NOTE: The posting of this Form 10 document is provided as a courtesy to HHSE Shareholders; formatting, pagination and other exhibit layouts will vary from the document that MacReport Media is uploading to the S.E.C.; the changes made for the purpose of posting to this blog were required, cosmetic adjustments to fit the formatting requirements of this Blog, and the requirement that all graphics and tables be converted into JPEG for posting.
By the way, the parties that attended the Shareholder's Meeting on Saturday and were given the opportunity to peruse through the full Form 10 filing, each agreed to a non-disclosure and non-trading hold-back until the Form 10 was generally published for others to see this morning. The supplemental exhibits - including the Articles of Incorporation, the By-Laws and Amendments, and the credit facility descriptions were not presented at the Shareholder's meeting. In response to the issue of our credit facilities, the resources for the Company include three ventures, one for manufacturing, one for production and one for marketing / P&A costs. The statement in the Form 10 that the Company does not have a general line of credit is accurate to the extent that the fundings made available through these credit arrangements are project / category specific, and are not available for general use. These funding mechanisms have been established to build momentum for the Company's new release activities, and higher profile projects; these resources are not available to the Company for general use, such as payables or debt management, which ostensibly will benefit from the relief of cash resources otherwise needed for such forward-moving activities.
* * * * *
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM
10
_____________________
GENERAL
FORM FOR REGISTRATION OF SECURITIES
PURSUANT
TO SECTION 12(b) OR 12(g) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Hannover House, Inc.
(Exact name of registrant as
specified in its charter)
_________________
Wyoming
|
000-28723
|
91-1906973
|
(State
or Other Jurisdiction
|
(Commission
|
(I.R.S.
Employer
|
of
Incorporation or Organization)
|
File
Number)
|
Identification
No.)
|
1428 Chester Street, Springdale, AR 72764
(Address of Principal Executive Offices) (Zip Code)
(Address of Principal Executive Offices) (Zip Code)
479-751-4500
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
f/k/a
"Target Development Group, Inc."
f/k/a
"Mindset Interactive Corp."
330
Clematis Street, Suite 217, West Palm Beach, Florida 33401 (561) 514-0936
(Former name or former address and former fiscal year, if changed since last report)
(Former name or former address and former fiscal year, if changed since last report)
_________________
Securities to be registered pursuant to Section 12(b) of the
Act:
Title
of each class Name
of each exchange on which
to
be so registered each class is to be registered
NONE Not
Applicable
Securities to be registered pursuant to Section 12(g) of the
Act:
Title
of each class Name
of each exchange on which
to
be so registered each class is to be registered
Class "A" Common Stock, par value
of $.001 per share OTC
Markets
Class "B" Preferred Shares, par
value of $.001 per share OTC
Markets
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes o No þ
Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site,
if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such
files). Yes o No þ
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company.
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company þ
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes o No þ
EXPLANATORY
NOTE
Company is filing this General Form for Registration of
Securities on Form 10 to register the Company’s Common Stock (“Common Stock”)
and Preferred Stock (“Preferred Stock”), par value $0.001 per share pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Once this registration statement
is deemed effective, Company will be subject to the requirements of Regulation
13A under the Exchange Act, which will require Company to file annual reports
on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K,
and to comply with all other obligations of the Exchange Act applicable to
issuers filing registration statements pursuant to Section 12(g) of the
Exchange Act. Unless otherwise noted,
references in this registration statement to the “Registrant,” the “Company,”
“we,” “our” or “us” shall mean Hannover House, Inc., and its related divisions
and entities as described and defined hereunder.
FORWARD-LOOKING STATEMENTS
This
disclosure statement and filing contains
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. In some cases you can identify forward-looking
statements by terms such as “may”, “intend”, “will”, “could”, “would”,
“expects”, “believe”, “estimate”, or the negative of these terms, and similar
expressions intended to identify forward-looking statements. These
forward-looking statements reflect our current views with respect to future
events and are based on assumptions and are subject to risks and uncertainties.
Also, these forward-looking statements present our estimates and assumptions
only as of the date of this disclosure statement. Except for our ongoing
obligation to disclose material information as required by federal securities
laws, we do not intend to update you concerning any future revisions to any
forward-looking statements to reflect events or circumstances occurring after
the date of this disclosure statement. Actual results in the future could
differ materially and adversely from those described in the forward-looking
statements as a result of various important factors, including the substantial
investment of capital required to produce and market films and television
series, increased costs for producing and marketing feature films, budget
overruns, limitations imposed by our credit facilities, unpredictability of the
commercial success of our motion pictures and television programming, the cost
of defending our intellectual property, difficulties in integrating acquired
businesses, and technological changes and other trends affecting the
entertainment industry.
CURRENT STOCK STATUS
The Company’s stock is currently traded on
the OTC “Pinksheets” Markets under the trading symbol: HHSE.
The Cusip number for the Company is:
410686 101. The following is
true and correct, per our transfer agent, as of and at the period ending on January 1, 2015:
a. Total Common Stock Shares in issue as of January 1, 2015: 663,227,212*
b. Above Shares Restricted From
Sale: 99,560,595
TOTAL
COMMON STOCK SHARES IN ISSUE: 663,227,212*
c. Series “A” Preferred Shares: 3,000,000
Shareholders of Record: 183 (Standard
Registrar count)
Total Beneficial Shareholders: 346 (Broadridge, ICS count)
Total Authorized Common Stock Shares: 700,000,000 / Total Authorized Series
“A” Preferred Shares: 10,000,000
* Includes
10,000,000 Common Stock Shares (issued
to TCA Global Master Fund) subject to return to treasury stock.
Company is
authorized to issue up to 700,000,000
shares of Common Stock; any corporate action to increase the
total amount
of Common Stock beyond this level requires the approval of a majority of the
shareholders.
The purpose
of this Form 10 12(g) Registration Statement is for the Company to Register
the above Common
Stock and
Preferred Shares with the Securities and Exchange Commission.
|
The Transfer Agent for the Company’s stock is:
Standard Registrar & Transfer Company, Inc.
12528 South 1840 East
Draper, UT
84020
Tel. 801-571-8844 / Fax 801-571-2551
Item 1.
|
Business
|
2
|
Item 1A.
|
Risk Factors
|
8
|
Item 2.
|
Management Discussion & Analysis
|
9
|
Item 3.
|
Properties
|
12
|
Item 4.
|
Security Ownership of Certain
Beneficial Owners and Management
|
12
|
Item 5.
|
Directors and Executive Officers
|
12
|
Item 6.
|
Executive Compensation
|
13
|
Item 7.
|
Certain Relationships and Related
Transactions, and Director Independence
|
13
|
Item 8.
|
Legal Proceedings
|
13
|
Item 9.
|
Market Price of and Dividends on
the Registrant’s Common Equity and Related Stockholder Matters
|
14
|
Item 10.
|
Recent Sales of Unregistered
Securities
|
14
|
Item 11.
|
Description of Registrant’s
Securities to be Registered
|
14
|
Item 12.
|
Indemnification of Directors and
Officers
|
15
|
Item 13.
|
Financial Statements and
Supplementary Data
|
F1-F16
|
Item 14.
|
Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
|
16
|
Item 15.
|
Financial Statements and Exhibits
|
17
- 21
|
Item 1. Business. (Information as required by Item
101 of Regulation S-K, §229.101)
This registration
statement was voluntarily filed pursuant to Section 12(g) of the Securities
Exchange Act of 1934, in order to comply with the requirements of the OTC
Markets, Over-the-Counter QB, often called "OTCQB". This Registrant's
common stock is presently quoted on the OTC Pinksheets under the ticker symbol
“HHSE.” The requirements of the OTCQB
are that the financial statements and information about the Registrant be
reported periodically to the Commission and be and become information that the
public can access easily. This issuer wishes to report and provide disclosure
voluntarily, and will file periodic reports in the event that its obligation to
file such reports is suspended under the Exchange Act. If and when this 1934
Act Registration is effective and clear of comments by the staff, this issuer
will be eligible for consideration for listing on the OTCQB.
Hannover
House, Inc., is a registered corporation in the State of Wyoming, and is
primarily engaged in the distribution of home entertainment products –
including pre-recorded movies onto DVD and BluRay disc formats – as well as
book publishing and film rights licensing.
A more detailed description of the Company’s history and business
activities are contained hereunder.
The
corporate history of the Company chronicles two separate entities that were
functionally merged in a stock-for-stock swap exchange which occurred in December
2009. The first entity is Truman Press,
Inc, d/b/a “Hannover House,” the operating entity that was originally
incorporated in the State of California in 1993 (“Hannover House”). Hannover House was launched in 1993 as a book
publisher, and operated continuously in that industry until 2002, at which time
the product line of pre-recorded DVDs was added. Within the first year of operations in the
DVD market, the Company had emerged as one of the top independent supplier studios for Wal-Mart Stores, Inc.,
and sales of DVDs had surpassed revenues from the Company’s book publishing
activities by a factor of more than ten-to-one.
The Company has since built a film library containing more than 220
feature film and video titles for the DVD marketplace. Over the past 12 years, since adding DVD
products, the Company has also expanded the media outlets for films and television
programming, and now distributes to theatres, television, video-on-demand and
to international licensors. The Company
continues to remain active in book publishing, including ebook editions.
The second
entity for which a historic overview is merited is Mindset Interactive
Corporation and its successors, including Target Development Group, Inc.
(“Mindset / TDGI”). At the time of the
stock-for-stock swap and merger of Hannover House and Mindset / TDGI in
December, 2009, TDGI had been operating and trading as an unregistered security
on the OTC Markets Pinksheets Exchange under the ticker symbol “TDGI.” Previously, Mindset /TDGI had been a fully
registered security with the Securities and Exchange Commission as of March 15,
2000. After operating as a fully
reporting and registered security for more than five years, on August 15, 2005,
Mindset / TDGI filed a Form 15 with the Securities and Exchange Commission (“Notice of Termination of Registration”). Mindset / TDGI continued to operate as an
unregistered, non-reporting entity for the next four years, participating in
the development and licensing of computer software and in the real estate
marketplace, holding title to real properties in Connecticut. In
December, 2009, Mindset / TDGI and Truman Press, Inc., d/b/a “Hannover House” agreed
to a stock-for-stock swap, at which time, the directors and managers of Truman
Press, Inc., d/b/a “Hannover House” were elected to become the directors,
officers and principal managers of the combined entity, and the prior officers,
directors and managers of Mindset / TDGI resigned.
Since
December, 2009, Mindset / TDGI has been managed by the Hannover House
principals, namely Eric F. Parkinson as Chairman and Chief Executive Officer,
and D. Frederick Shefte as President.
From December 2009 until the date of this filing, the Company has
continued to file voluntary reports with the OTC Markets in order to comply
with the requirements for “current reporting status” under the OTC Pinksheets
regulations. Voluntarily filed reports
by the Company have included all required quarterly and annual financial
disclosures, along with compliance and disclosure filings required by the OTC
Markets.
In April,
2012, in order to reduce confusion in the marketplace about the brand identity
of Company’s product lines, and to streamline investor identification of the
Company’s securities, the Company applied to FINRA for a name change and ticker
symbol change. Effective April 3, 2012,
FINRA approved and formally acknowledged the Company’s requested name change
from the prior registration of “Target
Development Group, Inc.” (“TDGI”) to Hannover House, Inc., (“HHSE”). Due to a typographical error in FINRA’s
announcement of the official name change, some trading sites have misspelled
Hannover House with only one “n” in Hannover, e.g., “Hanover House, Inc.” However, all filings by the Company at all
times have listed the proper spelling of the Company name, and for the purpose
of this Registration Statement, all mentions of the Company hereunder as
“Hannover House, Inc.” shall refer to the entity which is listed in some
financial websites as “Hanover House, Inc.”
