,500 titles.  This quantity (if all were posted and available), would rank VODWIZ in the top five for programming breadth of North American video-on-demand portals.  

As stated in the past, we have felt that "there's only one chance to make a first impression" with consumers visiting the VODWIZ portal.  Accordingly, we have withheld the formal launch of the service (and consumer support marketing), until we can make a strong first impression. We feel that a site with a broad selection of titles - ranging from recent theatrical titles and major studio fare, along with esoteric and hard-to-find independent titles - is the formula to build consumer excitement and viral buzz.  We can finally see the finish line that marks the consumer launch for this exciting venture. Watch this space!!



Wednesday, June 21, 2017

Busy Release Slate for the Post-Merger Summer / Early Fall Months

Good Afternoon HHSE Friends and Crimson Forest Partners - The next few months will see significantly expanded activities, including a release slate and distribution breadth that represents the highest level of consumer visibility ever for Hannover House theatrical releases.

Five titles (two of which have been previously announced) will see theatrical openings on more than 100+ screens beginning in July... and continuing non-stop through October.  The announced titles ("BLOOD FEAST" and "WHERE'S THE DRAGON?") are up first... but three others (which will each be announced individually) are already in queue for August, September and October... resulting in a relentless march of increasingly commercial releases to theatres, These higher-profile theatrical titles will also drive greater placements and revenues into the home video, VOD and SVOD windows in the months following.

A WIRE SERVICES PRESS RELEASE detailing additional information on these national theatrical titles... as well as updates on new PRODUCTIONS, new FINANCING and MERGER (STOCK-SWAP and FILING UPDATES), will be posted today (or pre-market Thursday at the latest). The delay in releasing these updates involves obtaining third-party approvals of release details, as well as attorney review of language relating to the merger updates.



Friday, June 16, 2017

HHSE thanks Academy Award Winner KIM BASINGER for being our "Eternal Goddess!"

Dear HHSE Friends & Followers - we are honored to announce that Golden Globe and Academy Award winning superstar KIM BASINGER has completed her role in the Crimson Forest-Hannover House production of "WHERE'S THE DRAGON?"

Ms. Basinger performed the role of "Eternal Goddess" and was recorded in Santa Monica, CA at Villa Formosa Studios. Crimson Forest Chairman JON LIM and WTD Animation Director SING CHOONG FOO were in attendance, with English-Adaptation director STAR NOORBAKHSH supervising via ISDN from Crisp Recording Studios in Fayetteville, Arkansas. "WHERE'S THE DRAGON?" will be released to theatres nationwide this summer... watch this space for more details!

UPDATE: Tuesday, June 20 - HHSE / CRIMSON FOREST partner with REGAL ENTERTAINMENT GROUP for a high-visibility, national theatrical launch of "WHERE'S THE DRAGON?" opening Friday, August 25.  This date has been selected to maximize family support for this animated feature, and to position the title for ancillary sales success in the following months (Home Video / V.O.D. / S.V.O.D. and Television).  Competitively, in the category of animated family features, THE EMOJI MOVIE is releasing July 28 (Columbia), and the next major animated title is NUT JOB 2 on August 11 (Open Road), and LEAP on August 30 (Weinstein Company). 




Star Noorbakhsh (Foreground) supervises some of the voice-talent performers in "WHERE'S THE DRAGON?" during the recording of the closing credits ensemble song at Crisp Recording Studios.

Thursday, June 15, 2017

... yet another victory for HHSE!

Greetings HHSE Friends & Followers - As reported in this blog, the prior litigation and loan dispute between Hannover House and TCA Global Master Fund was settled quite some time ago, and finally filed with the Florida courts on May 17.  The 10-mm collateral shares have been cancelled, and this matter is closed.

Again, this is ancient news for those reading this blog site (and recognizing the legal obligation HHSE is under to report with full accuracy on the status of issues at the date of such disclosures).  But in respect of those few, remaining naysayers who prefer "willful denial" to truthful reality, here's the court docet listing.  ONWARD!!



Wednesday, June 14, 2017

Be patient, my friends and you will be rewarded

Good morning HHSE Friends & Followers - As the days turn into weeks, some shareholders have lost patience awaiting the final closure of the impending CRIMSON FOREST-HHSE Merger and how that will impact the bottom-line value of their HHSE shares.

