MyFlix twin-sister, TUBI, turns down $2-BILLION buy-out offer

Greetings HHSE Friends - Two weeks ago, BLOOMBERG NEWS reported that Fox had turned down an offer to buy its TUBI.TV streaming service for TWO-BILLION DOLLARS.  This should be a huge wake-up call for any HHSE / MYFLIX skeptics - as our business model very closely follows the TUBI plan:  lots of programming, minimal to no licensing fees, little or no advertising, and a "split" of net revenues with the program suppliers.  In fact, the only thing more surprising to skeptics about TUBI's success might be the impressive and impactful TUBI ad purchased during the recent SUPERBOWL broadcast... one of the first major ads ever placed by Fox in support of TUBI. 

For the past three years, HHSE has been hesitant to launch MYFLIX for two primary reasons that may no longer apply:  1). MAJOR TITLES was always a concern for MYFLIX, as the principle of "one chance to make a first impression," suggested that having only independent films could look bad to potential MyFlix users;  and 2).  MAJOR ADVERTISING support was felt to be essential for a successful MyFlix launch.  Well, TUBI's incredible success has shot holes in both of those concerns. 

That said, it is still helpful to have an assortment of major studio titles to supplement the 15,000+ indie titles available to MyFlix. And, some level of advertising and publicity support will help with the launch. But the bottom line on how much money it will take to launch MyFlix has reduced tremendously - as market conditions have evolved. We are in the Golden Age of Streaming Services... and MyFlix is positioned to be a successful brand name option for consumers.

So what does this mean for HHSE shareholders?  It's hard to predict - as so many factors can impact each project and opportunity. But, starting with managements internal forecasts for 2023 - we can begin to build a basis for estimating the company's valuation. On the 2023 revenue projections chart below, we can see the following:

1).  PASSIVE ROYALTIES (V.O.D. from Library) will be modest, approx:  $108,883

2).  PRODUCTION INCOME from original shows and films will be the largest revenue source in 2023 (Production fees, Overhead Fees, Dist. Fees & Profit Shares):  $1,355,740

3).  MYFLIX income will likely turn into positive cash flow by June and will closely follow production incomes, through net revenue share and mastering fees:  $1,133,250

4).  STOCK OFFERING will hopefully generate over $1-mm for the company, about half of which will be used for MyFlix staff / operations / basic marketing:  $450,000

The previous plan to raise up to $8-million for MyFlix through a series of stock offerings seems invalid in the current marketplace. There will not be a major dilution of shares issued, as the needs for the MyFlix launch are only $1-mm or less.

While the 2023 projections are modest revenues, based on the company's low overhead, there should be a significant revenue surplus to enable key judgments to be paid off and most short-term notes to be retired... essentially freeing the company from the burden of old payables management that has cannibalized management productivity. 

Moving into 2024 and beyond - it's not unrealistic to forecast significant increases over the 2023 "launch" results - as services (like TUBI) post an average annual growth of 37.63%.

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After extensive research and analysis, Zippia's data science team found the following key financial metrics. Tubi's revenue growth from 2018 to 2022 is 37.63%.Sep 30, 2022

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So, what does this mean to HHSE shareholders? 

Again, it's speculative and subject to many variables. But the results of comparable businesses suggest a tremendous upside for HHSE. 

In pursuing programming suppliers for MYFLIX, the HHSE management came into communication with a variety of funds, brokers and advisers specializing in media and entertainment stocks. The consensus as communicated to HHSE is that the company is pursuing a viable and successful path, specifically:

a).  REGISTER THE STOCK SHARES - via the Form 10-12(g) S.E.C. filing;

b).  LAUNCH MYFLIX - especially focusing on the "free" Advertiser supported model;

c).  RETIRE JUDGMENTS AND DEBTS as quickly as cash flow enables; and,

d).  DIVERSIFY ASSET BASE THROUGH ORIGINAL PRODUCTIONS - rather than relying upon third-party-owned programming, being involved with cash-flow-positive "productions" balances the MyFlix model and provides an alternative revenue source.

These investors / analysts / traders consider themselves to be "the smart guys" in that their annual R.O.I. results consistently out-perform general market indices. Will the market give HHSE a 34-X price-earnings ratio (consistent with other streaming & media companies)?  Will the market give a 2-X to earnings "goodwill" boost to take into consideration that 2023 represents the launch of MyFlix and not the full operations?  Will HHSE / MyFlix achieve the baseline revenues to support a pre-tax income of $1.385-mm?

