General Update - Sunday, Sept. 24

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

1).  BATTLECREEK response to last week's new release announcement has been superb. The rising star stature of our leading man (#1 IMDB Star!) has motivated media and theatres like we've neve before experienced.

2).  CRIMSON FOREST Update - this is their final week. If we are unable to receive the needed istoric back-ups required by our more thorough audit requirements, we will have to proceed with HHSE as the audited entity. Due to new reporting activities implemented in 2015 for audit compliance, it is easy now for HHSE to promptly satisfy all audit practices and supporting documentation.

3).  "DEFAULT" JUDGMENTS - some shareholders have asked about two old "foreign default" judgment cases - and the company's strategy to address these. Firstly, as evidenced by our succcessful total "freeze" of collections activities by TCA GLOBAL last year, the laws of the State of Arkansas allow for "foreign default" judgments to be contested and defended. TCA was an actual, true obligation:  HHSE had borrowed money and paid it back in full... but TCA was pressing for usurious interest and unearned fees. Still, because it was a default from another state, HHSE attorneys were able to completely stop collection-enforcement activities, and ultimately force a fair and reasonable settlement. In the cases of both BEDROCK and INTERSTAR, there is no legitimate basis to their claims - so setting these aside should be even simpler. BEDROCK clearly committed fraud by failing to provide HHSE with the required $1.5-mm in funding; it was quite bold of Bedrock to sue to be repaid the partial amount that they DID finance ($500,000), because Bedrock received 200-MILLION shares of HHSE stock (then known as TDGI) in consideration. To sue us for repayment of proceeds which were only a partial payment against the total stock purchase and investment transaction opens up a variety of remedies against Bedrock and its principals (including stock and criminal charges). Now that Bedrock has moved this fraudulrnyly obtained foreign judgment into Arkansas, our attorneys will move swiftly to freeze collections actions and open up the case for adjudication. In the case of INTERSTAR, there is an actual balance of $27,000 due for royalties of "Dawn of the Living Dead" which we have offered repeatedly to pay. However, Barry Strudwick (an assignee of this matter) filed a false report with the CA courts after getting a default judgment - and misrepresented that the amount due was more than 10-tines the actual, verified obligation. The Arkansas courts have little patience for puffery and malicious invention - as was shown in our victory over a similar "inflated" royalty request by Amityville Asylum earlier this month. Bottom line for these two, easily contested, fraudulent judgments is "bring it on," in the State of Arkansas, as we look forward to removing both claims from our balance sheet.

This is a big week for HHSE. We are positioned for significant wins in publicity, theatrical promotions, corporate structuring and legal adjudications. Sit back and enjoy the ride!

Onward and upward...

GETTING GRACE wins all top four categories at NYC-Metro Film Festival

HHSE Congratulates our good friend, actor-director DANIEL ROEBUCK on your victorious SWEEP of all four top awards this past weekend at the NORTHEAST FILM FESTIVAL (NYC- NJ Metro).  WOW!  What a great way to launch your inspiring movie!  GETTING GRACE... well, I guess they GOT it!!!

AUDIENCE FAVORITE

BEST ACTRESS

BEST DIRECTOR

BEST FEATURE

http://www.nefilmfestival.com/

Congratulations to HHSE star Bill Skarsgård - on your #1 Movie and #1 Star Ranking!

Greetings HHSE Friends & Followers - It doesn't get any better than NUMBER ONE - so it's doubly-exciting today to announce that HHSE star Bill Skarsgård not only has the top movie in the world... but he is also listed on IMDB as the #1 Star in the World.

We are excited to be releasing Bill's next film, "BATTLECREEK" - which opens in theatres on Friday, Nov. 3, from director ALISON EASTWOOD.  Go HHSE!!

HHSE Update - as of Sept. 9, 2017

Greetings HHSE Friends & Followers - as promised, here is a brief update of key issues.

1).  CRIMSON FOREST  - The principal updates for the corporate merger with Crimson Forest all relate to Audit issues (see below). As previously disclosed in this blog, the ongoing review of Crimson activities indicates that the merger valuations will need to be significantly modified in favor of Hannover House shareholders. Regardless of the valuation levels that can be independently substantiated, the stock-swap portion of the merger cannot occur until Crimson is restored to fully reporting status - as this is a requirement for our planned immediate re-branding (plus, why would HHSE shareholders want CRIM shares - even if only briefly - while Crimson has a STOP sign on their OTC markets page?). 

