Update on Form 10 Filing

Greetings HHSE Friends & Followers - As communicated in a recent blog, all of the work required of the HHSE management for use in the updated Form 10 (including the recently added 3-31-2020 details), was completed in a matter of days (by mid-April). 

However, getting third-party responses to various issues (including audit verification of material items and revised corporate tax returns to reconcile with the amounts of the IRS payroll tax levies), have both proven to be impacted by the current COVID-19 general shut down of businesses in the U.S.A.  While our audit team is still working "from home" - the GAAP requirement of receiving third-party verification on all major items of material value is challenging when the third parties are businesses that are functionally closed at this time.  Even trying to contact the IRS telephonically is impeded - so these issues have created a slightly longer delay in the finalization of the Form 10 than would customarily exist.

We are investigating the options to file "as is" under the COVID-19 limitations, and if such a move would be deemed reasonable by the S.E.C. under the current circumstances. 

There is no precedent in the history of the Securities and Exchange Commission for exceptions to customary requirements in a time of general emergency. Yet, there is also no precedent for the general shut-down that COVID-19 has inflicted on our society and business and governmental operations. In fact, the S.E.C. was one of the very first agencies to recognize the contamination threat from the Coronavirus when they made the decision to indefinitely shut-down their Washington, D.C. offices back in early March.  Accordingly, there is an expectation from HHSE advisors that a reasonable request would be considered. 

As new information is obtained, we will update this blog.

Meanwhile, stay safe and stay long.

Best Wishes - HHSE MANAGEMENT

HHSE Filings

Happy Easter / Passover and Spring to our HHSE Friends & Followers!

The company's 3-31-2020 filings have been submitted to both the OTC Markets site, as well as to M2 Compliance for XBRL Formatting and submission to the Securities and Exchange Commission.

Based on short-staff at the present moment for M2 Compliance, the formatting process will take slightly longer than is customary. However, they are indicating that the filing should be published onto EDGAR by Tuesday.

Stay Safe and Best Wishes!

HHSE MANAGEMENT

HHSE Strategy to maneuver through COVID-19 delays issues with the Securities and Exchange Commission

Greetings HHSE Friends - As everyone now knows, the COVID-19 pandemic has resulted in the functional closing of most businesses as well as the governmental service agencies moving into either a complete hiatus - or in some instances, reduced staffs or work-from-home staffs. 

The Securities and Exchange Commission was one of the first governmental agencies to move to a work-from-home policy in early March, and this immediately raised concerns for Hannover House with respect to our Form 10 Registration filing and the timing of the S.E.C. review of that submission. 

In respect of what is already being predicted as a 45-to-60 day backlog with the S.E.C., it has been recommended that Hannover House include the just completed 3-31-2020 numbers into the Form 10 filing (under a  CPA "review" quarter to supplement the two full "audit" most recently completed full years). The purpose of adding in the 3-31-2020 numbers is to protect against the possibility that the Form 10 could become stale while awaiting S.E.C. comments or approval.  It is unknown if the prior policy of automatic registration for issuers on the 60th day following a registration filing is still in effect.  Assuredly, we are advised, the S.E.C. comments to the HHSE Form 10 would not be provided before the 60th day if we were to file at this unusual moment in time. 

Accordingly, we are taking the safe route and including the 3-31-2020 numbers.  Early this week, this quarterly report will be released to the S.E.C. Edgar site (and simultaneously to the OTC Markets site). Days (not weeks) later, the 3-31-2020 numbers will be included in the Form 10 filing, which will be updated through the XBRL formatting process to be consolidated into the company's Form 10 registration filing.

Meanwhile - we continue to navigate the other issues that have been impacted by the COVID-19 shutdowns.  For instance, all of the courts for which HHSE has active matters are technically shut down, except for electronic access of filings for parties already recognized by the clerks of the court as an approved and recognized respondent. Accordingly, some of the filings that HHSE has prepared or submitted do not yet appear on publicly-searchable court docets.  It's "as if time were frozen" in the Arkansas, California and Pennsylvania courts back in mid-March.  Our attorneys have assured us that ANY filings made electronically by any other parties will not usurp the additional time that the courts have granted to ALL respondents in ALL cases as a result of COVID-19 courthouse closures.  So time remains frozen at the courts, and nothing of consequence can occur until the courts re-open and the time clock returns to the moment when the courts were closed (in respect of the number of days that a particular response would have been due prior to the closure of the courts). 