Perhaps all three might occur... and if so... the HHSE stock in this model would be trading at around $.17 / share.  Perhaps none of the three would occur at these levels... but even in the worst analytical scenario, there analysist report the widespread expectation that the stock will be at or above $.10 by year's end. 

This is why - for months heading into years - HHSE Management has encouraged shareholders to HOLD or GROW their HHSE holdings, rather than sell prior to the completion of these key endeavors. Penny stocks can offer a tremendous upside... but they can also be the wrong fit for a short-term trader. In the case of HHSE, the "clean-up" of the prior business model (e.g., the collapsed DVD distribution business and an illogical predisposition to ignore meritless litigation), has slowed the company's progress. HHSE has been bullish for years on filing the Form 10 registration AND in launching the MyFlix service. But the company's advisors have prioritized efforts to clean-up the balance sheet, deal with previously ignored legal issues, and to show a solid "going concern" viability before filing the registration.  That's how we got to where we are now:  never taking our eyes off the prize, but working daily to resolve all issues that impact the viability of the registration filing. 

Our current Form 10 task evidences how far we have come. Out of 515 payables accounts, 42 were mis-valued by more than 3% after third party verification. With the corrected balances in hand, the basis for calculating corrected interest, and flowing this through to earnings and equity for each prior reporting period affecting the Form 10 is a clerical level task that shows our proximity to crossing the finish line. Will the HHSE stock "bounce and hold" following the Form 10 filing? Most analysts have told us "YES," as their prediction. Will the stock pop and hold at another level after the MyFlix site is formally launched? Again, most analysts have told us "YES" as a further prediction. Will consumers respond to MyFlix with ONE-TENTH of the revenues as TUBI is enjoying? Well, wouldn't that be incredible? One-Tenth of TUBI annual revenues is still enormous... so it would not take a media analyst to predict that the HHSE / MYFLIX stock would be quite a commodity!

The last few years have been a bit crazy - not just for HHSE, but for the whole media sector. The "old rules" no longer apply, and media executives (like HHSE / MYFLIX C.E.O. Eric Parkinson) have to be faster, harder-working and willing to think outside-of-the-box in order to succeed. That's why Parkinson is not afraid to forge new paths to help put HHSE and MyFlix onto the right track. Over the coming months - some of the creative, unusual  and behind-the-scenes activities that have occurred to support the MyFlix launch will become known - and could become somewhat legendary. This C.E.O. - owner of more than 50-mm HHSE shares - has a personal vision of a $1 share price. And this is the motivation for Parkinson to put in the insane hours and Herculean effort (with no salary) to make it all happen.

So, skeptics be warned, and longs be strong.  Watch what happens - and congratulations to those with the vision and perseverance to remain patient supporters of the HHSE plan. 

HHSE / MYFLIX - 2023 FORECASTED REVENUES SUMMARY

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Hannover House, Inc. makes no representation, warrantee or guarantee that the revenues forecasted by the company for calendar year 2023 hereinabove will be achieved, or that the market's response to the company's revenue performance will meet the expectation of the stock analysts and traders who have provided projections to HHSE management.  This informational blog is meant to provide existing and prospective shareholders with a factual and insightful basis for the determination of the company's current and potential value, and is not meant to serve as investment advice for anyone reviewing this blog. As with all investments, consider your risk potential and seek investment advice from legitimate and licensed professionals. 

Reconcilliation of Payables and Receivables per Third Party Verifications

Greetings HHSE Friends & Followers - the past week for HHSE management has been focused almost exclusively on implementing revisions to the 12-31-2020 and 12-31-2021 financials. This is a newly required step has been required in order to conform with discrepancies between previously reported amounts for payables, judgments and receivables, with the revised balances occurring after third-party verifications.  

Even inconsequential variances from the inadvertent under-or-over-reporting of liabilities and assets - requires revisions to the prior reporting years in order to establish the confirmed baseline values for each balance sheet item. For example, if interest on a judgment debt was accrued at a rate different from the court ordered rate, then this variance will impact accrued earnings and shareholder equity. Conversely, failure to recognize all receivables or to retire accounts payable balances long ago paid-in-full, will also impact earnings and equity.  

There are no issues with the XBRL and other formatting - and there is no special significance to the dates of Feb. 14 or Feb. 15 - mentioned here due to shareholder emails inquiring as such. These are final clean-up steps to assure that the OTC Markets revised filings will match with the Form 10 audited financials.

The best news is that future reporting periods and audits will be simple as compared to the extensive work required to verify starting balances and modify the past three years of prior filings (for both cash-basis as well as third party verifications).  

