1). OTC-MARKETS UP-LIST STATUS - As mentioned in prior blogs, we have been advised to convert our financial reporting to a "cash" basis as opposed to accrual accounting. This has been done for the most part, but with some revenue exceptions for contractual receivables. Accordingly, futures-payments on contracts (whether in the form of a pre-sale payment guarantee, or an international sale license, or even for "mastering" and on-boarding fees for MYFLIX titles), will NOT be reported in our audited filings as REVENUES, but will be foot-noted as a contract receivable.
Under G.A.A.P. rules, most businesses do not record a sale as a receivable or revenue until AFTER delivery or shipment of merchandise (or the completion of a services contract for which payment is therefore undeniably due). With respect to MYFLIX mastering receivables, these only become collectible AFTER the launch of the MyFlix site... and international sales only become enforceable after a film is fully ready for delivery (or has been delivered, and is awaiting payment). It would be misleading to NOT include contract sales in financial footnotes, otherwise, an investor, lender or shareholder would not have an accurate view of the company's activities and financial future. However, for simplicity in having the company's 1120-S Corporate Returns conform to the cash balance sheet reporting for OTC Markets and Edgar, we are hereafter reporting on a CASH basis. The 12-31-2024 filings (posting tomorrow) will include both the accrual accounting year-end, and a separate balance sheet showing how these results will look under a fully Cash-Basis accounting. SUNDAY NIGHT UPDATE: HHSE was just advised that the 12-31-2024 report being filed tomorrow with the OTC Markets should ONLY show the existing format of financial reporting that HHSE has been following for years (e.g., a mix of cash reporting and accrual for contracted sales). To also include a "cash only basis" balance sheet and financials may be confusing to shareholders and may violate the OTC rules, possibly resulting in the year-end report being declared deficient. Rather than risk that outcome, we will refrain from posting the cash-only basis financials until we file the OTC Markets Up-list (and audit letter) in April.
.JPEG)
Timing wise, we will release the OTC Markets up-list application as soon as we receive the final blessing from auditors that our cash-basis adjustments (and all necessary back up) have been properly itemized and confirmed. There are some remaining costs for the completion of this process, and multiple means are being pursued.
2). TRUMP BOOK - At the request of Barr McClellan, Hannover House delayed and rescheduled the release of his book (AMERICAN MANIFESTO) in order to enable Barr to include new information about the inauguration and the first 100-days of the second Trump Presidency. Hannover House has received delivery of the modified and updated manuscript and will be releasing the E-BOOK version in April and the hard-cover edition in June. The launch of the E-BOOK also triggers some very high profile television news appearances for both Barr McClellan and HHSE CEO Eric Parkinson - which should have a dramatic impact on sales of both formats.
3). WILDFIRE - Full delivery has been completed for master elements and documents regarding a major studio partnership for the release of this film... stand by for this significant news... which is positively impactful not only due to the prestige of a studio partner on HHSE's first major production... but also due to the significant upfront licensing fee.
4). UNHOLY SONG - The film continues to please audiences as its limited theatrical release rolls out... including two sold-out shows in Stockton, CA this weekend, and upcoming theatrical runs for LOS ANGELES and NEW YORK. The film will hit streaming services in June and DVD and Blu-Ray formats in August. Due to the size differential of a video package as compared to a full one-sheet theatrical poster, the DVD and Blu-Ray packaging will feature the "Witch in Flames" concept... as opposed to the smoking tape recorder that is seen on the film's theatrical poster. We are very excited to have contracted with FANGORIA for a major promotion in support of the STREAMING launch of UNHOLY SONG in June. The Fangoria support includes a feature story, a "website take over" (e.g., top banner and side ads), a color ad in the print edition of the magazine (at newsstands and Barnes & Noble Stores) and two outbound email blasts to subscribers and opt-in mailing list members. Collectively, the Fangoria support promises to deliver 3-million consumer impressions... most of which will have a HOT-LINK to the TUBI page for the film (HHSE gets paid EVERY TIME someone watches a film on TUBI).
One of the most successful elements of the UNHOLY SONG Marketing Campaign has been the production and distribution of the "COMIC BOOKS." Thousands of copies of these have been placed in theatre lobbies for up to four weeks prior to the film's opening at that location... and the cliff-hanger ending has fueled audience interest to see how it ends. From the data of results vs. locations without the comic books, the costs to design, print and distribute the comic books delivers a lower "per impression" cost - and more effective conversion rate - than any other major (and directly measurable) form of media outreach. This is superior and creative marketing on a shoe-string budget!
.JPEG)
