Monday, March 30, 2015

2014 - Year End Results - Posting soon to OTC Markets & Edgar

Dear HHSE Friends & Shareholders - With year-end audit season at a fever pitch, and in respect of the work expended to finish the 2012 and 2013 financials for the Form 10, HHSE did not get our 2014 results to the auditor in time to meet the standard deadline (tomorrow).  However, the customary, automatic 15-day extension has been granted, and we will certainly beat that date.  Meanwhile, in respect of shareholder inquiries and interest, below are the following reports covering 2014 activities:

1).  BALANCE SHEETS
2).  INCOME STATEMENTS
3).  SHAREHOLDER'S EQUITY
4).  STATEMENTS OF CASH FLOW

Please note that these year-end results reflect adjustments made following the 2012 / 2013 audits (including changes in capitalization of expenses, realization of officer deferrals, allowances for deferred income taxes and adjustments for net sales vs. gross shipments, as described in the Form 10).  Also, please note that the formatting of this Google-hosted BLOG may have some of the financial columns askew.  Assuredly, the 10k report and financials will align perfectly when published through the appropriate channels.

The 2014 results show a modest increase in both sales and profits over 2013, and both years reflect the "old" business model of only having a limited number of DVD / BluRay releases.  Activity in 2015 for Hannover House - with the locomotive strength of six studios combined under Medallion Releasing - will show a far more robust dynamic and impressive results.

* * * * *

Hannover House, Inc.
Consolidated Balance Sheet
At December 31, 
  2013 2014
ASSETS        
CURRENT ASSETS        
Cash & Cash Equivalents $ 1,476                   16,125
Accounts Receivable, Net   2,713,351              2,878,972
Prepaid Wages   0   0
Merchandise Inventory   166,420                 198,215
Prepaid Advertising                 765,000                 765,000
Prepaid Producer Royalties   1,637,941              2,138,178
Producer Marketing Recoupment   2,398,038              2,217,739
Film Distribution Rights   2,036,379              1,986,379
Film Production Investments   236,633                 243,083
Notes Receivable and Net Recoupment                          -                             -  
         
TOTAL CURRENT ASSETS           9,955,238   10,443,691
         
PROPERTY & EQUIPMENT        
Office Furnishings, Equipment & Film Gear   155,081                 155,081
Less Accumulated Depreciation                 (39,356)                 (39,356)
Vehicles                   22,500                   22,500
Less Accumulated Depreciation                   (5,000)                   (7,500)
Real Property    0   0
TOTAL PROPERTY & EQUIPMENT               133,225   130,725
         
OTHER ASSETS        
FILM & TELEVISION LIBRARY            22,315,337   22,315,337
         
TOTAL OTHER ASSETS            22,315,337   22,315,337
         
         
  $ 32,403,800   32,889,753



LIABILITIES & SHAREHOLDER'S EQUITY
2013 2014
CURRENT LIABILITIES        
Accounts Payable $               148,522                 107,522
Accrued Royalties                 303,829                 220,406
   Acquisition Advances Due                 187,450                   41,000
Accrued Wages   0                   20,760
Payroll Taxes Payable                     5,585                   23,847
Deferred Income Tax Payable                 732,598              1,044,108
NB Cal AFIL P&A Loan                 316,478                 249,306
Hounddog P&A Note (Weinreb)                 731,025                 731,025
       Interest on Weinreb note                 139,437                 200,369
   Graham Financial Service note                   80,000                   80,000
          Interest on Graham note                   11,592                     3,268
Bank of Fayetteville note                   15,000                   15,000
       Interest on B.O.F. note                     3,582                     4,604
         
TOTAL CURRENT LIABILITIES           2,675,098   2,741,215
         
LONG-TERM LIABILITIES        
Long-Term Payables   2,378,991              2,168,536
   TCA Global Master Fund                 300,000                 314,384  
Mortgage Note Payable   0   0
Executive Salary Deferrals   843,561                 488,561
Officer Notes Payable   137,913                 201,455
           