(a). In
the past five years, Hannover House has expanded its release activities in the
domestic (North American marketplace) with movies and television programs onto
prerecorded DVDs and BluRay units. In
2009, the Company had a library of approximately 150 movie titles, and was
adding and releasing about 12 titles each year.
The Company’s Library of Film and Television properties has since grown
to more than 220 titles licensed under exclusive agreements, with over 100
additional titles under non-exclusive distribution agreements. During 2012, the Company released 11 titles
to DVD and / or BluRay. During 2013, the
Company released 6 titles to DVD and / or BluRay. During 2014, the Company released 6 titles to
DVD and / or BluRay. During 2015, the
Company expects to significantly increase its output of DVD and BluRay
releases, under a new, multi-studio sales venture, Medallion Releasing, which
is described in greater detail hereunder.
The Company believes that its significant expansion of new release
titles and catalog / library promotions will result in a significant
improvement in gross revenues and profits for 2015 and 2016.
Over the
past five years, the Company has launched activities to expand the media
outlets carrying or exhibiting Company’s programs. In 2010, the Company released the feature
film “Twelve” to 210 theatres across the U.S.A., and has since released ten
additional films to theatres. The
Company also launched video-on-demand agreements with Netflix in 2010, and has
since licensed twelve titles for digital streaming via Netflix under a subscription
video-on-demand contract. In 2014, the
Company launched sales activities to obtain international licenses for current
and upcoming productions, and in 2015, the Company will activate a new
video-on-demand streaming service, VODwiz, that will make thousands of feature
films from a wide variety of suppliers – including many hard-to-find titles –
available for consumers to stream via the internet or via O.T.T. devices
(including ROKU) or APPs.
(1)
Corporate
& Principal Filing History of Entities.
a.
Sept. 1993
– Truman Press, Inc., d/b/a “Hannover House” was incorporated in California in
1993;
b.
Mar. 2000
– Ecklan Corporation (Texas) files Form 10 SB Registration (predecessor entity
to Mindset Interactive and Target Development Group, Inc);
c.
Aug. 2005
– Mindset Interactive files Form 15, Termination of Registration;
d.
June 2008
– Truman Press, Inc. reregisters in the State of Arkansas
e.
Dec. 2009
– Shareholders of Mindset / Target Development Group, Inc., and Truman Press,
Inc. agree to a stock-for-stock swap, effectively merging the entities and
leaving Truman Press, Inc. (“Hannover House”) as the managing entity. Company maintains current reporting status
with OTC Pinksheets requirements by filing period financial reports and
disclosures.
f.
Apr. 2012
– FINRA approves Company’s proposal for official name and ticker symbol change
to: “Hannover House, Inc.” HHSE.
g.
Feb. 2015
– Hannover House, Inc. files Form 10-12g Registration Statement with the S.E.C.
(2)
Registrants.
The name of the entity filing this Form 10-12g
Registration Statement is Hannover House, Inc., a Wyoming registered
corporation. References to the name
Hannover House, Inc. hereunder shall mean the combined entities and operations
inclusive of those additional corporations that are wholly owned or effectively
controlled by Hannover House, Inc., including but not limited to: Bookworks, Inc. (Arkansas), Truman Press,
Inc. (Arkansas), Medallion Releasing, Inc. (Arkansas) and VODWIZ, Inc.
(Wyoming). The Registrant, Hannover
House, Inc., has been operating continuously since 1993 and has been operating
as an unregistered security on the OTC Pinksheets exchange since December,
2009. The Registrant desires to obtain
approval by the Securities and Exchange Commission of this Registration filing
in order that the Company’s shares can be listed on the OTC Markets QB
exchange, as well as to generally comply with the disclosure requirements of
the Securities Act of 1934.
(A) Plan of Operation. The
Company’s ongoing Plan of Operation is to maintain its existing activities in
the home entertainment markets, and to expand such activities by increasing
both the number of titles being released each year as well as reaching
additional media platforms and markets for entertainment products. Further detail of the Company’s Plan of
Operation is included within this Form 10 filing, including on the Exhibits.
(B) Current Fiscal Year. During
calendar year 2015, the Company plans to release a record number of titles to
the DVD and BluRay markets; this
enhanced release activity has already commenced, with seven new release titles
shipping in December (2014) and January (2015) for sale via major USA Retailers
during the month of February, 2015. The
Company plans to release approximately fifty-five (55) new release titles onto
DVD or BluRay during the current year, along with approximately forty (40)
titles being reissued, repackaged or repriced as catalog or budget
promotions. Additionally, during the
current fiscal year, the Company will be launching a consumer-oriented
“Video-On-Demand” streaming service entitled “VODWIZ.” Other activities for the Company during the
current fiscal year include production activities on several high-profile
feature films, including “Mother Goose: Journey to Utopia”, “ShadowVision”, and
“The Legend of Belle Starr” and the subsequent theatrical release activities
supporting such higher profile titles.
(1)
Cash
Requirements. The cash required for the Company to satisfy
its core DVD and BluRay releasing activities as described above shall be
primarily self-generated from cash flow resources. The cash required for the Company to pursue
and otherwise complete the productions of the high-profile feature films listed
above shall be generated through a variety of third-party methodologies not
directly impacting the Company’s cash flow (including the monetization of
international presale contracts, State and Federal Tax Rebates and other
incentives, private equity investments, and supplier / vendor deferrals). The cash requirements for the Company to
launch the VODWIZ consumer Video-On-Demand streaming service are detailed in
this Form 10 filing, and are expected to be self-funded through cash flow
resources.
(2)
Research
& Development. Not applicable to Registrant.
(3)
Acquisition
of a Plant or Equipment Capacity. During the
current fiscal year, Company plans to expand its ability to manufacture DVD’s
in-house at its principal location of business.
The costs for such expansion of manufacturing capabilities are expected
to be self-funded from cash flow resources; the benefits of expanding the Company’s
in-house product manufacturing capabilities are to result in an overall
reduction of unit costs and a reduction in inventory (as the Company will be
capable of manufacturing more closely to short-term needs).
(4)
Anticipated
Changes in Number of Employees. During the
current fiscal year, Company anticipates adding approximately six (6) employees
to the current roster of eight employees.
As of the date of this filing, the Company had six (6) full-time
employees and two (2) part-time employees.
Full-time positions include C.E.O., President, V.P. of Sales, Director
of Marketing, Bookkeeper and Office Manger.
Part-time positions (30-hours or less per week) include Production
Supervisor and Warehouse Manager. Areas
of new staff support anticipated to be added during 2015 include VODWIZ
operations, Theatrical Bookings, Sales and Marketing support and accounting.
(5)
Other
Material Areas. Not Applicable to Registrant.
(b) Financial Information about
segments. Detailed and audited
financial statements for the Company covering the full fiscal years ending
12/31/2012 and 12/31/2013 are included in this Form 10 filing. Additional, unaudited financial data covering
the Company’s activities for the full fiscal year ending 12/31/2014 are also
included in this filing. Applicable
notes, discussions and analysis of the Company’s financial reports are included
in this filing and subsequent discussion.
(c) Narrative description of
business.
(1) The
following discussion should be read in conjunction with the audited consolidated
financial statements and related notes to the audited financial statements
included elsewhere in this report. This discussion contains forward-looking
statements that relate to future events or the Company’s future financial
performance. These statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements. These forward-looking statements are based largely on
Company’s current expectations and are subject to a number of uncertainties and
risks including the Risk Factors identified in prior Quarterly Form 10-Q
filings and other disclosures posted to the OTC Markets website. Actual results
could differ materially from these forward-looking statements. Hannover House,
Inc. is sometimes referred to herein as "we," "us,"
"our" and the "Company."
The nature of the
issuer’s business
is driven by the operating entity, Hannover House, which is a full-service
producer and distributor of entertainment products (i.e., feature films for theatrical, video, television and international
distribution, and a publisher of books).
Hannover
House, Inc., is a Wyoming Corporation.
Truman Press, Inc., d/b/a “Hannover House” is an Arkansas Corporation.
Hannover
House, Inc., f/k/a Target Development Group, Inc. (which was also formerly
known as "Mindset Interactive Corp.") was registered as a corporation
in Wyoming on January 29, 2009. Truman
Press, Inc., d/b/a “Hannover House” was registered as a corporation in
California on September 15, 1993, and re-registered in Arkansas effective June
2008. The Ecklan Corporation, registered
on March 25, 1998, in the State of Texas, was the predecessor entity to Target
Development Group, Inc.
The
Company, Hannover House, Inc., as well as Truman Press, Inc., d/b/a “Hannover
House” each have an effective fiscal year-end date of December 31.
Neither
the Company, Hannover House, Inc., nor the operating entity, Truman Press,
Inc., d/b/a “Hannover House” have ever been in bankruptcy. To the best of management’s knowledge, no predecessor
entity has ever been in bankruptcy.
In
December, 2009, and effective as of January 1, 2010, Target Development Group,
Inc., acquired all of the shares of Truman Press, Inc., d/b/a “Hannover House”
in a stock-swap agreement. The details
of this acquisition venture are described in detail within the information
statement posted on the OTC Markets Disclosure Statement of December 14,
2009.
Business of
Issuer
-- The SIC Codes most closely conforming to the Company’s business activities
are: 7822 (Services – Motion Picture
& Video Tape Distribution) and 2731 (Books:
Publishing). The Company is
currently operating. At no time has the
Company ever been a “shell company” as defined in the guidelines.
Through
the operating entity of “Hannover House,” the Company is actively involved with
the production, acquisition and distribution of entertainment products into the
USA and Canadian markets, including theatrical films, home video releases,
rights licenses of films and videos to Video-On-Demand platforms and
television, as well as book publishing (including printed editions and
electronic “E-Book” formats).
FILMS &
VIDEOS
– Most of the film and video titles that are distributed by the Company are
“acquired” or otherwise licensed from third-party suppliers, often production
companies or media companies seeking to expand their income and market reach
through a relationship with Hannover House.
Some of the properties distributed by the Company are “sales agency” ventures, in which the
Company performs certain sales & marketing functions on behalf of the
owners of the properties, as opposed to having the Company actually purchase or
otherwise license rights into the property.
Historically, most of the titles sold by the Company were under such “sales agency” ventures. However, beginning in 2010 with the merger of
Hannover House and Target Development Group, Inc., the Company has been moving
away from “sales agency” ventures and
pursuing actual rights-licensing / acquisition structures for new titles. Examples of “sales agency” titles would include “Grand Champion” from American Family Movies; examples of rights-licensed titles would
include “Twelve” from Gaumont and “Turtle: The Incredible Journey” from
Sola-Media. The Company benefits from rights-licensed
titles over sales-agency titles in a variety of ways: a).
the fees to the Company are usually higher under rights licenses,
b). the duration of the terms of
representation rights are usually longer for rights licenses, and c).
titles falling under rights-licenses provide the Company with additional
balance sheet and collateral benefits.
BOOKS / E-BOOKS – The Company
remains active in the acquisition and licensing of publishing rights to printed
books and e-Books. The gross margins earned
by the Company in the release of Books are generally much higher than the
margins derived from the release of Film and Video properties; however, the
upside revenue potential for books is usually not as high as the potential for
Films. So the Company seeks to maintain
a balance in its release slate of high-margin book properties, with
high-revenue Film and Video properties.
