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Sunday, October 22, 2017

HHSE - Blog Update / Shareholder News Summary

Blog Update / Shareholder News Summary

Over the past few weeks - following the Sept. 30 "deadline" provided to Crimson Forest Entertainment Group regarding compliance issues and documents - HHSE managers have received multiple emails and calls asking for an update and strategy report.  Now, after the formal deadline and subsequent "cure" periods have elapsed, we can finally discuss and disclose the status of the corporate merger and what Hannover House has implemented.

The purpose of this BLOG is to provide our shareholders with a current summary / overview of the principal activities underway; a more formal OTC Markets filing will reflect the additional details of the corporate merger and uplist activities - and wire service press releases will better elaborate the new titles (acquisitions and productions) and ongoing theatrical, video, V.O.D. and International distribution achievements.

1).    Status of Crimson Forest Merger / Uplist Activities - Absent of crucial Crimson Forest documentation and financial support materials that are required for a PCAOB audit, there is no way to bring Crimson Forest "current" (as a fully reporting equity) and as such, there is no good path to facilitate proceeding with the planned corporate merger. Technically, we COULD proceed with the merger... however, Hannover House shareholders would be trading a robust daily equity (in HHSE) for shares in a "STOP SIGN" equity with functionally no trading volume and no path to ever restore itself to fully reporting status (CRIM). This made no sense to HHSE managers - and we put forward a Herculean effort to try and proceed with the merger. But at the end of the Sept. 30 deadline (and a subsequent "cure" period), we felt enough time and effort had transpired, and that alternative corporate paths would bear fruit for our shareholders more quickly.

The past six months have not been wasted, however, as the activities to bring Crimson Forest "current" have been mirrored by HHSE - and our books and records for 2016 are fully completed; as for the current fiscal year (ending 12/31/2017), these can be closed out and submitted to the auditors by January 5.

Additionally, many of the key deals now in place for HHSE were sparked by enthusiasm and introductions resulting from the planned merger.  For instance, five of our highest profile titles came as a result of contacts that occured after publicity on the merger activities appeared in industry trades; the Sony Pictures Home Entertainment, Random Media and Orchard distribution pacts occurred following a burst of publicity momentum on Hannover House; the production funding for SHIMMER and RIOT ACT were sparked from meetings that were originally merger-related; new production funding for MOTHER GOOSE and MELTDOWN includes financing presales from China (contacts that were originally introduced through Crimson Forest and Cannes meetings, but not part of an ongoing Crimson Forest structure); and last but not least, the VODWIZ streaming venture has since closed a deal for 2,006 additional, new titles (New American Library) and partnered with Amazon Digital Services for hosting and operations. These are significant, material-level major events for HHSE.

On the negative side, we have lost a lot of time and momentum this past year. The energy required to work on the Crimson merger meant that many of our own releases were delayed - and thus our revenues from those titles were delayed; the momentum for our own registration was transferred over to the Crimson restoration project; and funding anticipated for major features from Crimson turned out to be cast-dependent and "Mandarin-skewed" in both story-line and market-appeal... which was not what we had been led to believe.  We don't believe that Mandarin-language releases such as "Shockwave", "Extraordinary Mission" and "Tag Along 2" will ever have more than an inconsequential revenue result from the North American marketplace - it's not what theatres and home video retailers in this market are supporting - and this was a creative and philosophical disagreement between HHSE management and Crimson principals.

So, we have agreed to a friendly dissolution of the merger - and a full restoration of our prior relationship as an arm's-length "distributor-and-supplier" structure. "PALI ROAD", "LOST IN THE PACIFIC" and "WHERE'S THE DRAGON" were all contracted under distribution agreements prior to December, 2016.  The merger talks with Crimson started in early January of this year, culminated in a meeting in L.A. on Jan. 25, and ended up with a fully executed document by early March. During those months - and continuing through until last week when the applicable "cure" period after our Sept. 30 performance deadline expired - Hannover House and Crimson were handling the above titles as if we were already a merged entity.  Now, on a going forward basis, the prior status will prevail.

Although the Crimson merger will not occur, the uplist will proceed, and the maturation of the company to "the next level" is already well underway.  We are now partnered with a Major Studio for distribution; we're Executive Producers / Worldwide Distributors on two CURRENT productions; we have two major titles in theatrical release (Nov. 3 and Dec. 1) and four "genre'" titles for more limited release in the next few months (see below); we have more than doubled the title library for VODWIZ, and partnered with the world's leading digital services operator (Amazon); we have new release DVD and BluRays in the pipeline for February, March, April and May (collectively generating over $4-million in gross shipments), and we are in final documentation of major financing agreements to cover the epic productions of MOTHER GOOSE and MELTDOWN (each of which is transformative in what they will do for HHSE's profile and revenues).