2).  AUDIT ACTIVITIES UPDATES - New auditors were engaged to handle the Crimson Audits, as are required in order to restore CRIM to fully reporting / current status (which current status triggers the stock-for-stock swap, as well as the immediate re-branding of the newly merged pubcos). The new auditing firm is much larger than the auditors that handled previous Crimson reporting requirements... and the new firm has compliance standards that have been more challenging than the existing back-up from Crimson records of previous years. To address these requirements, two steps have been implemented, including:  

a).  Input of all transaction data into an exportable QB format by an outside accounting firm; and, 

b).  Forensic accounting for back-up of transactions previously expensed or capitalized by Crimson, which need independent review by the new auditors, despite representations of review from the previous auditing firm for Crimson.  

HHSE board members (Parkinson, Shefte and Sims), met last week to discuss time lines and options regarding the merger with Crimson Forest, and the problems that have been encountered relating to obtaining suitable back-up for prior Crimson Forest activities. In respect of the many other deals and activities in motion for the company, the board has determined that Sept. 30 shall be the latest, reasonable date to allow Crimson Forest to comply with the required documentation for the auditors. 

HHSE accounting and audit materials are fully current and properly formatted to enable the HHSE side of the merger to easily and quickly become fully reporting - which may be a reasonable option should Crimson Forest continue to delay in its willingness or ability to provide appropriate and required compliance documentation.

UPDATE - As a further clarification to the above two items concerning Crimson Forest, shareholders have asked for the corporate options for a road-map to achieve fully reporting status, regardless of merger status. Per discussions with HHSE's advisors, as well as the corporate counsel for Crimson Forest, the following options seem to be governing the steps that will occur if Crimson is unable to fully comply with document requirements by Sept. 30.

1).  First Option - Crimson provides required back-up in a timely manner, the auditors complete ongoing report, all "current" Crimson docs are then filed and the merger swap is completed, as per the March agreement (with the valuation adjustments since then).

2).  Second Option - Crimson is unable to provide appropriate back-ups for the auditors, so HHSE files the Form 10 (and two-years of audits, which are already formatted for submission), and HHSE becomes the "fully reporting" entity for which the stock-swap can occur with Crimson (again, under valuation adjustments).

3).  Third Option - Crimson is unable to provide appropriate back-ups for the auditors, but desires to keep working with HHSE for production, distribution and finance matters (but not as a singular, merged company), so the HHSE would proceed (on its own) to become fully reporting for the benefit of HHSE Shareholders and stock liquidity.

4).  Fourth Option - Crimson is unable to provide appropriate back-ups for the auditors, and the two companies seek an orderly dissolution of the merger process, without specific ongoing corporate activities specified. Under this scenario,  HHSE would proceed (on its own) to become fully reporting for the benefit of HHSE Shareholders and stock liquidity.

We have enjoyed  our working relationship with Crimson Forest this past year, and we believe that all parties are working to achieve a positive resolution to our shared, corporate goals. One way (or another), we are graduating off the Pink Sheets as a trading equity, and feel that this corporate maturation will deliver great value to our Shareholders.

3).  VODWIZ - As of 7:00-pm CST (Saturday, Sept. 9), we have not received word back for the release of new partnership news relating to VODWIZ program suppliers... we expected this by today, but will honor the studio's schedule and approval process.