The
use of the term "Company" refers to the combined entities, as
reported on a consolidated basis, of Hannover House, Inc., Truman Press, Inc.,
d/b/a “Hannover House” and Bookworks, Inc. (a special purpose entity utilized
for Screen Actors Guild activities and productions), as well as the newly formed entities VODWIZ,
Inc. and Medallion Releasing, Inc. Each
of the corporate entities files separate income tax returns with the federal
government and respective states of registration; however, financial statements and reports, as
of January 1, 2010, refer to the combined and consolidated results of all
entities. Hannover House, Inc. is the
publicly-traded entity for all operating divisions. Truman Press, Inc., d/b/a “Hannover House” is
the operating and releasing division entity for all consumer products. Bookworks, Inc., is a special purpose entity
established for the servicing of book and publishing ventures, and more
recently, used for Screen Actors Guild productions.
The nature of
products and services offered:
A.
The
principal products of the Company, and their respective markets are:
i.
Theatrical
films – released to theatres in the United States
ii.
Home
Video Products (DVDs, Blu-Rays, Digital Copies) – released to video specialty
retailers, mass-merchandisers, bookstores, schools, libraries and rental
outlets (including kiosks) in the United States and Canada;
iii.
Video-On-Demand
releases – films and videos offered for direct ‘in-home viewing’ by consumers
via a variety of service providers.
iv.
Books
and E-Books – sold through bookstores, schools, libraries, internet retailers
and streamed through a variety of e-Book platforms.
B.
The
primary distribution methods used by the Company for all consumer product goods
can be categorized as: “two-step
wholesale” distribution (wherein the Company sells its products to an
authorized wholesale distributor, which in turn, resells the products to
retailers or consumers) and “direct distribution” wherein the Company sells its
products directly to consumers or directly to the end-user retailer.
C.
The
Company has announced, and included in this disclosure below, a listing of
upcoming theatrical films that will also be released onto home video formats.
D.
Competitive
Position – The Company competes for theatrical screens and retail (home video)
shelf space against seven (7) Major Studio suppliers and approximately eight
(8) independent studio suppliers. While
all of the Major Studio competitors operate their own (in-house) home video
distribution divisions, only three of the independent studio suppliers operate
both theatrically and in the home video markets. Operating a home video releasing label “in-house”
provides the Company with an advantage in the solicitation of titles for
acquisition, as well as provides greater control over the Company’s cash-flow
and corporate goals.
E.
Materials
and Suppliers – The principal service providers to the Company are listed in
detail in this disclosure, below. The
principal suppliers of new release film and video products include the
following production companies and programming sources (listed alphabetically):
Allegheny Image Factory; American Family Movies; Associated Television;
Atlas Films; BerVon Entertainment; Cinetic Media; Daybreak Pictures; Empire
Film Group, Inc.; Eurocine International; FreeStyle Releasing; Gaumont, SA; Green
Apple Entertainment; Little Film Company; Northbank Entertainment; Origin
Motion Pictures; Paseo-Miramar Studios; Plaza Entertainment, Inc.; Phoenix
Entertainment; Phoenix Releasing Group; SND Films; Sola-Media, GmbH; Shoreline Entertainment; Studio 3 Entertainment
and PWI-Veracruz Entertainment. The
principal suppliers of books for the Company to publish include (listed
alphabetically): James Danielson, Brenda
Hancock, Vivian Kaplan, Barr McClellan, and Vivian Schilling. The Company sees no shortage of properties
available for acquisition in any of the applicable media.
F.
Dependence
on Major Customers – The only current customer for the Company that constitutes
a greater-than fifteen percent (15%) contribution to gross revenues is Wal-Mart
Stores, Inc. (inclusive of sales to their SAM’S Clubs division). The Company does not see the Wal-Mart market
share as an unhealthy dependence on a key customer, as Wal-Mart constitutes a
much smaller share of the Company’s overall revenues than for many Major
Studios, and the Company does not anticipate that the growth in sales to
Wal-Mart Stores, Inc., will grow disproportionately with the Company’s other
customers.
G.
The
Company does not own or control any patents, franchise or concessions. The licenses and royalty agreements fall
under the category of being part of the ordinary course of business.
H.
The
company does not need any government approvals of principal products or
services.
I.
Key
Suppliers providing essential services to the Company include: CD Video Labs / Encore Media Services /
Gentek Media (DVD and Blu-Ray
Replication); Modern VideoFilm / Cloud 19 Media (video manufacturing & replication); Mike DVD (video authoring); Oleum Rain Studios (art design); Just-Us Printers (Printing); George B. Morton, Esq. (Corporate Legal Advisor); Jonathan
Leinwand, Esq. (Securities Legal
Advisor); Terry L. Johnson, CPA (Auditor);
Lisa L. Higgins, CPA (Tax Preparer); Elder
Properties (Landlord).
The nature and
extent of the issuer’s facilities include a primary office and warehouse
combo unit (under lease from Elder Properties, Springdale, AR), comprising
approximately 6,000 square feet. The
Company has operated from this location since February of 2008, and this is the
location of the Company’s principal operations, records and staff.
(d) Financial
Information about geographic areas. At
present, over ninety percent (90%) of the Company’s annual revenues are derived
from sales of products or contracts to licensors within the United States of
America and Canada. Principal customers
include Walmart Stores, Inc., Redbox, Netflix, Ingram Entertainment and a
variety of other retail chains and wholesalers servicing such outlets. During 2015 and moving into the future with
international presale agreements, the source of revenues for the Company will
become more diverse geographically, as these international sales are delivered
and collected. Company forecasts that
the feature film, “Mother Goose: Journey
To Utopia” could generate approximately five-million dollars (USD $5,000,000)
in revenues for Company from territories and media outside of the United States
and Canada. Based upon the Company’s
forecasts of existing (core) DVD and BluRay releases of approximately ten-million
dollars (USD $10,000,000) from sales in the United States and Canada during
2015 – inclusive of sales to be derived from the Medallion Releasing supplier
studios (but excluding any forecasted
revenues for the launch of the VODWIZ video-on-demand portal), the addition
of international revenues from “Mother Goose” and other titles owned or
controlled for international sales by Company
could result in a shift of
geographic dependence of revenues. At
present, the only foreign country generating revenues for the Company is
Canada, and the Company does not see any reasonable threats to jeopardize this
ongoing sales or collection activities.
During 2015, the Company expects to begin making delivery of new
productions to international rights licensors, with principal revenues deriving
from recognized and financially solvent licensors in the territories of
Germany, France, United Kingdom, Spain, Japan and Scandinavia (in descending order of anticipated total
sales). The Company does not foresee
any material risks associated with the solicitation of international presale
contracts for new and upcoming productions, as full payment for said rights
licenses is paid in full, contemporaneously with the delivery of the films.
(e) Long-Lived
Assets. The Company’s financial
reports include an asset listing for the Film and Television Library and rights
otherwise owned or controlled by Company.
Under film industry practices, entertainment companies will forecast the
long-term value of each of their properties based on previous sales histories
or current activities, inclusive of all applicable media for the rights
controlled in each property. The value
of a Film Library is usually realized over multiple years as the titles
generate revenues for the studio; the
addition of new media formats can have a positive impact to the value of a Film
Library by creating new outlets and revenue opportunities for titles that had
otherwise grown exhausted. Conversely,
the rights to distribute some titles will eventually expire and result in the
elimination of the revenue forecasts for such titles. The Film and Television Library report for
Hannover House was conducted in 2011 and will be conducted again in 2015 by a
reputable, third-party firm specializing in entertainment property valuation
reports. The Company has added over
seventy (70) properties under exclusive license since the Film & Television
Library report was completed in 2011, yet none of these recently added titles
have been added yet into this report. Management does not believe that the
updated Library Valuation Report to be conducted during 2015 will result in a
material change in the valuation of the Library as listed in the Company’s
financial statements and balance sheets.
(f) S.E.C. /
Edgar Reporting. Although not yet
listed as a fully-reporting and registered security, in the interests of
shareholder disclosure, beginning in 2013, the Company began making periodic
and voluntary filings with the Securities and Exchange Commission through
access to the Edgar Department. Filings
provided included 10q and Form 8 statements, and were reflective or otherwise
identical to the periodic filings made by the Company to the OTC Markets. The Company acknowledges that the public may
read and copy any materials that the Company files with the S.E.C. through the
direct means and methodologies prescribed by the S.E.C., or electronically
through the S.E.C. and the Edgar file access system. Disclosures, filings and
financial reports made by the Company are available to the public
free-of-charge through the OTC Markets website.
(g) Reports
to Shareholders. Company currently
conducts an annual meeting of shareholders, once each year, which occurs prior
to March 1st, and contains a recap report on the prior year’s activities
and a forecast of new activities for the coming year. The bylaws of the Company do not require that
an annual meeting of shareholders be held.
However, in lieu of an annual meeting of shareholders, Company may elect
to issue an annual report, which shall be sent free-of-charge to all identified
shareholders of record as of the qualifying period. The Company believes that its periodic filing
of Management Statements, Board of Directors Minutes and General Updates – both
as filings on the OTC Markets website, as well as through the Company’s
publicly accessible blog site – creates a clear line of transparency and
current communication to shareholders on all activities of a material or
substantive nature.
(h) Principal
Properties / Titles. Attached to this
Registration Form are Exhibits which list some of the primary titles and
properties owned, controlled or distributed by the Company. The following list summaries some of the
titles which have previously proven to be significant contributors to the Company’s
revenues, or which are anticipated to become top selling titles for the Company
over the coming year.
HISTORIC – BEST SELLING
BOOKS UPCOMING
– ANTICIPATED BOOKS
Blood, Money & Power: How LBJ
Killed JFK The
Verdict: Justice for John F. Kennedy
Quietus Genergraphics
Sacred Prey Book
of Rhymes
HISTORIC – BEST THEATRICAL TITLES UPCOMING – ANTICIPATED
THEATRICAL HITS
Twelve Dark
Awakening
On Any Sunday: The Next Chapter The
Algerian
Toys in the Attic Bonobos:
Back to the Wild
HISTORIC – TOP SELLING VIDEO TITLES UPCOMING – ANTICIPATED
HIT VIDEO TITLES
Twelve American
Justice
Grand Champion Gabrielle
Boggy Creek: The Legend Is True Dinosaurs
of the Jurassic
Turtle: The Incredible Journey Doonby
Martial Arts Marathon Salvation
SWAT: The Real Story Silent
No More
Future Shock Brutal
Colors
Upon the effective
date of this Registration Statement, the Company’s class of Common Stock will
be registered under the Exchange Act and it will have reporting obligations,
including the requirement that it files annual, quarterly and current reports
with the SEC. In accordance with the requirements of the Exchange Act, the
Company’s annual reports will contain financial statements audited and reported
on by its independent registered public accountants.
The Company does
not intend to enter into a business combination with a business if audited
financial statements based on United States generally accepted accounting
principles (U.S. GAAP) cannot be obtained for such business. The Company cannot
assure you that any particular business identified by the Company as a
potential acquisition candidate will have financial statements prepared in
accordance with U.S. GAAP or that the potential target business will be able to
prepare its financial statements in accordance with U.S. GAAP. To the extent
that this requirement cannot be met, the Company may not be able to acquire the
proposed target business. While this may limit the pool of potential
acquisition candidates, the Company does not believe that this limitation will
be material.
If applicable, upon
the consummation of a business combination, the Company will file with the SEC
a current report on Form 8-K to disclose the business combination, the terms of
the transaction and a description of the business and management of the target
business, among other things, and will include audited consolidated financial
statements of the Company giving effect to the business combination. Holders of
the Company’s securities will be able to access the Form 8-K and other filings
made by the Company on the EDGAR Company Search page of the SEC’s Web site, the
address for which is www.sec.gov. The public may read and copy any materials
the Company files with the SEC at the SEC’s Public Reference Room at Room 1518,
100 F. Street, N.E., Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
Item 1A. Risk Factors. An investment in the Company is highly speculative in nature and involves a high degree of risk.