We can state unequivocally that the value of the HHSE shares post-merger is substantially over the $.03 / PPS level - and furthermore state that following a lengthy telephone call with FINRA on Monday, that the few, remaining issues impacting the final step (the stock-for-stock swap) are being resolved and will promptly remove any final impediments to the stock exchange.

For those of you who have grown impatient and feel you must sell-sell-sell now, we bid you farewell and safe journeys.  But we also have an obligation to disclose that the stock-for-stock swap is based on a much higher value to HHSE shareholders (regardless of the temporary, day-to-day variations of the current trading price).  Selling now will only hurt those particular sellers, who we suspect may feel rather foolish in the coming days.  As the merger is structured, HHSE shareholders are being issued newly re-branded Crimson shares based on the predetermined level of the company's assets... not based on the momentary trading price of the HHSE stock prior to the swap.

Unless you have an urgent need for liquidity, veteran traders will be sitting it out for this final, brief pre-swap spell. This morning's blog is being posted now, in the final days before the stock-swap, as an advance rebuttal for anyone who might later claim "we didn't know" (about the short time frame to the swap, and the HHSE valuation being established at substantially over $.03 / PPS).  

For those of you hanging on... it's going to be an AMAZING Summer, followed by a consistent and accelerating momentum in revenues and results through the next few years.  This is the "prize" that HHSE management has been working to achieve:  a fully-reporting equity, substantial operational and marketing funding, and a slate of star-driven, high-profile movies to serve as revenue locomotives!  Watch this space...




Tuesday, June 6, 2017

Corporate Updates on Merger Events / Resolutions

Good afternoon HHSE Friends & Followers - In anticipation of our pending merger approval, HHSE has been working with our attorneys and key creditors on the final resolution of some of old issues that have been fuel for stock critics - but which were never material threats to the operations of our business.  Here's a quick recap of some recently resolved matters and pending transactions:

1).   TCA GLOBAL MASTER FUND - as stated previously in this blog, a settlement was made with TCA to fully close all maters... well it's finally been filed with the courts in Florida... as the court-recorded documentation of settlements sometimes occurs weeks / months after the deals are made.  In any event, HHSE stock certificate #1530, issued June 18, 2013 as collateral for the TCA Investment Advisory Fee has been cancelled, and these 10-million shares will be returned as unissued treasury stock.

2).   JSJ INVESTMENTS - Principal terms of a settlement are expected this week, based upon communications between attorneys.

3).   ANDERSONS P&A - Principal terms of a settlement are expected this week, based upon direct communications with the lenders.

4).   BEDROCK VENTURES - Company has engaged counsel to re-open the case under Arkansas Law, as compelling evidence exists to have the California matter vacated.

5).   AMITYVILLE ASYLUM - New counsel has been engaged in this matter, which is expected to be settled (or adjudicated) by June 27.

A separate Blog Posting on Merger activities with Crimson Forest is being prepared for later today.

********************************************************************************
UPDATE:  Greetings HHSE Friends. The update planned for Tuesday got hijacked by some post-merger funding details that monopolized managerial time for the past two days.  As alluded to in some of our recent, prior blogs and filings, five significant media players (all China-based) will be conducting various financing transactions "post-merger" that will provide production funds, releasing funds and operational resources.  It is our belief that the balance-sheet value and revenue benefits from these various transactions will not only transform the company, but will also elevate the business to a level of qualifying for the NASDAQ exchange.

Meanwhile, here are some quick updates for those issues which we are authorized or empowered to disclose at this time:

1).  MERGER APPROVAL - we have not received any regulatory feedback that would indicate any issues, delays or problems with the valuation methodology and the stock-for-stock swap.  We have separately applied for a Crimson ticker symbol change, and are awaiting word on that matter as well.

2).  DTC / STOCK FOR STOCK SWAP - Our advisors tell us that HHSE shareholders will not need to do anything in order for each of them to receive Crimson Forest shares on the date of the stock-for-stock swap.  Crimson shares are DTC (electronic) and this will avoid the prior issues some shareholder incurred regarding paper certificates from HHSE.

3).  PREMIUM VALUATION - as structured, HHSE shareholder will receive Crimson shares at a significant premium value-to-market.  We cannot disclose the percentage structure until we receive full-regulatory approval.  However, the bottom line is that a shareholder owning "$X" worth of HHSE shares will receive "$X++" of newly re-branded Crimson shares.