Check out the corporate updates below, and get ready to see some visible, measurable action from HHSE over the next few weeks. The future is bright and the future is RIGHT NOW.

2).    New Release Schedule (titles, media and dates);

Working closely with Regal Entertainment and other major theatre chains, HHSE has modified our theatrical release slate to better accommodate screen availabilities, promotional opportunities and for the avoidance of competitively similar releases from other studios.  Principal THEATRICAL title activities for the next few months are:

a).  BATTLECREEK - the acclaimed dramatic thriller from director ALISON EASTWOOD opens in two weeks (Nov. 3), in approx. 20 locations in key USA Markets.  The film's primary star is BILL SKARSGARD, well-known from his current smash hit "IT" (he plays Pennywise, the scary clown), and his upcoming Stephen King TV series, "Castlerock."  We have been fortunate to receive major media support for BATTLECREEK, including National TV show placements on:  ACCESS HOLLYWOOD, EXTRA, E! and ENTERTAINMENT TONIGHT, and Alison Eastwood interview appearances on FOX AND FRIENDS, THE VIEW, TALK, GOOD DAY NY and HOME AND FAMILY.  There will be an "Eastwood Family Screening Event" in Los Angeles on opening night (Nov. 3), which will be open to the public (and is expected to generate good attendance).

BATTLECREEK Director ALISON EASTWOOD is now on the P.R. Tour for HHSE.

Opening Night Screening of BATTLECREEK in L.A. for Eastwood Ranch, Friends, Family & the Public on Nov. 3  at the LAEMMLE MUSIC HALL THEATRE on Wilshire Blvd., in Beverly Hills, CA, is expected to generate solid attendance.

Proper acknowledgment for the participations and work of Hannover House / Medallion and HHSE Principal managers (Parkinson and Shefte) appear on HHSE Theatrical posters for all key releases.

b).  DAISY WINTERS - a much broader release (over 100 theatres) is set for December 1st for this awards-worthy drama featuring stunning performances from Brooke Shields and a breakout performance from young Sterling Jerins in the title role.  The Media support has already begun, fueled by the Hannover House MEDIA DAY in NYC on Sept. 26, plus a special event premiere at the Regal Union Square (NYC) on Oct. 5.  Already, Brooke has appeared on several national talk shows promoting DAISY WINTERS, including Bravo's WATCH WHAT HAPPENS LIVE and the highly rated TODAY SHOW on NBC. Much more to come, including major feature stories in People Magazine, USA Today, Closer, In-Touch, ACCESS HOLLYWOOD, EXTRA and E! TV.

When Superstar BROOKE SHIELDS wants to get a "fan photo" - 
you know your young leading lady (Sterling Jerins) is starbound!

Sterling Jerins and Brooke Shields with Producer Jane Badler at the Regal Union Square 
Special Event Screening, Thursday, Oct. 5 

NBC's TODAY SHOW on Friday, Oct. 6 reached 2.5-million viewers (for the 3:54 second interview), plus 1.7-million social media followers for the short (but cute) LIVE STREAM below (featuring HHSE's "proud parent" photobombing in the background!)

TODAY SHOW Livestream Promo - after a lengthy in-studio interview with Brooke:  "Amazing, Awesome, Powerful, Don't Miss this Movie!" were some of the takeaway quotes.

PEOPLE, US MAGAZINE and CLOSER all picked-up on our October Theme Photo Op with Brooke Shields at the HHSE - REGAL CINEMAS event in NYC, Oct. 5

c).  BLOODFEAST - Now that the MPAA has approved our fourth edit for "R-Rating Status" - we can FINALLY get mainstream theatres to book this picture... watch for a roll-out beginning Nov. 17 into top markets (staggered over a 2-month period).

d).   CHOSEN - this impressive World War II thriller continues to get theatrical bookings in key USA markets, and now into CANADA (Toronto, Ottawa, Calgary and Vancouver)... watch for playdates in December and January.

e).   DEATH HOUSE - A wild horror-comedy from the producer of "Bill & Ted's Bogus Journey" is building strong horror-market enthusiasm from conventions and specialty sites.  Opens Jan. 19, 2018 in a yet-undetermined (but significant) number of theatres!

f).   WHERE'S THE DRAGON - With the dissolution of the merger between HHSE and Crimson Forest, the company is finally cleared to revert back to the terms of the Dec. 2016 distribution agreement for this title.  Accordingly, on February 3, 2018, this enchanting Animated Feature will be released to theatres in key markets, in advance of a May, 2018 Home Video and V.O.D. launch.

Academy Award-Winner KIM BASINGER leads the voice cast for the upcoming HHSE 
family-animated feature, "WHERE'S THE DRAGON?"