IN OTHER NEWS - Post-Production is nearing completion on WILDFIRE - with Michael Martin Murphey's original score laid-into the edit assembly, and supplemental "interstitial" mood music now been added.  The final mix and delivery are just a few weeks away... which triggers a significant distribution advance for the benefit of HHSE.

Pre-Launch activities continue for the MyFlix venture - as well as ongoing activities for the major features (Belle Starr, Modern Antiquities and Meltdown). 

Although HHSE news has been quiet recently, it's about to kick into gear, contemporaneously with our Form 10 filing and what many believe should be a meteoric stock response. More to come...

A business colleague in NYC complained recently to HHSE CEO Eric Parkinson that the company's Form 10 Registration had not yet been completed and published. Parkinson asked him how long it took from conception to completion of his 60-story Manhattan building? The message was received: it's easy to do something quickly if you don't care if it's badly done or doomed for failure. But doing things correctly, for lasting value, does take time. 

HHSE moves towards MyFlix launch

(New York, NY) Hannover House, Inc., (OTC:  HHSE), has accelerated actions to launch the MyFlix streaming service, including an aggressive final outreach to major studio and program rights owners to participate in the service. With forty-five suppliers previously committed, the addition of three new major media suppliers provides the final impetus for a consumer launch, said HHSE and MyFlix C.E.O. Eric Parkinson.

 

“The last two years have seen meteoric growth in streaming services, and the momentum is not slowing down,” said Parkinson.  “The MyFlix concept of one-stop consumer access to multiple suppliers and thousands of films has been universally embraced by our supplier studios and rights holders. We are offering a high visibility ‘retail streaming store’ for the merchandising of their programming,” he concluded.

 

The MyFlix service will replace prior business models for Hannover House, which in the past ten years had been built around the distribution of independent films onto DVD, theatres and third-party streaming services. With DVD sales already declining in the pre-COVID years, and with movie theatres shut down for most of 2020 and early 2021, the “in-home streaming” of entertainment programming has taken over as the preferred consumer media delivery methodology. Premium sites such as NETFLIX, HBO Max, Disney+ and Paramount+ have distinctive and profitable market bases. But thousands of independent films are often unavailable for streaming, and market trends show that many consumers prefer ad-supported services or per-transaction options as opposed to the commitment of a large, monthly subscription fee.

 

“We think the advertiser-support version of MyFlix will likely be our most popular option,” said Parkinson. “Consumers have accepted the advertising model pioneered by TUBI.TV as it gives them great access to programming without a monthly bill. We think MyFlix will fit in nicely with the platform options available to consumers.”

 

Consumers will also have the option for a flat-fee monthly subscription on MyFlix, but with access to less than half of the total programming otherwise available on MyFlix.

 

A temporary place-holder web-page for MyFlix.com has been published, with the actual, consumer interactive service being built off-line. Marketing for the launch of MyFlix will include entertainment website link ads, targeted industry publications, social media ads and YouTube promotions to support MyFlix commercials.  "MyFlix" was recently approved by the U.S. Trademark office for an enforceable trademark. Upon launch of the MyFlix site and service, other businesses that have been using a version of the "MyFlix" name will be required to cease infringement on the MyFlix trademark by either stopping their activities or rebranding. 

 

Hannover House is also working on the development of original programming for MyFlix, which Parkinson feels could expand awareness and attract new customers.

 

In other Hannover House news, reconciliation of previously filed year-end reports have been modified to reflect a primary “cash-basis” accounting as reflected in the Form 10-12(g) registration statement prepared for the company’s stock shares. Although the company completed the Q4 financials for the three-months ending 12-31-2022, the OTC Markets requirements for a full year-end report have delayed the release of the Q4 results until the prior quarters for calendar year 2022 have been modified to match the primary cash basis accounting. This process is expected to take between one and two weeks at which time the full 12-31-2022 results will be released and the prior quarterly filings will be amended. This reconciliation and modification of prior reporting periods is considered the “final step” required for completion of the Form 10-12(g) registration statement and the applicable professional opinion letters from counsel and auditors.  

 

Production continues on the historic western, “The Last Days of Belle Starr” – which is on target for final submission on March 11 to the Cannes Film Festival for competition consideration. Post-Production on “Wildfire: The Legend of the Cherokee Ghost Horse” continues, with the original music score (by Michael Martin Murphey) punctuating scenes and adding a timeless panache.  Three new feature productions are planned for 2023, including the feel-good drama “Modern Antiquities” and a major holiday feature that HHSE believes contains evergreen elements to make it a repeat-viewing title for years to come.