4).  CRIMSON SHARE SUPPORT - Contemporaneous with the merger, several of the China-based affiliates will be buying blocks of Crimson stock on the public markets.  It is our belief that this will further support the Crimson share price and result in an even greater appreciation of value for HHSE shareholders.

5).  POST MERGER ACTIVITIES - Besides the launch of several high-profile theatrical productions post-merger, the newly re-branded Crimson-HHSE will be (finally!) launching the VODWIZ portal, and embarking on three, very exciting new distribution ventures involving North American activities, International Sales, and Theatrical Distribution in China.  It is our belief that these significant post-merger activities will have a dramatic impact on the company's revenues, visibility and valuation.

6).  TIME FRAME - we believe that we are only days away from completion of the tasks that are required for the regulatory approval of the stock-for-stock swap, and the physical share exchange.  However, as this time frame is driven by outside agencies, we cannot provide a more specific prediction of the precise day that all of this will be completed.







Sunday, June 4, 2017

Post-Cannes & Merger Follow-Up Blog Post Slated for Tuesday, June 6

Greetings HHSE Friends & Followers - At the request of a good number of legitimate shareholders, we have been asked to release both a "post-Cannes" follow-up report... as well as an update / status blog on the present status of the Crimson Forest-HHSE merger completion.

Both topics require third-party approvals of information (or legal counsel);  accordingly, we have set Tuesday (June 6) as our target date to release whatever level of new information is approved for disclosure at that time.

As stated previously, the Cannes Marche du Film was brisk and productive for the combined entities of Hannover House - Crimson Forest, and there were significant new venture deals structured for an impressive slate of high-profile theatrical titles with major stars.

Also, as per prior disclosures, the two companies (Hannover House and Crimson Forest) are already operating as a combined entity, with the only outstanding issue being the stock-for-stock swap (of Hannover House shares into a newly rebranded Crimson equity); the steps for this final process are well into motion, but require regulatory review and approval which is outside of the direct control of HHSE-Crimson managers.

For a variety of reasons, the Cannes Film Festival and Marche du Film is the unquestioned, dominant world market for high-end films.  The luxurious destination is an attraction for the major buyers, and the costs and obstacles to travel and obtain festival credentials pose obstacles to keep away the sort of peripheral non-industry-outsiders who might otherwise clog the lobby of the AFM Lowes Hotel in Santa Monica. The coveted Cannes Buyer's Badge is the ultimate pass to all locations and major events, but requires multiple, positive-referrals from registered sellers.  So, we have been very honored to have achieved this recognition status for the past four years:  a validation of Hannover's stature, proclaimed by top industry insiders and some of our current and prior program licensors.

Assorted photos from Cannes meetings are below and on prior Cannes blogs...



Sunday, May 21, 2017

What a difference a YEAR makes!! Brisk Cannes Reception for HHSE-Crimson as PreSale Buyer!

Greetings HHSE Friends & Followers - Parkinson and Shefte are enjoying a brisk market reception at CANNES to the news of the Crimson Forest merger - and the combined company's subsequent availability of $65-mm in presale financing for high-end feature film projects.  The caliber of meetings and products being presented is unprecedented for the Company - and lots of deals are being made.  In respect of the caliber of these films, each new acquisition will be announced via a separate and formal press release.  But for now, here's some quick images from the first three days of the 70th Annual Cannes Market for Hannover House / Crimson executives....

Dual Registration as Crimson and Hannover House. 

Fred and Diana Shefte at the TV Rights Dinner.

MAJOR feature announcement (our biggest budgeted film EVER) coming soon between HHSE-Crimson and UK's SILVER LINING Films (Parkinson pictured with Grant Bradley of Silver Lining).

Non-Stop action on the Palais Steps.

Lovely little alcoves, stairways and hidden gems in Canne's historic old town.

The Castle that overlooks the Canes harbor is atop the distant hill.

The Future is Bright - and so is the Cannes Beach (Parkinson really should be wearing shades!)

Wednesday, May 3, 2017

FIRST LOOK: Official Theatrical Poster of "BLOOD FEAST" has Horror Fans and Publications Hungry for More!!

