Form 10 Review with S.E.C. today

In response to many shareholder emails about "status," here's the update.  A call is set for 2-pm Central Time today with the S.E.C. / Edgar representative that has been assisting Hannover House in the procedural steps to relist as fully-reporting.  The Form 10 document has been completed and will be discussed today to determine if it's ready for filing.  We will post a follow up this evening.  UPDATE:  Received some productive feedback and helpful comments which will be immediately addressed, and the Form 10 will be revised accordingly.  Will post another update when the revised filing is resubmitted.  Nice forward progress towards full restoration of reporting status and natural uplist.

Hot Potatoes!

For the third time in two weeks, Amazon.com is on the verge of being out-of-stock on TOYS IN THE ATTIC again -- despite having alreaady ordered 5-TIMES more units than Hannover's prior best-selling Amazon title ("Turtle: The Incredible Journey").  We just got another big order from them, a nice problem to have!

CUT-&-PASTE INTO BROWSER:

http://www.amazon.com/Toys-Attic-Forest-Whitaker/dp/B009P7K1CG/ref=sr_1_2?ie=UTF8&qid=1358961474&sr=8-2&keywords=Toys+in+the+Attic

UPDATE:  2-minutes after posting this blog note, THEY WERE SOLD OUT AGAIN!!!!

Stop the presses! Big News Scoop!!

For those of you that didn't attend the Shareholder's Meeting, or read the past two OTC filings dating back to January 25, here's a news scoop:  The Hannover House - Bedrock matter was settled, fully documented and executed weeks ago.  I bring this up because some are trying to create confusion about a subsequent court ruling three weeks after the settlement.

There are some people out there (at least one, with multiple alias names) that like to pretend that Hannover House is not a real company, or that there is not an audit in process, or that in general the sky is always falling for this-or-that daily operational reason.  A couple of gleeful posts on internet chat boards yesterday hope that readers will disregard the Jan. 25th Bedrock settlement, and instead focus on the subsequent court ruling last week.  Yes, the judge finally ruled in the matter of dismissing the default judgment, originally slated for Dec. 17, but not ruled on until Feb. 14.   Not that last week's ruling is relevant or legally applicable anymore (because of the settlement with Bedrock), but for what it's worth, the judge ruled against Hannover's motion to set-aside the judgment. 

So everyone "Stop the presses!"  Big news:  Hannover clearly made the right decision in settling the case!

For the rest of us with logical, cognitive thought processes, let me share with you some of the key points of the rationale' behind the Jan. 25 settlement.  HHSE attorneys (Parker and Hankin) provided a cost estimate of how much it would take to "continue" fighting the case if the judge ruled in Hannover's favor, and thus agreed to set aside the default (and "start" the lengthy litigation process).  With significant funding ventures in motion for "Mother Goose" and other corporate activities, the idea of trying to operate under the shadow of the uncertainty of this case appeared detrimental to the company's progress.  With bigger titles in the pipeline, Hannover is now facing opportunities to consumate stronger distribution partnerships.  Having a big, ugly lawsuit lingering on-and-on could have jeopardized these activities.   Conversely,  the company could have spent hundreds-of-thousands of dollars in costly Federal Court litigation, and still risk the possibility of ultimately losing the case. So we settled with Bedrock.  The terms of the settlement were found to be mutually beneficial, and these will be disclosed to the required levels in the Company's year-end filings.

The structure of the settlement (and term pay out) reduces the obligation to a manageable, monthly line-item, and not some big, scary beast of a material threat. 

Would we have preferred that no litigation had ever occured and that no payments were ever to be made to Bedrock?  Of course.  But that didn't happen, so we managed the circumstances in the manner that we felt was in the best interests of the company and our shareholders.  We believe we achieved the best possible outcome.

Will we ever do another financing deal that's structured like the Bedrock venture was?  Hell no!  But we will live and learn, and survive to fight another day.  The company is making money every month from our direct-to-video titles, and taking conservative (non-recourse financing) steps to move into an exciting arena of higher-profile titles.  Our core business is solid enough that we can navigate through issues that for non-revenue producing entities, would be challenging.  The Hannover House corporate goals for 2013 and 2014 include smarter deal making, and a conservative control on financing resources.  Under this mandate, the debt load that has impeded our growth these past two years can become a historic footnote as we grow the company into a bright and sunny new chapter.