Risks Related to our Business
There may be conflicts of interest between our management and the non-management stockholders of the Company. Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of the stockholders of the Company. A conflict of interest may arise between our management’s personal pecuniary interest and its fiduciary duty to our stockholders. The Company is unaware of any such conflicts of interest with any of the three principal managers of the Company (Eric F. Parkinson, Don Frederick Shefte, Tom Sims).
Other than as set forth in
this FORM 10 filing, there are no specific risk factors relating to the
Company's securities that are not universally applicable to other equities
trading on the OTC Markets.
Key Man / Principals - The Company is reliant upon the continued
employment and work performance of the three, principal managers, Eric
Parkinson (CEO), D. Frederick Shefte (President) and Tom Sims (VP of
Sales). As an accommodation to benefit
the Company's cash flow, both Parkinson and Shefte have been deferring a
majority of their salaries.
Additionally, as has been required by many third-party program
suppliers, Parkinson has often been listed as a "key man" to the
rights licenses or sales venture agreements for specific acquisitions, due to
his successful home video sales track record.
The cessation of employment by either Parkinson or Shefte could have a
material and negative impact on the Company, as current cash flows would not
facilitate the hiring of comparably qualified executives, and the loss of
Parkinson as "key man" could result in multiple title agreement
cancellations. The loss of Tom Sims as VP of Sales could be claimed as a
material breach or cause of termination for some of the supplier agreements
entered into under the Medallion Releasing multi-studio distribution and sales
venture, which is being managed by Sims on behalf of Company. Prior to joining Hannover House and launching
the Medallion Releasing multi-studio venture, Tom Sims had worked for 13 years
as the Wal-Mart Video Buyer for Anderson Merchandisers, the primary VMI
Supplier for Wal-Mart’s D5 Entertainment categories. In part due to his unique knowledge and
connections with Wal-Mart, Sims was hired by Vivendi / Universal Music Group to
establish a multi-studio distribution venture which rapidly grew to more than
$180-million in annual revenues. The
structure and releasing strategy that Sims has designed (and is implementing)
for the Medallion Releasing multi-studio sales venture is similar to the
strategy for the ventures established by Sims for Vivendi / Universal Music
Group and Allegro Media Group.
Credit Facilities & Key Suppliers – At present, the Company is operating without
the benefit of a credit facility to finance new release activities or
operations. An agreement for a loan of
$250,000 was entered into in December with European Group, Ltd., which ultimately
was terminated by mutual agreement prior to funding. Two additional agreements with lenders have
been obtained and relate to title-specific financing and will be disclosed in a
Form 8 Information Statement as funding for each occurs.
A credit line for the
manufacture of DVDs and BluRays with CD Video Labs is being pursued, which is
anticipated to be collateralized by a lien against accounts receivable. However, at present, Company is operating without
the benefit of a credit line or substantial vendor credit facilities for the
manufacture and release of DVDs and BluRays.
Current sales volume – while growing exponentially with the increase in
new release activities – still has not created an unmanageable burden on the
Company’s cash flow or abilities to properly service new release demand in a
timely manner. The greatest risk factor
at present regarding the timely fulfillment of orders is the upside of titles
which might generate reorders at a demand that outpaces the maturation of the accounts
receivable. If such a scenario occurs,
Company is confident that manufacturer (lab-supplier) credit to fill such
orders can be obtained, or that cash flow from purchasers can be accelerated in
order to alleviate any shortfalls required to meet a growing sales demand. The in-house DVD manufacturing capabilities
possessed by Company do not economically conform to be competitive with the pricing
of large orders in excess of 10,000 units per title when compared to the costs
from larger replications labs.
Judgment Creditors – Over the past six years, the Company has effected
payments to creditors, suppliers and judgment lien holders in a manner which
has preserved the Company’s ability to operate and grow. Total debt balances due to Judgment Creditors
have been reduced in the past four years by approximately $2,814,330, leaving a
total due to Judgment Creditors of approximately $2,319,667. Management feels that the Company’s ability to
reduce these key debts by more than 54% in the past four years, while still
growing the core business activities, indicates both managerial and operational
capabilities to handle the ongoing reduction and retirement of debts. Although there is no indication to suggest
otherwise, Company makes no representation, warranty or guarantee that the
judgment creditors will continue to work with management in a cooperative
manner regarding the retirement of the remaining balances.
Officer Deferrals and Loans – As of 12/31/2014, the total amount of the
balances due to key managers Parkinson and Shefte for deferred salaries and
officer loans was $938,441. This amount
is considered to be “long-term / deferred debt” (as it is presently structured as being payable under a basis
subordinate to other creditors and Company needs).
Item 2. Financial Information – Balance Sheets and Income Statements for the Full
Fiscal Years, ending 12/31/2012 and 12/31/2013 along with Auditor’s letter and
footnotes are contained within this Registration filing. Company has also provided as Exhibits
additional financial data, including a pro-forma income statement and balance
sheet for the full fiscal year ending 12/31/2014 (unaudited), and a
side-by-side comparison of the Income Statements and Balance Sheets for the
years 2012 and 2013 (audited) and the proforma (unaudited) results for the year
ending 12/31/2014.
Management’s Discussion and Analysis
of Financial Condition and Results of Operation.
The Hannover House operating
division of the Company has been operating continuously since 1993, and in 2002
added DVD products to its original product line of print-edition books. During the past three years (2012, 2013 and
2014), the number of new release products released by the Company as DVD or
BluRay titles was a total of 23 releases, with an approximately annualized
average of eight (8) new releases each year.
The Company does not feel that this level of release activity will
generate sufficient cash flow for the Company to meet its goals of expanding
revenues and profits. Accordingly, the
Company has modified its releasing plan to allow for up to ninety (90) titles
to be released during 2015, inclusive of fifty-five (55) new release titles and
approximately thirty-five (35) pricing or packaging promotions from existing
titles in the Company’s extensive Film and Television Library catalog. The exact quantity of new releases and
catalog promotions is subject to change, and is impacted by a variety of
factors, most notably, the space availability at any particular time with key
retail customers. However, despite the
possibility of modest adjustments in title release quantities or specific
on-sale street dates, the activities for enhanced releasing during 2015 will
represent a substantial increase for the Company, potentially representing a
ten-fold increase and output and a substantial increase in both gross revenues
and bottom line profits.
The Company believes that there is
an identifiable and maximum ceiling of revenues that are likely to be obtained
for each of the direct-to-video releases representing the majority of 2015
product release activities for the Company.
“Action-Adventure” titles such
as the Company’s February 24 (2015) release of “AMERICAN JUSTICE” are attractive titles for both Walmart and
Redbox, and this particular title has been placed for sale with both of these
key accounts. However, the total, gross
wholesale revenues for the packaged-goods (DVD
and BluRay) revenue segments of such a title (inclusive of all other retailers and wholesalers), tops out at
approximately $300,000. Similar sales
results and limitations apply to Sci-Fi Horror titles (including “Gabrielle,” and “Salvation”), with Family and Christian
appeal titles carrying a slightly higher revenue upside and Urban and Spanish
titles carrying a slightly lower upside.
With the existence of these market realities and limitations, the
Company feels that the direct-to-video level business has a likely maximum
annual revenue potential of about $10-million from the domestic (USA &
Canada) home video market.
In order to elevate the stature of
the Company’s profile, as well as to increase its overall revenues and bottom
line, the Company is pursuing new activities in the markets of Theatrical level
films and high-profile productions.
Films that have bigger budgets, star-powered casts and wide release
theatrical exposure generate substantially higher revenues from all media
platforms, including the Company’s core business with packaged-goods DVD and
BluRay products.
The challenge for the Company in
pursuing such goals is to find (or produce) films with such enhanced market
values, and to create (or license) such properties in a manner which assures profitability. During 2015, the Company plans to pursue
activities both in the arenas of wider USA Theatrical release programs, as well
as activities involved with the production or facilitation of production of
higher profile films that the Company can release to a variety of media
platforms.
Management feels that the current
cash requirements for the Company’s “core” business of releasing packaged-goods
titles to the DVD and BluRay markets can be self-generated from regular cash
flow. However, Management does not feel
that the Company is financially able to fund wider theatrical releases or
higher-profile film productions. In this
regard, the Company will be seeking various forms of funding to facilitate these
two ventures. There can be no assurance
that the Company will successfully obtain the financing needed to release films
on a wider basis to theatres, or that the Company will be able to obtain
production financing for the original productions that are referenced in this
Form 10 registration filing. Failure to
obtain funding to enable films to be released on a wider basis to theatres, or
failure to obtain production funding will not jeopardize the Company’s ability
to operate or to continue with its core, packaged goods business activities.
The feature film thriller, “The Summoning” is an example of a
financing strategy that the Company is pursuing to help with both the film’s
production costs as well as the film’s theatrical releasing costs in a manner
that does not drain resources from the Company’s cash flow. In partnership with FreeStyle Releasing and
Netflix, Company has negotiated for a significant pre-sale of the
Video-on-Demand rights (including the right for Netflix to offer
this film via its popular “subscription” based streaming service). The producers of the film, Renegade Motion
Pictures (Canada) have arranged bank financing
(further secured by private investors), that will cash-flow the
distribution presale obtained by Company to fully fund the film’s theatrical
release through Hannover House. Under
this structure, Hannover House receives the benefit of having a film open nationwide
on more than 600-theatres, without incurring any out-of-pocket or accrued
financial liability. The Producers of
the film benefit by having a guarantee of a wide USA Theatrical Release which
enhances the film’s value to international buyers and becomes a key tool
towards assuring the film’s profitability.
“The Summoning” is scheduled
for production in May, 2015 in Louisiana, with a Jan. 8, 2016 theatrical date
planned by Hannover House, DVD and V.O.D. planned for April 12, 2016.
With respect to original feature
film productions being planned by the Company, the chart below shows some of
the financing needs and strategies being pursued by the Company during 2015 to
fund both the physical “production” costs of the properties as well as the
subsequent theatrical releasing costs for the USA & Canada (referred to as
“P&A”).
Under the above structure, the
financial commitments required of the Company would be insignificant and not of
a material nature. However, there can be
no assurance that the anticipated pre-sales, private investors or required
banking facilities (to monetize presales)
will be obtained for these production and releasing ventures.
HANNOVER HOUSE, INC.
Item 2 –
continued – Results of Operations.
The
following discussion should be read in conjunction with our financial
statements and the related notes that appear elsewhere in this Report.
Operating Expenses – Operating expenses during the prior four years have been
generated principally through four sources:
1)
Accounts Receivable / Collected
Revenues from the Sales or Licensing of products;
2)
Revenues from loans, credit lines
and vendor (supplier) provided credit terms;
3)
Benefits to Company from conversion
of eligible (aged) debts under Rule 144 debt exemptions;
4)
Cash loans to Company from Officers
/ Managers
The Company believes that the current value and
the collection timeline of the existing (as well as the recently generated)
Accounts Receivable will be sufficient to meet all of the Company’s releasing
goals and announced plans, without the requirement of a significant credit line
or additional debt considerations.
However, despite the Company’s predicted ability to self-fund current
and upcoming activities at this time, Company is still pursuing a variety of
credit arrangements to have available on an as-needed basis. Additionally, as described above, the Company
will continue to pursue financing opportunities to assist with or fully finance
the production and distribution of the five key titles described above. Company believes that the successful
production and release of these higher profile titles will contribute to
significant growth in revenues and profits for 2016, but that the majority of
revenues and profits for the current fiscal year (2015) will be generated from
the core business of packaged goods distribution through Hannover House and
Medallion Releasing supplier studio releases.
The Company does not have a financial forecast at this time for the
revenue potential to be derived from the forthcoming consumer launch of the
VODWIZ streaming service.