Greetings HHSE Friends & Followers - The June 23 release of "BLOOD FEAST" keeps growing in stature, breadth and consumer enthusiasm.  To best position the film for theatre lobby light-boxes and ads, we chose to go with a "lighter background" concept for the official poster... and consumers have told us that it's deliciously evil! (pardon the puns).  Watch for more news as it develops... and if you have time, check out the link below for a nice article about the release.



Monday, May 1, 2017

Opening at theatres this FRIDAY: Action-Extravaganza SHOCK WAVE!

Hannover House and Crimson Forest Entertainment Group, Inc. announce the theatrical release of "SHOCK WAVE" - launching this Friday to theatres in top markets in the USA and Canada, as well as a simultaneous release to nearly a 1,000 theatres in China.


https://www.youtube.com/watch?v=f_nvtHX9QOc

Distribution office staff are getting the posters, trailers, final week ads and masters out to theatres now!

"SHOCK WAVE" is from acclaimed action director HERMAN YAU (director of the international hit "Legend of IP Man" series) - and features international superstar action hero ANDY LAU (most recently co-starring with Matt Damon in "THE GREAT WALL" as well as "INFERNAL AFFAIRS"). This is an AWESOME and EPIC action-adventure!






HERE'S A PARTIAL LIST OF "SHOCK WAVE" LOCATIONS / MAY 5 / MAY 12

Theatre City
AMC Empire 25 New York City
Regal Commerce Center 18 North Brunswick
AMC Orange 30 Los Angeles
AMC Puente Hills 20 Los Angeles
AMC Atlantic Times Square 14 Los Angeles
AMC Cupertino Square 16 San Francisco
Riverview Plaza Stadium 17 IMAX & RPX Philadelphia
Regal MacArthur Marketplace Dallas-Ft. Worth
Countryside 20 Washington DC
Regal Hollywood Stadium 24 @ North I85 Atlanta
Edwards Marq'E 23 Imax Houston
AMC Studio 30 Houston
AMC Gulfpointe 30 Houtson
Regal Thornton Place Stadium 14 Seattle
AMC Sunset Palace 24 Miami-Ft. Laud.
UA Arden Faire 6 Sacramento
AMC La Jolla Village 12 San Diego
AMC Bloomington 11 Indianapolis
AMC Newport on the Levee 20 Cincinatti
AMC Lennox 24 Columbus
AMC Grove City 14 Columbus
Regal Dole Cannery 18 Honolulu

Thursday, April 20, 2017

HHSE nears final completion of "WHERE'S THE DRAGON?" - Coming soon to theatres!


We still have a few more tweaks to the mix and final cut... but "WHERE'S THE DRAGON?" will hit theaters nationwide in June - and will be one of the first highly-visible, mainstream theatrical titles under the newly merged corporate structure.  

As stated previously, the HHSE Merger activities are expected to have regulatory approvals on or about Monday, May 1st - which will be well-timed for the company's presence at the Cannes Film Festival and Marche du Filme as both a seller of major theatrical titles, as well as an acquisition licensor for North America rights under a new, Major Studio distribution pact. 


Very exciting times... 

Monday, April 17, 2017

The beginning of something truly significant…

Those who cannot remember the past are condemned to repeat it.”
George Santayana, The Life of Reason, 1905.

For fifteen of the twenty-three years that Hannover House has been operating, the company has been involved with the acquisition and release of movies and television programs onto DVD and other home media platforms.  Since that time, the company has released or represented over three-hundred-fifty (350) titles, ranging from significant sell-thru hits, to specialty home videos for targeted audiences.  At last count, the company had sold a total of over 34-million home video units to retailers in North America (primarily DVD, but some on the BluRay format and in the early years of Hannover’s home video distribution, some were sold on the VHS cassette format). 

Not every title acquired and released by Hannover House to the domestic home video market these past 15-years has been a financial success for the company.  The biggest failure of expenditures-compared-to-revenues was the 2005 release of “Off The Lip” – which, despite a theatrical release expenditure of more than $350,000, did not manage to inspire a single one of the nation’s top mass merchants for home video placement.  Fortunately, the loss with “Off The Lip” occurred at the same time when Hannover House had seven (7) of the top ten (10) best-selling indie video titles at Walmart – when we were literally selling-thru to consumers over 100,000 units per week through Walmart nationwide.  So that initial theatrical release endeavor was expensive, but not deadly.  And a valuable lesson was learnt:  opening movies at theatres only helps the retail home video response if the movie actually DESERVED (commercially) to have been released to theatres. 