Back to work....

Greetings HHSE Friends & Shareholders -- quick memo of activities and updates for this cold and icy day in N.W. Arkansas.

1).  TOYS Re-orders -- Second pressing began shipments yesterday, with product delivered "overnight" to Amazon, Netflix and two wholesalers (already confirmed receipt);  balance to ship today.  WalMart.com and Amazon.com should post as "in stock" by tomorrow;  next placement within WalMart Store locations has been pegged at April 2nd due to prior shelf space commitments that begin next Tuesday.  TOYS is already Hannover's best selling "self-distributed" home video release (and is presently on target to meet or beat 20th Century Fox's sales for "TWELVE").

2).  DARK SKIES -- the Allegheny Film Factory production of "Mothman Chronicles" is being retitled as "DARK SKIES" to avoid confusion that this might be a sequel to a prior Mothman movie;  UPDATE 2-28-13:  We misunderstood director Bob Tinnell when he said that he wanted to change the title of the movie to "something like Dark Skies."  He has not yet picked the new title, and clearly, we will not be using a title of a different film that's currently in release.  The point of changing the title is to address concerns from some of the "A" level cast members that the prior title might sound  like a sequel to the Richard Gere Mothman film from about 10-years ago, which was not intentional.

3).  MANUFACTURING OPPORTUNITIES-- DVD volume at Hannover House has grown so significantly over the past six months that we are considering the financial merits of purchasing our own DVD Manufacturing System (Singulus Spaceline 2);  we welcome shareholder feedback on the idea of streamlining our manufacturing processes, which would also save us 35% or more on the cost-of-goods.  UPDATE 2-28-13:  Shareholders asked more about the COST of this venture and the SOURCE of funding.  The short answer is that Hannover House spent almost five-times the cost of the manufacturing venture in 2012 by paying third-party suppliers for DVD replication copies... so the answer to the second question is: "regular operational funds."  The issues that are still being evaluated include direct costs of new staff for manufacturing duties, power, space and the intangible costs of management time.  On the surface, it looks like the company could cut it's costs by 50% and improve turn-around times. Plus, the equipment becomes a balance sheet hard-asset.

Onward...

Ice & Snow hit N.W. Arkansas!

A stronger-than-predicted winter weather front hit N.W. Arkansas today, with heavy ice and snow dropping power lines and shutting off roadways.  Accordingly, Hannover House released the staff early and closed up the office to enable employees safe time to navigate their way home for the night.  Forecast is for cleared roadways by tomorrow... so we plan to reopen during regular business hours.

Reorder Demand for Toys in the Attic

Initial response to TOYS IN THE ATTIC has been good.  Without breaching the sales-volume confidentiality of our key accounts, we can report that sizable home video reorders have been received from Amazon.com, WalMart (and the VMI Wholesaler managing the WalMart.com site), Blockbuster, Netflix and a surprisingly high demand from three, key library wholesalers.  Both the Amazon and WalMart websites should have replenishment product by Thursday. We can also report that shipments for the DVD's of ZOMBIE WARZ commenced yesterday and will be completed this week, as scheduled for the March 5th street date. More to come as we quantify specific sales results.

Cannes Bound!

Hannover House is taking on a dual-role at this year's Cannes Film Festival!  In addition to our traditional presence as a "buyer" for North American rights, the company will also be exhibiting and selling films directly to international buyers, for the first time in our 20-year history.  Over the past five years, the company has accumulated sales and licensing rights to more than thirty titles, which represent a significant revenue potential once marketed.  We have been hesitant to engage a third-party sales agency or distributor, for a variety of reasons (ranging from "the right market for launch" and the "right product as locomotives" to the obvious desire to maintain control rather than empower a third-party).

However, with significant international activity happening for our higher-end production titles, we determined that the time was finally right to begin sales activities on the company's catalog titles.
The Cannes Film Festival -- and simultaneous "Marche du Filme" market will occur from May 15 to May 26 in Cannes, France.