Net Income – Accrued Income – As is consistent with other
entertainment media firms, Company reports sales and profits under an accrual
accounting methodology, which takes into account that some contracts (e.g.,
Netflix subscription payments) can be paid over a two-or-three year timeframe. Accordingly, the Company’s accrued profit
position at any given moment in time is unlikely to conform to the Company’s
cash position at that same moment.
The Company has been generating a
positive profit for each of the past four years utilizing the Industry standard
accrual accounting methodology. During
the past four years, the Company has generated sufficient revenues and funding
to reduce its long-term debts by over $2.7-million dollars while still preserving
sufficient working capital to expand the Company’s release activities and
product library.
International
Presales – During 2013, the Company entered
into some multi-title (and title-specific) sales agreements for the licensing
of existing and upcoming productions to the International Markets. Under industry practice, the Company may
elect to recognize these presale agreements as executed, or as delivered. During 2013 and the first half of 2014, the
Company has previously recognized $2-million in presale agreements for the
international market, which become enforceable upon delivery of the covered
properties. The Company has recognized
its applicable sales fees for these presales.
As of Q3 of 2014, the Company has voluntarily elected to defer
recognition of additional international presale agreements, and to book such
revenues in the future as each property is delivered to the licensors.
Liquidity and Capital Resources
As of the date of this Form 10
filing, the Company had approximately $30,282 in cash. It is the Company’s
standard procedure and policy to minimize the amount of cash on hand in order
to utilize these resources for immediate reinvestment into new releases, operating
needs and debt reductions. The Company
collects payments from customers (Accounts Receivable) on a daily / weekly
basis, and management believes that sufficient collections are scheduled to
meet the operating needs for liquidity and capital resources.
Short Term
Not Applicable.
Inflation
Company’s business is not expected
to be materially affected by inflation.
Company has not entered into any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that would be considered material to
investors.
Item 3. Properties. The Company does not currently own any Real Estate,
but instead rents a combination warehouse and office facility in Springdale,
Arkansas from Elder Properties. The
Company previously held an option to purchase a warehouse and 4.5-acres of land
in Washington, County (Arkansas), which agreement was eventually abandoned due
to a probate title-clearance issue with the previous property owner. Company has been offered land on a
functionally “gratis” basis in the Fayetteville (Arkansas) Industrial Park,
contingent upon Company’s commitment to build and operate its offices,
production and manufacturing facilities at that location. This opportunity will be evaluated and
considered during 2015; an Architectural Survey of the Property site and a
proposed sketch of a facility entitled the “Hannover Media Center” has been
completed by Amirmoez, Foster, Haley Architects. The estimated cost for such a facility would
be approximately $1.1-million; upon completion, with the value of the 10-acres
of land included, the property is forecasted to have a market value of
$1.8-million. If the Company were to
obtain bank financing for such an investment (at $1.1-million), under a 20-year
mortgage at a 5% interest rate, the monthly payments would run approximately
$7,250. At present, the Company is
paying $3,200 per month in rent (and has
paid approximately $262,400 in rent to Elder Properties since March, 2008). The Company will present the opportunity
for the development of the Hannover Media Center for shareholder review and
discussion at the next Annual Meeting of Shareholders.
While the
Company does not currently own any Real Estate, the Company does own significant
assets, including motion picture production and post production gear, a film
truck, significant inventories of DVDs and Books, and the distribution rights
to a large Film and Television Library. An Exhibit of principal titles owned, controlled or
otherwise distributed by Company is included with this Form 10 Registration
filing.
Item 4. Security Ownership of Certain Beneficial Owners and Management. Chairman and C.E.O. Eric F. Parkinson currently owns
43,151,649 shares of Common Stock. Parkinson
has the option to call on the issuance of 6,451,613 shares of Common Stock, as
well as the right to call for the reissue of 37,400,000 shares of Common Stock
that were returned to Treasury or issued or assigned to creditors of the
Company as partial collateral for agreements.
Parkinson also owns 1,800,000 shares of Preferred Stock in the
Company. President Don Frederick Shefte
currently owns 31,487,546 shares of Common Stock. Shefte has the option to call on the issuance
of 6,451,613 shares of Common Stock, as well as the right to call for the
reissue of 5,000,000 shares of Common Stock that were returned to Treasury
pending achievement of specific performance thresholds. Shefte also owns 1,200,000 shares of
Preferred Stock in the Company. The
Preferred Stock shares held by Parkinson and Shefte each represent the voting
power of 1,000 shares each of Common Stock; the Preferred Stock shares can be
converted into Common Stock by Parkinson or Shefte upon his departure from the
Company for any reason.
COMMON
STOCK – Officers, Directors & Owners of 5% or More Shares
Eric F.
Parkinson (Beneficial Owner) Don.
F. Shefte (Beneficial Owner)
Chairman
& C.E.O. President
1722 N.
College Ave. 3741
N. Old Wire Road
Fayetteville,
AR 72703 Fayetteville,
AR 72701
a). 43,141,649 Common Stock Shares a). 31,487,546 Shares
b). 1,800,000 Preferred Shares b). 1,200,000 Preferred Shares
c). Option to call for 6,451,613 Common Stock
Shares c). Option to call for 6,451,613 Common Stock Shares
d). Option to call for 37,400,000 Common Stock
Shares d). Option to call for 5,000,000 Common Stock
Shares
Current
Ownership of Common Stock: 6.5% Current
Ownership of Common Stock: 4.7%
Potential Common
Stock Percentage: 12.31% Potential Common Stock
Percentage: 6.36%
Item 5. Directors and Executive Officers.
(a) Eric F. Parkinson (56) – Chairman and Chief Executive Officer. Parkinson is a entertainment industry veteran
with more than 30-years of experience in the film production and distribution
arenas. Prior to purchasing Truman
Press, Inc., d/b/a “Hannover House” in 2002, Parkinson had served as the
Chairman and C.E.O. of Hemdale Communications, Inc., a NASDAQ traded
entertainment company, as well as senior executive level positions with Plaza
Entertainment, Inc. and A.I.P. Studios.
Parkinson has released more than 900 titles to the North American home
video marketplace, with a dozen #1 national best-sellers, including
“Terminator”, “Little Nemo” and the “1984 Summer Olympic Highlights.” Parkinson studied film production and
communications at the University of Kansas and the University of Arkansas,
where he has also served as a guest lecturer on film production and
distribution. On the production side,
Parkinson has served as producer (or executive producer) on more than sixty
feature films or television programs.
(b) Don Frederick Shefte, Esq. (67) – President. Shefte joined Hannover House in 2007
after serving as a Trust Officer for the Bank of Fayetteville. As a licensed attorney in California, Shefte
worked his way up to a partnership position at one of the top law firms in San
Diego (Seltzer Caplan) before moving into private-practice as an entrepreneur
and Wal-mart vendor. Shefte obtained his
law degree from Vanderbilt University, and undergraduate degree at Trinity
University.
Due to his
specialized knowledge of financial services and estate planning, Shefte also
worked as an adjunct professor for the Sam Walton School of Business at the University
of Arkansas while also working as a Bank Trust Officer. Since joining Hannover House, Shefte has
negotiated over 100 rights license agreements and has assisted in the release
of more than 65 titles.
The
term of office of each director expires at the earlier of when the director’s
successor is elected and qualified, his resignation, his removal from office by
the stockholders or his death. Directors are not compensated for serving as
such, but the Board of Directors may provide for compensation of Directors by
resolution. Officers serve at the discretion of the Board of Directors.
(c) Significant
Employees.
In addition to Eric F. Parkinson and D. Frederick
Shefte, Company considers its Vice President of Sales, Tom Sims, to be a
significant employee. Sims joined the
Company in June, 2014, with a mandate to recreate a multi-studio distribution
model similar to those that he successfully formed and operated for Vivendi /
Universal Music Group and Allegro Media Group.
The release model being operated by Tom Sims, Medallion Releasing, Inc.,
is a consortium of five (at present) video labels, each representing a
specialty in non-competitive arenas and categories of videos (e.g., Spanish,
Urban, Christian, Family, Horror, Anime).
The continued employment of Tom Sims is believed to be a material
requirement of the supplier studios participating with Medallion Releasing,
Inc. For calendar year 2015, Company is
forecasting gross sales of over $5-million from the Medallion supplier labels,
which revenues will nicely supplement income being generated by Hannover House
activities.
(d) Family Relationships.
None.
(e) Involvement in Certain Legal Proceedings.
No
officer, director, or persons nominated for such positions, promoter, control
person or significant employee has been involved in the last ten years in any
of the following:
·
Any bankruptcy
petition filed by or against any business of which such person was a general
partner or executive officer either at the time of the bankruptcy or within two
years prior to the time of such filing, or any corporation or business
association of which such person was an executive officer either at the time of
the bankruptcy or within two years prior to the time of such filing;
·
Any conviction in
a criminal proceeding or being subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses);
·
Being subject to
any order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any
type of business, securities or banking activities; and
·
Being found by a
court of competent jurisdiction (in a civil action), the Commission or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.
Item 6. Executive Compensation.
Both
Parkinson and Shefte are currently accruing an annualized salary of
one-hundred-eighty-thousand dollars (USD $180,000) each; however, these managers has been deferring
receipt of most or all of this accrued salary on a monthly basis, in order to
assist with the Company’s cash flow management and growth. In addition to this accrued salary, each of
Parkinson and Shefte have had their health insurance premiums and cellular
phone bills covered by the Company.
Based on industry comparisons for salary and compensation packages for
key executives in the entertainment industry, both Parkinson and Shefte are
accruing less than half of the base compensation of $400,000 being paid to key
executives by other independent studios.
By agreement with Parkinson and Shefte, payment of the deferred / accrued
salaries shall be considered subordinate to key creditors and corporate
operational needs, excepting for termination or cessation of employment for any
reason, at which time the deferred salaries become due and payable.
Item 7. Certain Relationships and Related Transactions, and Director
Independence.
Not
Applicable.
Item 8. Legal Proceedings.
As of the finalization
date of this Form 10 Registration, February 17, 2015, the Company was not
involved in any legal proceedings. Over
the past five years, the Company has been involved in a variety of lawsuits and
disputes, all of which have been fully adjudicated and are now subject to
performing settlement agreements, full resolution or pending negotiations.
Additional
details of former legal matters and the resolution of balances are included in
the footnotes to the audited financials.
As
Plaintiff, the Company has engaged the services of attorney George B. Morton,
Esq., to file a lawsuit for damages against a known individual and his accomplices
who have been aggressively attacking the Company’s stock, reputation and
management with knowingly false and malicious statements and acts of
interference (including a sabotage of the
Company’s relationship with a previously designated auditing firm and direct
interference with several programming supplier partners). Details of this lawsuit, which is expected to
be filed during March, 2015 – and which is expected to seek several million
dollars in damages on or more on behalf of the Company, officers and
shareholders – will be disclosed in a separate Form 8 information statement
filing. The Company is also cooperating
and supporting a current investigation by the F.B.I. into the matter of these
same traders and short-sellers who have pursued a strategy of using false and
misleading information to negatively impact the stock price.
Item
9. Market Price of and Dividends on the
Registrant’s Common Equity and Related Stockholder Matters.
(a)
Market Information.
The Common Stock is currently
trading on the OTC Markets Pinksheets under ticker symbol: HHSE. The current market price of the Common Stock
shares is approximately one-cent ($.01) per share, with an average daily volume
of approximately 1,672,000 shares (value of dollar volume of average daily
trading is $16,720).
(b)
Holders.
According to the Company’s Transfer Agent,
Standard Registrar & Transfer Co., Inc., there are currently 183
Shareholders of Record, inclusive of account holders with multiple shareholders
(such as E-Trade, Scottrade, TD Ameritrade, etc…). To the best of Management’s knowledge, and as
confirmed by the Transfer Agent, there are only two shareholders known to own
or control more than five percent (5%) of the Company’s stock, namely officers
Eric F. Parkinson and D. Frederick Shefte (Shefte’s
ownership of 5% or more is predicated upon his exercise of the two options to
receive shares as described herein).