As Hannover released more titles to the home video market, trends began to emerge, even as the market itself was maturing and evolving.  By 2008, when Walmart, Target and Best Buy started aggressive merchandising of the (then) new BluRay format, the shelf space was usually reallocated away from independent DVD titles, and migrated for use in displaying BluRay units of major studio releases.  That was a big loss for all indie distributors – and making our second-tier titles “available on BluRay” did not pick-up the slack.  By 2010, certain genres of home videos for indies studios were drying up or functionally non-starters:  “no-name comedies”, “dramas” and “special interest subjects” could no longer be placed at the big-box retailers due to sluggish retail turns.  The major studio theatrical releases were holding their home video sales volume, but at the expense of diminishing shelf space and placement frequency for the indie distributors.

It was about that time (late ‘2009 / early ‘2010) that Hannover House was offered the opportunity to “reverse-merge” with Target Development Group, Inc. and become a publicly-traded company.  This was not a desired goal for either Eric Parkinson or Fred Shefte.  But the TDGI venture came with an attractive investment-banking arrangement with Bedrock Ventures:  in consideration of the merger, Bedrock would place $1.5-mm as a direct stock purchase agreement, and would separately fund loans of $500,000 towards acquisitions and $300,000 towards P&A (theatrical releasing costs). 

Energized with these funding commitments in hand… and motivated by a positive thumbs-up from several of the industry’s top consultants… Hannover House took the leap-of-faith and decided to try for a mid-level, nationwide theatrical release.  In January, 2010, Hannover House surprised the industry by beating out SONY, FOX and LIONSGATE at the Sundance Film Festival for the acquisition of director Joel Schumacher’s teen-angst thriller, “TWELVE.”  The cost was high:  $1.75-mm plus a theatrical release commitment to open on not less than 200 theatres simultaneously.  But the upside seemed greater, and after all, the funding had been secured (or so we thought).  While Bedrock did, indeed, fund the $500,000 as a loan for the down-payment for rights to “TWELVE(and later, funded $300,000 of the $2-million+ spent on theatrical releasing costs), their original agreement to fund $1.5-mm as a direct stock purchase never occurred. 

With only a few weeks to go before “TWELVE” hit theatres on August 6, 2010, Hannover House was in full-scramble mode, working diligently to try to secure vendor credit, private loans, and ancillary sales advances to help cover the theatrical costs.  We went from being a reliable (but small) indie distributor, to being full time managerial firemen, moving from one emergency flash outbreak to the next.  The release of “TWELVE” suffered, the relationship with Bedrock tanked, and the company was put into full scramble mode for months thereafter.

Over the next six years that followed – the history of Hannover House has been a bit of a roller-coaster ride, for both management and shareholders.  High moments – such as a multi-million-dollar sponsorship from SEA WORLD in 2011 (for “Turtle: The Incredible Journey”) were met with humiliating lows, such as the principal cast’s refusal to attend the red-carpet premiere of “All’s Faire In Love,” in New York City (also in 2011). In each of the successive five years, Hannover House has overcome significant obstacles, and met with welcomed successes, only to face financial challenges and legal struggles.  Finally, when the most notable events in 2016 were the bankruptcy or closure of the company’s top two wholesalers, it became clear to management that it was time to look at a whole new business model:  one that meets and leads the dynamic edge of the industry, rather than seeks out the occasional crumbs from the trailing tail.

In order to build a better company, it is essential that HHSE managers and shareholders take a high-altitude look at the trends in the industry to best determine the direction in which the consumer market for entertainment is moving.   Skipping over the volumes of industry research, sales trends and analytical studies to reach the consensus bottom-line conclusions, we see Ten Essential Trends:

1)      DTV - “Direct-to-Video” programming is rapidly declining in retail value in the North American retail marketplace;

2)  RENTAL – Except for Redbox Kiosks, Family Video and a handful of stubborn independent video specialty stores, there is functionally no more retail “rental” home video market in the USA;

3)  VOD - “Video-On-Demand” continues to grow, but disproportionately in favor of theatrical titles;  VOD is the new “rental experience” for the emerging generation of consumers;

4)  SVOD - “Subscription V.O.D.” license fees are dropping precipitously as Netflix now favors major theatrical hits or their own programming over independent or non-theatrical titles;