 

“We have evolved our business model to create sustainable, profitable and synchronous activities in our production of original feature films and with the MyFlix streaming service,” concluded Parkinson. “We understand the enthusiasm of many shareholders and media observers for the success that MyFlix and Hannover House are positioned to achieve for the immediate future and next few years.”   

 

For More Information Contact:  ERIC PARKINSON, 818-481-5277, EnterLinkMedia@gmail.com  or Eric@HannoverHouse.com

HHSE - New OTC Markets Filings / Q4 / Form 10 and more...

Greetings HHSE Friends, Followers and Shareholders - Happy New Year, and may the coming days and month bring great joy and success to HHSE and to our Shareholders. 

There will be a significant OTC Markets / S.E.C. Form 8 Information posting tomorrow (Tuesday, Jan. 3, 2023), including information on our Q4 Year-End report and OTC Market filings. 

The brevity and vagueness of tonight's pre-blog will be better understood tomorrow.

We hope that everyone is healthy, rested and ready to make this new year the best year ever for HHSE.  Meanwhile - the statement that "Art imitates Life" has never been more ironic and on target as to look at where HHSE now, and compare it to our recently shot "Oklahoma Land Rush" sequence for THE LAST DAYS OF BELLE STARR. Back in 1889, two years after the Dawes Act was passed, the decision was made to give-away the unallocated and "underutilized" land within the Indian Territory: 90-million acres of land that Senator Henry Dawes and Congress inaccurately declared as being "of limited value."  Was the land truly of limited value? Hardly - as this massive real estate give-away quickly became the impetus for the creation of mega-empires, including much of the foundational wealth for the Carnegie, Rockefeller and Phillips families.

Stay tuned....

(Selected photos from the LAND RUSH sequence - purposely showing only a hint of the epic scale of the sequence):

Ecstatic with how FANTASIC the "Wildfire" Movie turned out!

As we move into "delivery" mode for the WILDFIRE movie to our major studio distribution partner, it's exciting to see how well the final movie turned out!  As many shareholders know, the film was forced into a shut-down mode for almost two years due to the COVID pandemic and talent scheduling issues... and then the film had to be re-shot in 2021 and 2022 to accommodate "changing looks" for the teenaged and pre-teen performers over the two-year delay!  Quite an ordeal.  But the final product is what matters - and there's no doubt that we earned our "major studio" distribution status with this production!  The distribution advances are significant - and these funds will pay off HHSE debts and settlements.  But, we would be surprised if the film does not generate significant royalty "overages."  It's simply that good!

"WILDFIRE" is one of three, simultaneous major ventures for HHSE... the other two being our imminent Form 10 registration and our MyFlix site launch... the "holy trinity" of major, corporate achievements.  And it's all in motion right now, when so many of us could appreciate a big boost going into the new year.

One of the Major Studio delivery issues is to provide approved images from the film for potential use in poster art, packaging and ads. Below are 100+ images that are part of our publicity images delivery package, provided herein for shareholder review.  Lots in motion, very exciting times...

Happy Holidays / Hanukkah / Merry Christmas & New Year from your friends at HANNOVER HOUSE!

HHSE Updates Dec-1, 2022

Greetings HHSE Friends - What a simple pleasure to be returned to the world of the living - after seven days of COVID hell that hit HHSE C.E.O. Eric Parkinson. Despite having two vaccines and two boosters, the newest variant of this virus hit him like a freight train on Thanksgiving, requiring hospitalization, supplemental oxygen and lots of rest.  The fever broke on Tuesday, and although he is still testing "positive" - Parkinson is back at work again.  The new reality is that we will all have to get used to living with COVID as new variants emerge. So, please be safe out there!  

As requested by some longs, listed below is a short summary of the current status of key issues of interest:

1).  FORM 10 - Write-ups have been updated to reflect the current status of settlements and ventures. There are some legal, tax and audit costs still being juggled, but these do not pose a threat to the timely release of this registration.

2).  WILDFIRE - Picture editing continues on a parallel path with the music edit (from the original soundtrack by Michael Martin Murphey), and sound editing. The film looks fantastic and we believe that this truly sets the bar for HHSE to facilitate future productions.  Despite internet trolls inventing release dates (and posting them to IMDB), there is not a formal release date yet publicly announced. 