(c)
Dividends.
The Registrant has not paid any cash
dividends to date and does not anticipate or contemplate paying dividends in
the foreseeable future. It is the present intention of management to utilize
all available funds for the development of the Registrant’s business.
(d)
Securities Authorized for Issuance
under Equity Compensation Plans. None.
Item 10. Recent Sales of
Unregistered Securities.
As described hereunder, there is an
existing market for the Company’s unregistered securities via the OTC Markets
Pinksheets Exchange, under ticker symbol: HHSE.
Management believes that the Company’s shares have been listed and
traded regularly since the initial registration and subsequent to the Form 15
Termination of Registration. At all
times since the merger between Hannover House and Mindset / TDGI in December,
2009, the Company has relied upon the advice of competent, outside securities
counsel as well as the Company’s transfer agent, regarding the legality of any
issuances of unregistered securities, including shares that have been issued
over the past four years under a Rule 144 exemption for qualified debt
conversions. A detailed schedule of all
share issuance history since 2010 has been previously submitted.
Item 11. Description of Registrant’s
Securities to be Registered.
(a)
Capital Stock and Preferred Stock.
The Company is authorized by its
Articles of Incorporation to issue an aggregate of 700,000,000 shares of
capital stock, par value $0.001 per share, all of which are shares of Common
Stock. The Company is also authorized by
its Articles of Incorporation to issue an aggregate of 10,000,000 shares of
Preferred Stock, par value $.001 per share, all of which are shares of
Preferred Stock. As of January 1, 2015,
Company had issued a total of 663,227,212 shares of Common Stock and 3,000,000
shares of Preferred Stock.
Common Stock - All outstanding shares of Common Stock are of the same
class and have equal rights and attributes. The holders of Common Stock are
entitled to one vote per share on all matters submitted to a vote of
stockholders of the Company. All stockholders are entitled to share equally in
dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available. In the event of liquidation, the
holders of Common Stock are entitled to share ratably in all assets remaining
after payment of all liabilities. The stockholders do not have cumulative or
preemptive rights.
Preferred
Stock – As per the Company’s Articles of
Incorporation, all outstanding shares of Preferred Stock are considered as
“Voting Shares” to be held by the Company’s principal managers. The Preferred Stock shares carry a value of
1,000-to-1 as compared to the voting power of the Common Stock shares.
The Preferred Stock may be converted
to Common Stock by the Preferred Stockholders upon cessation of their
managerial or directorship duties for the Company, said conversion to be
performed at a ratio of 30 Common Stock shares per share of Preferred
Stock.
(b)
Debt Securities
Principal managers for the Company, Eric F.
Parkinson and D. Frederick Shefte, each retain the option of converting their
unpaid and / or deferred salaries and / or the balances otherwise due and
payable from cash proceeds loaned to the Company by Parkinson and Shefte into
Common Stock shares at a Volume Weighted Average Price based on the previous
thirty (30) days of trading in the Company’s Common Stock prior to the exercise
of such conversion.
(c)
Warrants. None.
(d) Other Securities to Be Registered. None.
Item 12. Indemnification of
Directors and Officers.
With certain exceptions, under applicable
laws of the State of Wyoming and the Securities Act of 1933, the directors and
officers of the Company will not be individually liable to the Company, its
stockholders or creditors for any damages as a result of any act or failure to
act in their capacity as a director or officer unless it is proven that the act
or failure to act breached fiduciary duties as a director or officer and
such breach involved intentional misconduct, fraud, or a knowing violation of
law.
Pursuant to the Company’s Bylaws,
Company is required to indemnify and hold harmless, to the fullest extent
permitted by Wyoming law, each officer and director of the Company who is made
or is threatened to be made a party or are otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that such person is or was a director or officer of ours
or, while a director or officer of ours, is or was serving at our request as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, against all
expenses, liabilities and losses (including without limitation attorneys’ fees,
judgments, fines, taxes, penalties, and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person. Under Wyoming law,
any such indemnification is only available if such acted in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the Corporation or for amounts paid in settlement to the corporation, unless
and only to the extent that the court in which the action or suit was brought
or other court of competent jurisdiction determines that the person is entitled
to such indemnity. The indemnification provided by Company’s Bylaws is not
exclusive of any other rights to which those indemnified may be entitled under
any statute, provision of the Company’s Articles of Incorporation or Bylaws,
agreement, vote of stockholders or Directors, or otherwise and shall continue
as to a person who has ceased to be a director or officer and shall inure to
the benefit of the heirs, executors, and administrators of such person.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the foregoing, or otherwise, we have been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
The
Company is entitled to purchase insurance on behalf of the officers and
directors of the Company.
Item
13. Financial Statements and
Supplementary Data.
Company sets forth below a list of
audited financial statements included in this Registration Statement on Form
10.
Statement
|
Page*
|
||
Report of Independent Registered
Public Accounting Firm
|
F1
|
||
Balance Sheet as of December 31,
2012 – 2013 (side-by-side)
|
F2-3
|
||
Balance Sheet as of December 31,
2012 – 2013 (side-by-side)
|
F2-3
|
||
Statement of Cash Flows for the
Period ending December 31, 2013
|
F4
|
||
Statement of Changes in
Stockholders’ Equity from the Period from January 1, 2012 to
December 31, 2013
|
F5
|
||
Income Statements – 2012 – 2013
(side-by-side)
|
F6
|
||
Notes to Audited Financials
|
F7-10
|
Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Neither
Company nor its Managers have any disagreements with the Accountants and
Auditors who have performed services or otherwise consulted on this Form 10
filing and the financial exhibits contained therein.
Item 15. Financial Statements and Exhibits.
Item 15(a) – All Financial
Statements filed as part of the registration statement.
Item 15(b) – All Exhibits
required by Item 601 of Regulation S-K.
Item 15(c ) – Additional
Exhibits provided by Registrant
SIGNATURES
Pursuant to the
requirements of Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
HANNOVER HOUSE, INC. (Registrant)
/s/
Eric F. Parkinson
Date: February 17, 2015 By:_____________________________________
Eric
F. Parkinson, Chairman & C.E.O.
/s/
Don Frederick Shefte
By:_____________________________________
D.
Frederick Shefte, President
ITEM 15(a) – 1 – FINANCIAL INFORMATION & AUDITOR’S
REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To The Board of
Directors and shareholders of
Hannover House, Inc.
Springdale, Arkansas
I have audited the
accompanying consolidated balance sheets of Hannover House, Inc. (the
“Company”) as of December 31, 2013 and 2012 and the related consolidated statements
of operations, stockholders’ deficit and cash flows for the years ended December
31, 2013 and 2012, and the related notes to the consolidated financial
statements.
Management’s Responsibility for Financial
Statements
Management is
responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally
accepted in the United State of America; this includes the design,
implementation and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
My responsibility is to
express an opinion on these consolidated financial statements based on my
audits. I conducted my audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. The Company is not required to have, nor was
I engaged to perform, an audit of its internal control over financial
reporting. My audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting.
Accordingly, I express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. I
believe that my audits provide a reasonable basis for my opinion.
Opinion
In my opinion, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of the Company as of December
31, 2013 and 2012 and the consolidated results of its operations and its cash
flows for the years ended December 31, 2013 and 2012, in conformity with
accounting principles generally accepted in the United States of America.
/s/ Terry L. Johnson,
CPA
Casselberry, Florida
January 15, 2015
Consolidated Balance Sheets (2012 /
2013)
The
accompanying notes are an integral part of these financial statements.
Consolidated Balance Sheets 2012 –
2013 (Continued)
The accompanying notes are an
integral part of these financial statements.
Income Statement - 2012 – 2013
The
accompanying notes are an integral part of these financial statements.
Changes in Stockholder Equity (2011,
2012, 2013)
The
accompanying notes are an integral part of these financial statements.
ITEM F6 – Income Statement - 2012 – 2013
The
accompanying notes are an integral part of these financial statements.
Notes to Audited Financials
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Hannover House was
originally incorporated in California in Sept., 1993 as Truman Press, Inc.,
d/b/a “Hannover House.” The
Company relocated its domicile to the State of Arkansas in 2008 and continues
to operate as an Arkansas Corporation in Good Standing. The Company merged with Target
Development Group, Inc., (formerly known as Mindset Interactive Corp.), on Dec. 9, 2009, with a
stock-for-stock swap transaction effective as of January 1, 2010. The prior officers and directors of
Target Development Group, Inc. resigned contemporaneously with the merger with
Truman Press, Inc., and the principal managers of Truman Press, Inc., (specifically
Eric F. Parkinson and Don Frederick Shefte), became the principal managers of the
merged Company. Parkinson (as Chairman and C.E.O.) and Shefte (as President) have managed the Company since the
merger, and are also the sole members of the Board of Directors. In April, 2011, the Company applied
for and received approval from the Financial Industry Regulatory Authority (FINRA) for a formal change of the
corporate name and OTC Markets trading symbol. Effective in April, 2011, the
Company’s name was formally approved and acknowledged as “Hannover House,
Inc.” and the ticker symbol
for the Company’s shares became “HHSE.” The Company also operates three
subsidiary, special purpose corporations, but for the purposes of reporting to
shareholders, all financial statements are consolidated for all four
entities. The special
purpose corporations are Bookworks, Inc. (for productions),VODWIZ, Inc.
(for a video-on-demand streaming service) and
Medallion Releasing, Inc. (for
the Company’s multi-studio sales venture).
Use
of
estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ
significantly from those
estimates.
Cash
and
cash equiv alents
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
– (Continued)
Stock-based compensation
The Company records
stock based compensation
in accordance with
the guidance in ASC Topic 505
and
718 which requires the Company to recognize
expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting
period of the award.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably
measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC
505-50.
Accounts Receivable
Accounts Receivable includes
write-down of $455,000 from Phase 4 Films, considered to be uncollectible debt;
it also includes a total of $1,500,000 in net presales for "Mother
Goose" which are assigned to the special purpose production entity.
Sales of DVDs and BluRays to
principal mass merchant customers of Company, including WALMART, TARGET and
BEST BUY are sold under terms which allow for the retailer / wholesaler to
return (for credit) any unsold merchandise.
Company has created a reserve against Accounts Receivable to allow for
reductions in sales that may occur at a future date, if, as and when such
product returns might occur. Company
also has created adjustments to the Accounts Receivable balances to allow for
pricing reductions / “price-protection” for product that may still be in stock
at retailers, but which is otherwise being reduced in wholesale pricing for
re-release / re-promotion by Company.
Typically, new release DVD products sold by the Company carry an initial
suggested retail price of $14.95; Blu-Ray products sold by the Company
typically carry an initial suggested retail price of $19.95. As sales of these products begins to slow,
and after an initial pricing period of at least six months, the Company will
often reduce the suggested retail pricing to $9.95 (DVDs) and $14.95
(BluRays). Approximately 12-to-18 months
after initial release, the Company will often re-price the products a second
time, with DVDs being offered at $5.00 (Budget Bin) and BluRays offered at
$7.99 or $9.95 suggested retail. These three release cycles are referred to as
“initial release”, “sell-thru release” and “budget release” windows. As a final outlet for any unsold merchandise
remaining after the budget release has occurred, on occasion, the Company has
placed “Overstock”, “Closeout” or “Discontinued” DVD and BluRay products with
specialty retailers and wholesalers, including Big Lots, Dollar General, Bed
Bath & Beyond, Love’s Truck Stops and other accounts carrying bargain priced
DVD and video products.