5)  INTL - Key International Markets are booming for specific film genres:  Action, Sci-Fi and Horror; but low-budget, no-stars or non-theatrical titles are functionally impossible to sell today;

6)  PRODUCTIONS – Due to the availability of significant international pre-sales for selected programming, as well as State and Federal tax and rebate incentives, there is a viable business model that includes the facilitation or physical production of films as a revenue source;

7)  DISTRIBUTION PACTS – As the retail market shifts away from independent titles – in favor of Major Studio titles – the value of a major studio partner has grown exponentially… both for domestic release, but more crucially for international territories;

                  8)  WHAT ARE CONSUMERS, INTL. BUYERS & RETAILERS RESPONDING TO?  
a)      High-Concept Films – action, science-fiction, horror, family-appeal;
b)      Films with one or more “name” stars;  Films shot in "original language" English;
c)       Films with wide theatrical visibility, momentum and credibility;

9)      WHAT ARE CONSUMERS, INTL BUYERS & RETAILERS NOT RESPONDING TO?
a)      Low-Budgeted releases, without stars or theatrical visibility;
b)      Comedies & Dramas are dead genres, unless driven by credible stars in lead roles;
c)       Micro-budget production values that do not compare to mainstream quality expectations;

10)  BALANCED RELEASE SLATE – There is an economy of scale for a distributor in the current marketplace to release ONE (1) “major” theatrical title per quarter, plus ONE (1) “mid-level” theatrical title per month, and supplement these with one or two third-party acquired titles that still are essentially “direct-to-video” or V.O.D., but are now supplemental revenues (rather than the company’s primary cash-flow source).

*******************************************************************

WHERE ARE WE NOW - WHERE ARE WE GOING FROM HERE?

Last Month, on March 10 specifically, Hannover House managers signed a letter-of-intent to join with another publicly-traded company, two private companies and a major studio distribution partner, to create a new structure that addresses each of the Ten Essential Trends described above, and which we feel will bring substantial value to our shareholders.

Over these past five weeks, the legal, operational and structural changes that are required to effectively launch such an ambitious merger have been in motion.  The two privately held companies will join with the two publicly-traded companies into an overall venture that is fully reporting, fully registered, and sufficiently funded to allow for a realistic pursuit of a NASDAQ listing.  This venture involves the placement of approximately sixty-five million dollars (USD $65,000,000) from pre-existing international presales and feature film private investor commitments, and will provide us with both the high-end “major” titles as well as the first two-years of the “mid-level” theatrical titles.  Due to availability of State and Federal incentives and rebates on the productions, the company will also be well funded with theatrical releasing resources – as well as earning lucrative production company service fees upfront.  A major studio partner will handle most of the domestic home video and V.O.D. activities (excluding VODWIZ.TV) as well as international sales through their existing distribution units in over 100 territories worldwide.

Upon regulatory approval, existing Hannover House shareholders will receive a significant premium-to-market redemption, and overall, the Hannover House shareholders will retain a majority control in the combined entities.

Over the next few days, details of the venture partners will be released through mutual public announcements. As the merger L.O.I. contains performance triggers (including specific funding requirements and regulatory approvals), Hannover House has honored the temporary, proprietary confidences imposed on all parties - as is customary for a venture that involves four separate companies and a major studio distribution partner.

For the principal venture parties involved in this new structure, we all feel that this is a marriage in which the whole is greater than the sum of the parts.  The consensus is that this is the “launch moment” for a truly significant entertainment company… and a move that will bring substantial value to all of our shareholders.

We wish to thank the company’s many patient, “long” shareholders, and we are excited that you will be rewarded for your loyalty and support as we have navigated a winning plan in this evolving media sector. The new management team includes some of the industry’s most respected and successful executives, and our future as a successful, independent studio and media distributor is bright.  Watch for updates on this BLOG, including advance notification of Form 8 Information Statement Filings.

*****************************************************************************

LAST - BUT NOT LEAST - Watch for the Hannover House - CMC Pictures / Crimson Forest Release of "SHOCKWAVE" to key theatres in the USA and Canada on Friday, April 28 - with a simultaneous release across China. This is a specialty release for the North American market (Mandarin with English-subtitles), to reach this responsive and targeted audience.

https://www.youtube.com/watch?v=qwKno-hnjik