3).  LAST DAYS OF BELLE STARR - The film's formal submission for competition at Cannes was made yesterday. The acceptance will be conditioned upon delivery of a rough-cut assembly to the festival team by March 11, 2023. If accepted, the film is expected to premiere at Cannes (fully completed / fully mixed) on May 23, 2023... as one of three "pro-Indigenous-themed" features. 

4).  PRODUCTION FINANCING VENTURE - HHSE is finalizing a venture with an investment group for $5-million as a "production fund" for HHSE-facilitated productions, to bridge those portions of major features otherwise not covered by Incentives or Presales. This off-balance-sheet fund will be a powerful tool for HHSE to help move high-profile features into production - which will feed the MyFlix service as locomotives (and in some cases, "exclusives").  There is no stock-conversion option or stock dilution impact to the manner in which this off-balance-sheet financing is being structured.

5).  MYFLIX - Titles continue to be added to the revamped (unpublished) website; promo ads and videos will be ready by mid-December at which time the company will determine the marketing launch for the site. The timing of the MyFlix launch is likely to support the momentum from the Form 10 filing - as opposed to distract - so, the company is coordinating both of these major items to be in synch.

6).  OFFICER SHARES - During the 90-day period from Feb. 1, 2023 to April 30, 2023, HHSE C.E.O. Eric Parkinson will have an active Form 4 blind sale of stock shares conducted under S.E.C. Rule 10b5-1, and administered solely and exclusively by a registered broker. This registered sale of 7.5-million officer shares will have a minimum sale price of $.035 / share and a maximum daily volume of 10% of the total stock transactions per day.  This advanced notification to shareholders is intended to eliminate any false narratives that investors were not provided sufficient, prior notification, or that the C.E.O. is divesting. Parkinson has not sold any HHSE officer shares since November 2013 - approximately ten years.  If for any reason the share price does not meet the minimum sale floor of $.035 during this offering window of time, then the broker will not be empowered to sell any of the shares. 

7).  STOCK PROMOTION / INVESTOR RELATIONS - As requested by key shareholders and advisors, over the past two years, HHSE has kept a low profile in terms of general publicity outreach. The consensus was that the promotion of activities would fall on deaf-ears until the registration is filed, and/or the launch of MyFlix. Accordingly, the release of news and publicity items supports the company's overall credibility boost from the registration, and each news item can achieve a positive impact. It is the company's goal to create tremendous publicity chatter, awareness and interest in the next few weeks - in part due to the large number of traders with extra time over the holidays - but also in general support of the completion of these key ventures. 

 

The dark before the dawn....

Greetings HHSE Friends & Followers - Management received quite a few emails over the weekend from shareholders who were concerned about a "big seller" of HHSE stock on Friday (over 8.5-mm shares), and whether this represented something more than bad-timing or tax loss planning for the seller?

The company will not be able to verify the seller for several weeks (requires running a shareholders list report, which usually involves Broadridge review). But we were informed that this was indeed a former "long" with tax issues for 2022.  "The absurdly low price at present for HHSE assisted a tax situation" which does not make great sense in terms of timing (except that there would be no tax loss if the sale were made next month / post Form 10).  Most investors would rather sell post Form-10 and just pay the capital gains tax.

Regardless, we may be in the season of some tax loss sales... which may be a lucrative early holiday present for those in a position to buy at the current, absurdly low price. 

Management has also been asked about "Investor Relations Outreach" - which some feel will generate fresh attention to the value of HHSE. We agree... but we also feel that the timing of such activities is best when timed with our Form 10 filing (and other material news, such as: Delivery of WILDFIRE, Major Cast filming in BELLE STARR and the Launch of MYFLIX). Investor Relations Outreach PRIOR to any of these key achievements would have limited impact to supporting the company's credibility.

The change-over from Daylight Savings Time reminds one of the popular adage that "it's often darkest before the dawn." We're in the final days for the completion of each of these corporate endeavors - and if HHSE were allowed to buy-back our stock off the open market, we would be doing so. As the Price Per Share may still see some wild fluctuations pre-Thanksgiving, all we can advise is that when the price is down, the only losers are the sellers... not those who push for that extra few yards to cross the finish line...

More to follow...

HHSE is fielding licensing offers from International Buyers for "WILDFIRE" - including Germany, France, Italy, Spain, U.K., Poland (and surprisingly, RUSSIA, which market still has great demand for new programming). The ANNE HECHE music video tribute has worked well as a teaser-trailer to show scenes from the movie.

(Link to IMDB Music Video Trailer - WILDFIRE / ANNE HECHE)

https://www.imdb.com/name/nm0003826/?ref_=nv_sr_srsg_0