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.

GO HHSE!

General Update - Sunday, Sept. 24

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

1).  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.

2).  CRIMSON FOREST Update - this is their final week. If we are unable to receive the needed istoric 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.

3).  "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...

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!!

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.




b).  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).

c).  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.

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!!

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.