Merchandise Inventory
Merchandise Inventory
is primarily DVD products (92%) and print-edition books (approx. 8%), and has
been valued at the Cost-Of-Goods as opposed to the current wholesale pricing
for these products.
Prepaid Producer Royalties,
Producer Marketing Recoupment and Film Distribution Rights
The categories of Prepaid Producer
Royalties, Producer Marketing
Recoupment, and Film Distribution Rights refer to capitalized costs related to
the licensing of properties (the costs for which are subject to recoupment by
HHSE against a producer royalties), the recoupment of expenses (funds advanced
by HHSE to cover the costs to market and release films under sales agency
agreements, which costs are also subject to recoupment by HHSE) and sums paid
as flat fees or direct investments in productions or film distribution rights
(which are subject to recoupment by HHSE and as such, eligible for
capitalization).
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
– (Continued)
Accounts payable
Accounts Payable refers
to balances still due on those items incurred during the prior two
quarters. The Company has categorized
other items of debt into the classifications of: Accounts Payable, Accrued
Royalties, Acquisition Advances Due, Accrued Wages, Payroll Taxes Due, Deferred
Payroll Taxes, Note (and Interest).
Accrued Royalties
Accrued Royalties is
the net amount due to third parties on an accrual basis from the sale of videos
and properties which are subject to royalty payments. These amounts may be due on an accrued basis,
but not due on a “cash” basis until the accrued revenues contributing to these
balances are actually collected.
Producer Acquisition
Advances Due
Producer Acquisition
Advances Due – sums due via contract or other agreement to third parties, which
sums shall be recoupable against the Producer’s applicable royalty once the
property is released.
Payroll Taxes Payable
Payroll Taxes Payable
for 12/31/2013 refers to accrued 941 Employer obligations incurred from the
engagement of actors for the film production, “Toys in the Attic.” Company had utilized a third-party payroll
service for this production, and the balance of payroll taxes due was unclear. Following the filing of the 12/31/2013
financials, the Company has since fully retired this Payroll Taxes Payable
balance.
Revenue recognition
The Company's revenues are anticipated to be derived from multiple sources. Primarily
revenues will be
earned as products are
delivered.
Advertising costs
Advertising costs are anticipated to be capitalized
as incurred until recouped (in the case of Sales Agency and Distribution
Ventures under which the Company advances recoupable funds on behalf of a
producer’s release), and expensed as ultimately earned (in the case of Licensed
Titles under which the Company incurs the non-recoupable, financial risk of
advertising and marketing expenses).
Income
taxes
The Company follows ASC Topic 740 for recording
the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized
or settled. Deferred income tax expenses or benefits
are based on the changes in the asset or liability
each period. If available evidence suggests that it is more likely than not that some
portion or all of the
deferred tax assets will not be realized, a valuation
allowance is required to reduce the deferred
tax
assets to the amount that is more
likely than not to be
realized. Future changes
in such valuation allowance are included in the provision
for deferred income
taxes in the
period of change.
Deferred income taxes may arise from temporary differences resulting
from income and expense items reported
for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of
assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an asset or liability
are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater
than fifty percent likelihood of being sustained upon examination by the taxing
authorities. As of December
31, 2013 and 2012, the Company reviewed its tax positions and determined there were no outstanding, or
retroactive tax positions
with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard
has not had a material affect on the
Company.
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
– (Continued)
The Company does not anticipate any significant changes to its total unrecognized tax benefits
within the next 12 months.
The Company classifies tax-related penalties and net interest as income tax expense. As of December
31, 2013 and 2012, no
income tax expense
has
been incurred.
Earnings per share
The Company follows ASC Topic 260 to account for the earnings per share. Basic earning
per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive
common share equivalents outstanding.
During periods when common stock equivalents, if any, are anti-dilutive they are not considered in
the computation.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain
market assumptions and pertinent information available to management
as of December 31, 2013. The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These
financial instruments include
cash, prepaid expenses
and accounts payable.
Fair values were assumed
to approximate carrying
values for cash and payables because they are short term in
nature and their carrying
amounts approximate fair values or they are
payable on demand.
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets
for identical assets
or liabilities,” with
the caveat that the reporting
entity must have
access to that market. Information
at
this level is based on direct observations of transactions involving
the same assets and liabilities, not assumptions, and
thus offers superior reliability. However, relatively few items, especially physical assets, actually trade
in
active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available,
FASB acknowledges that fair value measures
of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits
their use by saying they “shall be
used to measure fair value to
the extent that observable inputs are not available.” This category
allows “for situations in which there is little, if any, market
activity for the asset or liability at the measurement date”. Earlier in the
standard, FASB explains
that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect
assumptions made by market participants.
Recent pronouncements
On June 10, 2014, the FASB published Accounting Standards Update No. 2014-10 “ASU No. 2014-10”,
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable
Interest Entities Guidance in Topic 810, Consolidation. ASU No. 2014-10
removes the definition of a
development stage entity from the
Master Glossary of the
Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition,
the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements
of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity,
(3) disclose a description of the development stage activities in
which the entity
is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been
in the
development stage.
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
– (Continued)
The amendments also clarify that the
guidance in Topic 275, Risks and Uncertainties, is applicable to entities
that have not commenced planned principal operations. ASU No. 2014-10
will be applied retrospectively and will be effective for public business entities in interim and annual periods beginning after December 15, 2014. The requirements will be effective for nonpublic business entities
for annual periods beginning after December 15, 2014, and interim and annual periods thereafter. However, both public and nonpublic
entities will have additional
time to adopt the amendments to ASC 810. Early adoption is permitted in all cases. We have applied
ASU No. 2014-10 retrospectively by eliminating the inception to date column in our statements of operations and
cash flows."
NOTE 2 – PROPERTY AND EQUIPMENT
Motion
Picture Lighting, Grip, Film Gear & Post-Production Equipments have been
itemized under a fair market value, based on a comparison of current pricing
for identical or similar used motion picture equipment. Company’s Grip and Electric Truck (1999 Ford
F-80 Diesel purchased from Kodak) is listed as a separate asset item on the
Company’s balance sheets. Motion picture
gear includes lights, stands, grip and electrical gear, cameras, camera support
and audio recording equipment. Office
furnishings have been valued at the lesser of 50% of acquisition cost, or fair
market value for comparable, used office equipment and fixtures. Office computers, software and business
equipment have also been valued at the lesser of 50% of acquisition cost, or
fair market value for comparable hardware, software and business machinery.
Film Library - Regarding the asset valuation of the Film and Television Library, auditor’s report is reliant upon the
specialized expertise of the firm that performed the analysis to determine the ultimate values of the properties,
along with the representations in the Film and Television Library report that the projections and conclusions
conform to industry standards and practices in extrapolating such valuations as of the date of the analysis. The Film Library Valuation report and methodologies letter describing the practices in determining the ultimate valuations of each property for each applicable media right owned or controlled by Hannover House is included in this Form 10 Registration Statement under items 15 Exhibits.
NOTE 3 – NOTES PAYABLE
The NBCAL AFIL
P&A Loan refers to the balance due to the National Bank of California under
a one-year loan at 7% interest, proceeds of which were utilized for the
theatrical release of the film “All’s Faire In Love”; prior to the maturation
of the loan, the Company and the Bank agreed to an additional one-year
extension. However, the Bank subsequently
eliminated its portfolio of entertainment loans and staff, and the matter of
the term extension fell into dispute.
Hannover House ultimate prevailed in its goals to extend the loan and to
verify the proper balance due to NB Cal.
The Company has since been dealing with the counsel for the Bank and has
made several payments (totaling $105,840).
As of the date of this filing, Company believes that the balance due can
be resolved and retired during the current calendar year (2015).
The Houndog
P&A Note payable to Michael Weinreb is classified as long-term debt. The amount listed on the balance sheet does
not include reductions for payments made by Empire Film Group, Inc., and for
the value of Empire Film Group, Inc., (EFGU) shares paid in partial satisfaction
of this note. Company believes that its adjusted net obligation is likely to be
approximately $450,000; Creditor and counsel for creditor have been cooperative
and patient in allowing Company to build into a more solid financial position
before implementing a payment plan. The
Weinreb note accrues interest at a rate of 7%, and was originally due in
September, 2009.
The Graham
Financial Services note refers to a loan in the principal sum of $80,000 made
by Graham to Company in 2011, which accrues interest at the rate of 7% per
year; Company fully retired the Graham
note and interest, effective as of April 15, 2014, then renewed the principal
amount of the note.
Other Bank Note
refers to balances due to the Bank of Fayetteville on a term note that matured
in June, 2008. The note balance
continues to accrue interest at 5.5% per year; Company was recently offered the
opportunity to fully retire this obligation for a significant reduction in
balance.
NOTE 3 – NOTES PAYABLE – (Continued)
Long Term
Payables – Interstar Releasing – In 2009, legal counsel for Company neglected
to respond to a lawsuit by Interstar Releasing for royalties due on the film
“Dawn of the Living Dead.” As a result
of this default in responding, the Company lost the case and judgment was
entered. Despite being provided with
detailed accounting reports that clearly evidenced the amount of royalties due
as being $27,500, the Plaintiff filed a motion for almost $300,000 as
“estimated royalties” and the default status that the Company had been placed
in made contesting this arbitrary sum prohibited. The judgment was entered more than five years
ago, and as such, the Company considers this matter to be a very long-term
obligation, although legally due in full on a current basis. The Company has divided the debt into the
categories of accrued royalties (reflecting the actual amount earned for the
producer’s from the release of the film), and judgment balances / long-term
debts, reflecting the substantial, arbitrary additional amount that the
Plaintiff’s presented to the court as estimated royalties. The Company is exploring its options to
reduce its liability in this matter, including actions against the attorney
that had been engaged to represent the Company for malfeasance in not
responding to the complaint in a timely manner.
Long Term
Payables – Bedrock Ventures – Refers to a note due with respect to funds
advanced by Bedrock to Gaumont., S.A. in partial satisfaction of the licensing
fee due for the film “Twelve.” Company
has been making periodic payments to Bedrock and plans to continue during 2015
and 2016. Company has reserved its
rights and remedies with respect to a defaulted investment banking agreement
from Bedrock Ventures, for the funding of $1,500,000 to the Company, which
proceeds were relied upon by the Company before making the various acquisition
and releasing commitments for the movie “Twelve.”
Other Long Term
Payables – As of Jan 15, 2015, the Company had entered into performing
settlement agreements with all judgment creditors and significant Long Term
Payables vendors, with exceptions and updates as noted for the following
creditors (listed in alphabetical order):
ADS Group –
Company anticipates full retirement of this balance during 2015;
Accutrack –
Company’s payment schedule will retire this balance by March, 2016;
America On-Line
Ads – Company is awaiting acceptance of a quarterly installment plan;
Andersons
P&A Loans – Company has prepared a retirement plan for creditor’s
consideration;
Bedrock
Ventures, Ltd. – Company anticipates finalization of a mutually agreed payment
plan;
Deluxe Labs –
Company anticipates full retirement of balance by March, 2016;
Duplium
Corporation – Company is awaiting acceptance of a quarterly installment plan;
Fantastic Films
Intl. – Company is awaiting a reconciliation to determine balance (if any)
still due;
Hounddog –
Company anticipates full retirement of the balance on this licensing debt by
March, 2016;
Interstar
Releasing – Company is working with creditor to develop a payment and
resolution; see above;
Kalmbach
Publishing – Company anticipates full retirement of this balance during 2015;
National Bank of
California – See above.