Temporary Poster Art 

Adaptation Director STAR NOOR and principal voice actors for WHERE'S THE DRAGON? gather for the group voicing of the closing credits theme song.

g).   GETTING GRACE - Hot on the heels of a major NYC Market festival SWEEP of all major awards, HHSE will be releasing this Faith-Based Comedy-Drama nationwide on February 10, 2018 - with an outreach campaign that includes mega-churches and a key-market BUS TOUR with star and director DANIEL ROEBUCK ("Matlock", "The Fugitive") to drive local market enthusiasm.

3).  REGARDING HOME VIDEO RELEASES - we are pleased to report that substantial video orders have already been received by WALMART and BEST BUY for both BATTLECREEK and BLOODFEAST for FEBRUARY..  Placement of videos for these titles into REDBOX, TARGET and NETFLIX will be determined soon - driven in part by their critical and commercial reception during the upcoming theatrical releases.  NETFLIX STREAMING is no longer assured as a result of limited theatrical release support... but HHSE is still batting 100% for SVOD placement of our theatrical titles.

Other upcoming home video releases include:  The Redbull motor sports actioner RIDE  UNITED, the thrillers MUSE and INSOMNIUM, the historic-drama THE LENNON PROJECT, the faith-based-Christian-appeal films SACRED HEARTS and TRINITY, and the long-awaited home video launch of BONOBOS: BACK TO THE WILD and SLEEPER CELL: THE ALGERIAN through a major and very exciting new distribution pact with SONY PICTURES HOME ENTERTAINMENT for selected releases (Medallion titles will continue to be represented by CINEDIGM;  SONY as an additional wholesale distribution partner for selected Hannover House distributed titles provides the company with the opportunity to represent films that would otherwise not be available). 

4).  REGARDING BOOK PUBLISHING ACTIVITIES - we are pleased to announce the January 23 re-release of "QUIETUS" by Vivian Schilling - and the support of BARNES & NOBLE, BOOKS-A-MILLION, HUDSON GROUP and a U.K. Wholesale Consortium for this release.  We are also on standby for Thursday's release of JFK Assassination Documents - as there is a rumor that these disclosures may SUPPORT the thesis presented in the Hannover House release of "BLOOD, MONEY & POWER: HOW L.B.J. KILLED J.F.K."

5).    Update on Feature Film Productions (titles, status, dates and details);  HHSE has partnered with U.K.'s Silverlining Productions on the Family-Appeal / Creature-Feature "SHIMMER" (about a friendly Welsh Dragon). Commencement of Principal Photography was delayed by a few months to allow more time for the manufacture and tweakng of the Animatronic DRAGON character. However, filming is now on schedule for Nov. 6 in central Snowdonia, Wales.

"MOTHER GOOSE" production finance is cast-dependent, so coordinating the schedules of Shirley MacLaine and Samuel L. Jackson with other production issues has caused delays. By April, if we have not resolved scheduling issues, HHSE will seek an alternative, comparable-stature star for the Valkerna role. A major restaurant promotion (in support of a wide theatrical release) has been structured - and financing is expected through a U.K.-China-Arkansas multiparty presale structure.

"THE RIOT ACT" is an epic western, based on the true story of a romance, a murder, revenge and a haunting that occurred at the Van Buren Opera House in Arkansas in 1903.  Actress LAUREN SWEETSER ("Winter's Bone") leads an impressive cast that will be announced separately in a formal new production release.  Full pre-production is underway for this feature, which begins filming next Saturday (Oct. 28) in and around Fort Smith and Van Buren, Arkansas.  OTHER CAST WILL BE ANNOUNCED THIS WEEK!

"LAST CHANCE FOR HONOR" (formerly "Shuck & Jive") - A financing commitment has been received from a private investment group that will enable this film to shoot in February.  Designated cast includes Lawrence Fishburne, Randy Quaid and Kim Basinger, the participation of each will be pending scheduling coordination issues.

6).    Update on Distribution Partnerships (studio ventures, domestic / international); As mentioned previously, SONY PICTURES HOME ENTERTAINMENT and RANDOM MEDIA / THE ORCHARD are newly added distribution partners for selected titles from Hannover House program suppliers.  These respected and solid partners will help maximize sales of our titles and generate a greater return for the company and our program suppliers.  The SONY relationship includes the opportunity to place Hannover House represented titles into their network of direct distribution divisions in all major territories worldwide.  Medallion Releasing titles will continue to be handled both on a "direct" basis to key accounts in the USA and Canada - as well as through the wholesale participation of Cinedigm Entertainment... including the upcoming (Feb) new release DVD and BluRay copies of BATTLECREEK and BLOODFEAST.

7).  VODWIZ - A separate and detailed update on VODWIZ is planned for next weekend.