The Company's High-End, Theatrical Productions Include:

"MOTHER GOOSE!"

"THE LEGEND OF BELLE STARR"

 

"THE MOTHMAN CHRONICLES"

 

The other title offerings will include lower-budgeted (new) features, catalog features and direct-to-video special products.  Having our own, in-house International Sales & Licensing division is yet another milestone achievement towards the Company's goal of growing into a major, independent studio supplier. 

 



http://www.festival-cannes.fr/en.html

Budget Bins drive Catalog Sales for Hannover House

As discussed in our annual Shareholder's Meeting last month, Hannover House is ramping up activities to re-work / re-package / and re-promote the titles from the Company's film and television library.  One of the best methodologies for maximizing catalog revenues is to create thematic multipacks for placement at the WalMart and Best Buy budget bins.  In this respect, we are pleased to announce that our "COWBOYS AND HEROES" pack has been accepted at WalMart!  Stay tuned for release date details as the bin space is allocated for the next placement period.

More Wal-Mart Placements!

March 5:  ZOMBIE WARZ....

April 2:  COWBOYS AND VAMPIRES

April 9:  TURTLE THE INCREDIBLE JOURNEY (Earth Day Promotion)

Form 10 Registration Filing with the S.E.C.

We are pleased to report that our efforts to begin full-reporting with the S.E.C. / Edgar have been resolved, with the preparation and filing of a Form 10 Statement to re-register as a reporting entity.  The Form 10 route was clearly the fastest route to reporting approval, and we thank the helpful team at the S.E.C. / Edgar Department for corporate finance and compliance.  The Form 10 document is being reviewed by HHSE corporate counsel, with the plan to submit it back to the S.E.C. within the next few days.  The S.E.C.'s approval of the HHSE Form 10 will enable periodic reports (including 10Q's and 10K's) to be automatically filed on a going-forward basis.  The reinstatement of reporting status will also automatically elevate the company's OTC status to "QB" and will provide greater security for shareholders.  Thanks for your patience in resolving this matter.

Moviefone.com picks TOYS IN THE ATTIC!

Thank you Moviefone.com / AOL for selecting TOYS IN THE ATTIC as one of this week's top pick movies! With 1.4-million page views EVERY DAY, Moviefone is one of the top film sites in the world.  The TOYS endorsement is active until Thursday night, meaning that upwards of 9.8-million movie fans could see it this week!

http://news.moviefone.com/2013/02/07/weekend-movies-must-watch_n_2638612.html

In a related development, the "Jiri Barta Napude Gallery" link (posted last week to YouTube), has been removed at the request of three major retailers.  They felt that the DVD / Blu-Ray bonus elements should not be publicly available outside of the physical retail product for at least the first sixty days. 

YouTube Short Film on Jiri Barta's animation work for "TOYS IN THE ATTIC"

"Toys in the Attic" -- the English adapatation based on Jiri Barta's acclaimed animated feature, "Na Pude" -- will be released this next week to DVD, Blu-Ray and Video-On-Demand in the United States.  The DVD and Blu-Ray Releases are packed with "bonus" features, including a 25-minute "Making of..." featurette (entitled "The Magical World of Barta") and the 3-minute "Napude Photo Gallery" which is now posted onto YouTube. 

Check it out!

http://www.youtube.com/watch?v=uEoZP8xz8_c&feature=youtu.be

S.E.C. Reporting Status

The FORM 10Q submission to Edgar from Hannover House has been received and approved for content and format.  However, prior to posting by Edgar, Hannover House was assigned on Thursday to work with a compliance director at the S.E.C. to reinstate the reporting status for the Company.  The last filing under the Company's Commission code was in 2005 (under "Mindset Interactive Corporation" -- a predecessor to Target Development Group, Inc., now known as Hannover House, Inc.).  So all of this activity to reinstate reporting status is in motion with the S.E.C. / Edgar Filings Department, and the Company will be able to maintain full reporting status, hereafter.  We expect a timeline on Tuesday for the publication of the FORM 10-Q, and will report back at that time.