Technicolor Labs
- Company is awaiting acceptance of a quarterly installment plan;
Tribune
Entertainment – Company is awaiting acceptance of a quarterly installment plan;
Weinreb –
Company is awaiting reconciliation to determine balances due after partial
payments;
Other vendors or
lenders with balances that Company plans to retire or substantially reduce in
2015 include:
Gentek Media –
Former replication lab for Company, still holding inventory and elements;
Graham Financial
Services – Promissory note for $80,000; may be renewed or extended;
Second Star
Investments – Company needs to structure plan with Creditor for retirement of debt;
Southwinds
Properties – Company needs to structure plan with Creditor for retirement of
debt;
NOTE 4 – EXECUTIVE
SALARIES
Executive Salary
Deferrals – Both Parkinson and Shefte have deferred receipt of most of their
salaries over the past five years, the balances for which are reflected in this
line item. Parkinson and Shefte were
originally contracted to earn or accrue a base salary of
one-hundred-eighty-thousand dollars (USD $180,000) each per year. Both officers voluntarily agreed in 2013 to
reduce this base salary by 50% to earn / accrue at ninety-thousand dollars (USD
$90,000) per year; effective January 1, 2015, the originally contracted salary
for each officer has been restored. At
present, there are no other cash compensation structures in place for either
officer for the performance of their duties.
NOTE 4 – EXECUTIVE SALARIES –
(Continued)
Based on
salaries paid to film and video industry executives working in a similar
capacity to Parkinson and Shefte, Company believes that the base salaries being
accrued represent a significant discount to market value.
Officer Notes
Payable – In addition to deferring most of their salaries, both Parkinson and
Shefte have loaned funds back to the Company for general operational needs, the
balances for which are reflected in this line item.
NOTE 5 – STOCKHOLDERS’ EQUITY
The Company is authorized to issue 700,000,000 shares of its
Common Stock, with a $.001 par value,
and 10,000,000 shares of its Series “A” Preferred
Stock, with a $.001 par value.
Common stock /
Preferred stock
As of
December 31, 2014, the Company had issued a total of 663,227,212 shares of
Common Stock and 3,000,000 shares of Series “A” Preferred Stock. The quantity of Common Stock shares that were
restricted from sale as of that date was 99,560,595.
NOTE 6 – INCOME TAXES
At December 31, 2013 and 2012, the Company had a federal deferred income tax payable of $732,598
and $459,754 respectively.
Reconciliation
between the statutory rate
and the
effective tax rate is as follows at December 31, 2013 and
2012:
2013
|
2013
|
|
Federal statutory rate
|
(35.0)%
|
(35.0)%
(0.05)%
35.0%
|
State taxes, net of federal
benefit
|
(0.05)%
|
|
Effective tax rate
|
(39.0).0%
|
(39.0).0%
|
NOTE 7 – MATERIAL EVENTS
VODWIZ
OPERATIONAL PARTNERSHIP - One of the
significant operational goals for the Company during the past three years has
been for the development and launch of a Company owned internet “portal” and
IPTV (internet protocol television) streaming venture known as “VODWIZ.” During the last half of 2012 and the first
quarter of 2013, Company conducted an extensive study into the technical,
hardware, facility and operational requirements for VODWIZ to be operated as an
in-house function of the Company. Due to
the heavy data flow requirements for the streaming of feature films in
high-definition over the internet, the implementation of an in-house operation
for VODWIZ would require that extremely high capacity fiber optic lines be laid
into the Hannover House offices, and that high volume memory banks and internet
switching software be purchased and installed.
Additional considerations, including clean-room environments for the
servers and back-up power generation abilities ultimately indicated that the
Company would be incurring an out-of-pocket expenditure of more than $1-million
to launch a venture which (until that date), had no revenue generation
history. In May of 2013, Hannover House
entered into an agreement with Ahnume Business Consultants, Ltd., to offset
this extensive expenditure to get VODWIZ ready for the market. The obligations of Ahnume included the
identification of an operational partner to help build the VODWIZ site, and the
procedures to store & service all data, streaming and technical / operational
functions. Ahnume provided an
introduction to NanoTech Entertainment, Inc. to perform all of these required
services for Hannover House in the development and launch of VODWIZ.
NOTE 7 – MATERIAL EVENTS – (Continued)
In consideration
of providing these services, on May 20, 2013, Hannover House authorized the
release of a total of 27-million shares of Common Stock to Ahnume, which shares
were restricted from sale under Rule 144 regulations. At the time of this issuance, the HHSE stock
price was trading at $.0119 per share, indicating a value of approximately
$321,300. Company managers determined
that the release of restricted stock (with a market value of approx. $321,300)
in order to alleviate both a cash need for more than $1-million and the
uncertainty of not having a technical specialist partner for VODWIZ, was in the
best interests of the Company and its shareholders. None of the officers, directors or principals
of Ahnume Business Consultants, Ltd. are attached in any other way to Hannover
House, Inc. in any such principal or managerial capacities. According to public filings for NanoTech
Entertainment, Inc., none of the officers, directors or principals of Ahnume
hold any such similar positions with NanoTech.
Hannover House has obtained contacts or commitments from ten outside
supplier studios to provide programming for VODWIZ.
The Company is
targeting a formal consumer launch of the website and IPTV Portal for late
April, 2015, at which time, it is expected that the initial product offerings
on VODWIZ will include more than 2,000 titles, including more than 100
higher-profile theatrical release titles.
INTERNATIONAL
SALES / ODYSSEY – Company entered into an agreement with Odyssey Pictures
International in 2013 for the participation of Odyssey in providing
international sales assistance and co-production funding of the Company’s
feature film production, “Mother Goose: Journey To Utopia.” As consideration for this participation,
Odyssey agreed to provide access to a studio production facility in Louisiana,
along with expertise for the monetization of State of Louisiana tax credits,
and a guarantee against international sales of $2-million, subject to
reasonable approval over final casting of the film. In May of 2014, Company participated in (and
financied the costs for) a sales booth and market presence at the Cannes Film
Festival / Marche du Film in Cannes, France, with a joint-sales presence with
Odyssey Pictures International. Both
Odyssey and Company received strong interest from international buyers for the
“Mother Goose” project, which validated the projects commercial prospects and
the Odyssey revenue guarantee. Company
agreed at that time to provide Odyssey with a North American distribution
commitment and guarantee for a forthcoming Odyssey feature entitled “Within
Screaming Distance.” Under the terms of
the agreement for this title, Company would be obligated to release the film to
at least six-hundred (600) theatres in order to qualify for a Netflix
subscription-video-on-demand agreement, proceeds from which would cover both
the theatrical releasing costs as well as the additional ($1-million) revenue
guarantee required for the North American rights. Subject to approval of the final cast for the
film, with John Malkovich pre-approved, the Company agreed to proceed. As of the date of this filing, there is no
certainty that Company will continue to utilize Odyssey for future sales of
international rights; Company is
exploring its options for international sales, including an expansion of
in-house efforts, or a division of title rights to different sales agencies,
based on historic strengths.
NOTE 8 – SUBSEQUENT EVENTS
During calendar year 2014, and up to January
15, 2015, the Company reports on the following subsequent events that have
occurred or been implemented:
·
Company made a material hire of a key executive during 2014, with the
engagement of home entertainment industry veteran Tom Sims as VP of Sales;
Company also hired additional staff and support positions, including Caitlin
McKenzie as Director of Sales, Katherine Mills as Director of Productions and
Regina Hurst as Office Manager / Administrative Assistant.
·
Company established a new special purpose corporation during 2014,
Medallion Releasing, Inc. (Arkansas) as a sales and distribution vehicle for the
representation of outside producer studio labels.
·
Company launched its first, direct sales activities into the
International Market in 2014, with a sales booth and presence at the Cannes
Film Festival and Marche du Film.
·
During 2014, the Company made significant reductions in the balances due
to TCA Global Master Fund for the credit line issued in May, 2013; Company anticipates that the TCA balances
will be fully retired during 2015;
NOTE 8 –
SUBSEQUENT EVENTS – (Continued)
·
Company made significant reductions in overall operating debts during
2014, with total payments, reductions or settlements totaling approximately $1,783,177 as compared to the payables / debt
balances on the balance sheet as of 12/31/2013 (for clarity, references to
sales and other financial activities during 2014 are based on unaudited,
management supplied data);
·
Company entered into agreements for supplier studios to participate in
the Medallion Releasing sales and distribution venture (for packaged goods) and
the VODWIZ streaming portal (for Video-On-Demand) programming. As of Jan. 15, 2015, Company had signed up
five supplier studios for Medallion and ten supplier studios for VODWIZ. Company plans to launch the VODWIZ V.O.D.
portal during 2015, and plans to present dates and launch details at the annual
meeting of Shareholders.
·
Company has agreed to distribute the horror-thriller “DARK AWAKENING” to
approximately one-hundred (100) theatres in late April or early May, 2015,
under contract with The Little Film Company;
·
Company has announced a total of fifty-five (55) new release titles for
the DVD / BluRay market to ship during the first seven (7) months of 2015,
including 20 re-released titles, and 22 titles from Medallion Supplier
Studios. Key titles from Medallion
Supplier Studios (in terms of initial retailer response and forecasted gross
sales) include: “3 Geezers” starring Tim
Allen and Oscar winner J.K. Simmons;
“Doonby” starring Christian-film superstar John Schneider; and “Love Beat the Hell Outta Me” starring
Terrance Howard from the hit TV Series “Empire” and the “Iron Man” feature;
·
Company has hired and completed production work with actor Luke Evans for
narration of the nature docu-drama “Bonobos: Back to the Wild.” Evans has risen in celebrity stature in the
past four years from his lead roles in a variety of box office hits, including
“The Hobbit: The Battle of the Five Armies”, “Fast & Furious 6” and “Dracula
Untold.” The film is planned for release beginning with an April 23 premiere,
with exhibition in Natural History Museums prior to an August, 2015 release to
DVD and BluRay.
·
Company is in negotiations with a private funding group to cover the
costs for four (4) feature films that would (eventually) be owned by Company,
subject to the retirement of the production costs. The films that are covered under this
agreement are: “ShadowVision”,
“Primate”, “Clown Town” and “Shuck & Jive.” Each of the productions is
planned for theatrical release to a level which qualifies for the Netflix
Subscription Video-On-Demand agreement; each of the films will also be produced
in a state offering incentive rebates (averaged at 25%).
·
Company has entered into an agreement with Renegade Motion Pictures
(Canada) for the production and distribution of the supernatural thriller, “THE
SUMMONING.” This film is planned for
production in May, 2015, in Louisiana.
The proposed theatrical release is planned for January, 2016, with a
minimum of 600 theatres in the USA and Canada.
The financing for both the picture’s production and releasing costs are
being provided through Renegade, with a revenue guarantee from Company backed
by presale agreements.
·
Company’s production of “Mother Goose: Journey To Utopia” requires a
total of at least nine-million dollars (USD $9,000,000) in cash or
services; based on existing commitments
from Odyssey, private investors, facilities and rebates, Company feels that the
elements essential to enabling the film’s production to proceed are now available
and committed. A schedule of the film’s
production, which is subject to the availabilities of key talent required under
the presale and coproduction agreements, will be released under a Form 8
statement as soon as the talent schedule is locked. The USA Theatrical release through Hannover
House is planned for at least 1,500 theatres, and a major (restaurant)
cross-promotional partner is expected to help promote and support the film’s
release. The Company feels that the
“Mother Goose” project has the potential to generate significant revenues from
the USA marketplace, and in doing so, elevate the Company’s stature.
Item 15(b) – Articles of
Incorporation / Company ByLaws.
XBRL LINKS TO PDF SCANS OF
CORPORATE DOCUMENTS.
Item 15(c ) – Additional Exhibits
Provided by Company.
LISTINGS FOR KEY PROPERTIES, NEW
RELEASES AND CURRENT PROJECTS
* * * * *