4).  NEW RELEASES - Here's a quick summary of some of the previously unannounced (or delayed) titles that will be driving the majority of revenues for HHSE-Medallion over the next six months:

a).  BLOODFEAST - finally received a "R" rating from the MPAA after three rounds of edits. Accordingly, the title is now eligible for release to the major theatre circuits as well as for Walmart, Redbox and Target home video placement later. New release plans are in motion.




b).  BATTLECREEK - On the heels of the mega-hit "IT" now setting box office records in theatres, HHSE / Medallion is pleased to announce the Nov. 3 theatrical release of "Battlecreek" from director ALISON EASTWOOD - and starring BILL SKARSGARD ("IT"), DELROY LINDO ("Gone in 60-Seconds"), PAULA MALCOLMSON ("Hunger Games") and CLAIRE VAN DER BOOM ("Hawaii Five-0").  Early enthusiasm from theatres and home video retailers is already quite significant for this title. National Media Day Oct. 24 (LA), Red-Carpet Premiere Nov. 2 (LA).

c).  DEATH HOUSE - Imagine a movie with nearly ALL of the biggest horror film stars from the 1980's and 1990's - all together on Halloween night, in one location, for one incredibly funny and outrageous horror film?  That's DEATH HOUSE, and producer RICK FINKELSTEIN ("Bill & Ted's Bogus Journey") thinks that this new film from director B. HARRISON SMITH ("Camp Dread") will be a huge, sleeper hit release. Coming to theatres on Jan. 26, 2018.

5).  ADDITIONAL VICTORIES / RESOLUTIONS - A separate and detailed blog about recent settlements (or victories) in prior legal matters impacting HHSE / Medallion has been prepared. However, under advice from counsel, and in order to respect the release of information from the courts or the confidentiality of terms, this portion of the blog update is not ready for release as of today, Sat., Sept. 9. 

6).  NEW HHSE STAFF HIRES - We are pleased to announce the return of Desiree Garnier as our Director of Marketing.  Desiree worked with Hannover House / Medallion throughout 2015 and through July of 2016 when she joined the start-up team at Rock Hill Studios (the Fayetteville, AR based motion picture production studio owned by Blake and Kerri Elder).  After a year at Rock Hill - during which time Desiree supervised the construction of the largest sound stage in the State of Arkansas, as well as the production of the horror film, "Door in the Woods" - she has returned to HHSE to help with our impressive slate of theatrical features for the fall and winter seasons.

7).  NEW DISTRIBUTION PARTNERSHIPS - HHSE / Medallion have entered into a distribution agreement with Random Media (the indie studio headed by former Paramount President Eric Doctorow and indie-film producer Tom Skouras). Random will be handling a significant portion of the upcoming release slate for Video-On-Demand placements and Television licensing. Additionally, Random was the catalyst for an exciting new distribution pact with Sony Pictures Home Entertainment, details of which will be announced separately, but which will involve selected titles. HHSE / Medallion will continue to maintain and service the existing distribution relationships with Cinedigm, Vision, All-Channel Films, Entertainment Studios and other key distribution partners.

HHSE Weekly Updates...

Greetings HHSE Friends & Followers - we are preparing an update for this week's acitivities that we plan to post to this blog tomorrow (SATURDAY).  The purpose of posting tomorrow instead of today is to allow two key outside parties time to review and approve the information that concerns them.

FYI, what will be covered will include:

1).  CRIMSON FOREST Merger updates

2).  AUDIT Activities updates

3).  VODWIZ New Activities

4).  NEW RELEASE Activities (Theatrical, HV / VOD / TV).

5).  ADDITIONAL VICTORIES / RESOLUTIONS in old legal matters.

6).  NEW HHSE STAFF HIRES

7).  NEW DISTRIBUTION PARTNERSHIPS update.

What we can go ahead and "tease" today is the MONDAY announcement via Wire Services and EPK.TV of the October 6th release of "DAISY WINTERS."  This is a powerful, awards-caliber feature film that will be supported with HHSE's biggest marketing campaign ever (TV, Print, Internet, Radio and Social Media will deliver more than 350-million consumer impressions!).  Full details will be released on Monday.

HAVE A GREAT WEEKEND!!

HHSE scores another major legal victory - as we transition into a new era for higher-quality films!

Greetings HHSE Friends & Followers - Hannover House achieved a major legal victory on Wednesday with the ruling in HHSE's favor by the court in the "AMITYVILLE ASYLUM" case. Bottom line is that the producer's claims for "damages" in this contract law dispute were supported with (quote from the presiding judge) "... no credible or reasonable evidence" - and the ruling was made in favor of Hannover House.  The judge further stated that the accounting reports from Hannover House appear to be "very thorough"  and with "third-party verification" of units sold, units returned, monies paid and amounts due.