TOTAL LONG-TERM LIABILITIES           3,660,465   3,172,936
         
   TOTAL OF ALL LIABILITIES              6,335,563   5,914,151
         
SHAREHOLDER'S EQUITY        
Common Stock     25,020,646   25,349,493
Retained Earnings   1,047,591              1,626,109
         
TOTAL SHAREHOLDER'S EQUITY            26,068,237   26,975,602
         
         
  $       32,403,800   32,889,753


_______________________________________________________________


HANNOVER HOUSE, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 
  2012   2013   2014
REVENUES  $    2,373,065 $   2,677,061 $   2,802,392
COST OF SALES
Commisions        50,140        10,000             170
Sales and marketing        28,438          9,416        19,836
Video manufacturing        27,148        22,177        43,537
Film and Book Royalties                  -        27,623        83,498
Freight        21,103        12,738          8,199
Other expenses     1,073,901     1,564,403     1,337,760
TOTAL COST OF SALES   1,200,730   1,646,357   1,493,000
           
GROSS PROFIT   1,172,335   1,030,704   1,309,392
GENERAL AND ADMINISTRATIVE EXP.        428,118        330,695        318,744
INCOME FROM OPERATIONS      744,217      700,009      990,648
OTHER INCOME(EXPENSE)                    -              (409)       (100,620)
INCOME BEFORE INCOME TAXES      744,217      699,600      890,028
PROVISION FOR INCOME TAXES        290,245        272,844        311,510
NET INCOME  $       453,972 $      426,756 $      578,518


______________________________________________________________________



Hannover House, Inc.
Statement of Changes in Stockholder Equity
Common Stock Retained
Shares Amount Earnings Total
Balance at December 31, 2012 489,965,532  $     24,951,053  $   620,835  $     25,571,888
                      -               69,593
Net Income            426,756               426,756
Balance at December 31, 2013 583,732,365         25,020,646    1,047,591         26,068,237
                      -             328,847
Net Income            578,518               578,518
Balance at December 31, 2014 663,227,212  $     25,349,493    $ 1,626,109    $     26,975,602

_________________________________________________________________________________


Hannover House, Inc.
Consolidated Statement of Cash Flow
For the year ended December 31,
  2013   2014
Cash flows from operating activities
Net Income $            426,756 $            578,518
Adjustments to reconcile net income
to cash provided by (used in)
operations
Depreciation               (5,000)                        -
Accounts receivable           (926,747)           (165,621)
Inventory             (34,110)             (31,785)
Prepaid advertising                        -            180,299
Producer marketing recoupment            147,569           (500,237) *
Prepaid producer royalties              97,326           (522,447)
Film distribution rights              10,000              40,000
Accounts payable           (317,384)             (41,000)
Weinreb P&A interest             (49,283)             (60,932)
Graham Financial interest               (5,992)                8,324
Bank of Fayetteville Interest                  (969)               (1,022)
Long Term Payables            303,071           (210,455)
Real Estate Mortgage Payable                        -                        -
TCA Global Master Fund           (300,000)             (14,384)
Accrued royalties                6,487              83,423
Deferred income tax payable            272,844            311,510
Accrued wages                8,670              20,760
Payroll taxes due             (22,515)              18,262
Executive salary deferral               (80,000)             (355,000)
Cash used in operations           (469,277)           (661,787)
Cashflows from investing activities
Film production investments              31,450              56,155
Furnishings, Equipment, Truck                1,903             (19,052)
Weinreb / Hounddog P&A note                        -                        -
Graham Financial Services note                        -                        -
Bank of Fayetteville note                        -                        -
Acquisition Advances Payable            428,530            183,717
NB Cal loan (AFIL)             (37,266)             (67,172)
Real Estate Valuation                        -            150,000
Officer notes payable                45,000                83,549
Cash provided by investing activities            469,617            387,197
Cash flows from financing activities
(See Supplemental Information Note)                          -              289,239    
   
Increase in cash                   340              14,649  
Cash, beginning of period                1,136                1,476
Cash, end of period $                1,476 $              16,125
*  Producer Marketing Recoupment includes journal-entry adjustment for unrecouped P&A 
incurred for the release of the film "TWELVE."