Although the producers of "AMITYVILLE ASYLUM" were seeking a total of $300,000, the court ruled that all they were entitled to was $12,651 - which is the net balance due on actual, earned royalties.

HHSE had previously offered to settle for a far greater amount than the actual royalties, to avoid the nuisance and distraction of ongoing litigation. But the Amityville producers rejected this lucrative offer in favor of hoping to persuade the court that they had somehow been mistreated. The principal evidence that they submitted to support their claim of "damages" was a statement of "projected earnings" from Alchemy Entertainment, Inc., on four totally different movies. But Alchemy filed bankruptcy and ultimately never paid anything to the Amityville producers - thus rendering the Alchemy valuation forecasts as unreliable.

During testimony received via SKYPE from Wales, Amityville principal Robert Graham admitted under oath that the film was intentionally titled "Amityville Asylum" in hopes of confusing consumers into thinking the film was part of the successful AMITYVILLE HORROR film franchise. This sworn testimony supported Hannover's claim that many retailers refused to carry the title out of their concern for potentially confusing and upsetting their customers. This specific admission under testimony could be used in a trademark claim, should Emmett-Furla Films or MGM (co-owners of the true "Amityville Horror" franchise), decide that this willful infringement merits legal action. But that's not a HHSE matter of concern.

The biggest victory is the court's ruling that the HHSE statements represented an accurate and verifiable history of sales activities for the titles... and how today's victorious result may temper the enthusiasm for future, baseless claims from any other producer of "projected losses" or damages. The HHSE producer reports were accurate to the penny - and fully conformed to the independent third-party back-up.  For a producer to claim that they are owed MORE than the HHSE-generated producer statements, is fundamentally a false assumption and one that will never win over basic math.

HHSE provided a fully accurate statement to "AMITYVILLE."  We tendered the first of four, mutually-agreed installment payments (three payments at $5,000, plus one of $2,751), but before the second payment was released, the Amityville producers filed a lawsuit. Ultimately, three years later, they got exactly what the title was due, period. No punitive damages, speculative or projected earnings...none of that complete nonsense.

In 24-years of operations, Hannover House has been named (often as one of multiple-named parties) in NINE (9) lawsuits from program suppliers, representing a total of 17 films.  This represents an extremely low percentage of unhappy producers (about 3.7%) out of our 451-title film library.  As a point of comparison, the industry's two largest indie studios (LIONSGATE and WEINSTEIN COMPANY) are reported to have producer lawsuits in 10% and 25% (respectively) of all films handled.  This does not mean that any of the companies are doing business in a dishonorable way. It just means that producers almost ALWAYS have very high expectations for how they THINK their movies should perform... and the distributor usually gets the blame, even when a film gets horrible reviews from film critics (how is that the distributor's fault?).

As HHSE grows into the evolving media market for independent films - our new business model of handling HIGHER PROFILE titles and ORIGINAL PRODUCTIONS is expected to dramatically reduce or eliminate future producer lawsuits. If we are no longer handling micro-budgeted films from first-time producers, we won't need to waste time in a courtroom explaining how math or consignment video sales work. We are NOW dealing with a higher class of program suppliers, and are intimately involved in the production processes of most of these films - to create better quality titles with the greatest commercial value. It's the beginning of an exciting era for HHSE, and corresponds with the end of the micro-budget, direct-to-video market. Consumers demand better quality films, with original stories, quality production values, known stars and legitimate theatrical release... that's our 2017 - 2018 and beyond business model, so stay tuned for more!

... last but not least, speaking of EMMETT-FURLA films, here's an oldie-but-goodie photo of HHSE C.E.O. Eric Parkinson with RANDALL EMMETT and CURTIS 50-CENT JACKSON at the Sundance Film Festival.  Parkinson has worked with George Furla and Randall Emmett on five prior productions, including "FUTURE SHOCK" (directed by Parkinson) and "GRIZZLY MOUNTAIN" (written and Produced by Parkinson).  "FUTURE SHOCK" is an HHSE title for worldwide rights;  "GRIZZLY MOUNTAIN" is a MGM-UA title.