One more item of interest, and it seems a bit mercenary to even mention this. But, HHSE titles on streaming sites are having a RECORD month.  People are following the CDC guidelines to "stay at home" - and streaming services are reaping the benefits.  It's an unexpected silver lining to an otherwise very dark cloud that has cast its shadow over our economy, our nation and the entire world.

Stay strong, stay safe, stay at home and STAY LONG on HHSE!

Pick-up Shots and Second Unit Filming continues on the feature film "WILDFIRE" - while adhering to the State of Oklahoma guidelines to limit gatherings to ten persons or less, and "social distancing" as much as possible. Special Thanks to the CHEROKEE NATION MARSHALL'S DEPARTMENT for providing emergency vehicles and officers for key Third Act search and rescue sequences. 

Temporary closure of COURTS will not negatively impact HHSE Form 10 Filing

Dear HHSE Friends & Followers - a few shareholder emails have asked if the temporary "freeze" now in effect for most courts nationwide will in any way hinder or impact the HHSE Form 10 filing.

The answer is "no." Basically, the closure of the courts is being viewed as a freezing of time beginning yesterday.  If as of yesterday (March 16), a respondent to a case had 12 days remaining to meet a deadline, that respondent would still have 12-days PLUS the 30 or 45-days that the courts are on hiatus for the COVID-19 matter.

We do not see the temporary closing of the courts as having any negative impact whatsoever on our operations or on the Form-10 filing.

ONWARD!

Suppression Efforts for COVID-19 have Impacted the Entertainment Industry in Ways that Benefit HHSE / MyFlix

Greetings HHSE Friends & Followers - the last week or two have been historic, transformative, frightening and enlightening, as the nation and the world "hunker down" in an effort to suppress the spread of COVID-19 among the general population.

With the Dow Jones and general stock market crashing - and businesses of all sorts forced into a temporary shut-down - it's hard to see anything positive at times. People are hurting financially, medically and emotionally. Stores are reporting a run on the sales of staple-goods (and toilet paper!), and gun shops have record crowds, as if it's time to prepare for a zombie apocalypse.

But hidden within the onslaught of serious and impactful news have been some entertainment industry developments that have a real-world impact onto Hannover House.

For the first time EVER, two major studios (DISNEY and UNIVERSAL) have "broken the NATO rule" that prohibits home video release or digital streaming of films until at least 89-days after their initial USA theatrical release. Part of the motivation for these two studios was a result of the voluntary limitation of seating at AMC Theatres nationwide, and the more severe "temporary closure" of all Regal, United Artists and Edwards Cinema locations. It's hard for the theatres to be angry at the studios for breaking the NATO rule, if the theatres are closed or limited in sales. By the way, NATO stands for "National Association of Theatre Owners" and should not be confused with the North American Treaty Organization.

The next piece of impactful news for HHSE is the prediction now being reported within the financial trades that Cineworld (owner of Regal Entertainment Group and Cineplex Canada) will be forced into bankruptcy as a result of their theatres being closed during the COVID-19 outbreak. The most likely outcome of a Cineworld bankruptcy would be the dividing of their 7,000+ screens in North America to a series of regional players.

If the movie theatre chains no longer wield the power to control the digital streaming windows, and the behemoth status is returned to a series of regional theatre chains - companies like Hannover House can flourish with "day-and-date" releases of movies to theatres AND onto direct digital streaming at premium rates (e.g.., $9.95 to $19.95 to stream a film that's currently in the theatres...as opposed to the $1.99 to $3.99 that HHSE titles otherwise command for streaming rentals months after theatrical release).  Theatrical releasing is super-expensive... often at a cost of $4,000 to $6,000 PER LOCATION once the costs of the "Virtual Print Fee," master delivery, display support materials, local market PR outreach and targeted social media are added into the mix. With theatres keeping 60% of the box office gross (and sometimes even more), a film has to gross almost $10,000 per location JUST TO BREAK EVEN under the current model.  Over 90% of films do NOT recoup their theatrical releasing costs from box office settlements.  So why do it?  Because the theatrical exposure almost always drives enhanced revenues for home video and streaming three or four months later.

When you look at the MATH, making a film available onto premium digital streaming at the same time as it's in theatres, is over 8-times MORE PROFITABLE for a company like HHSE than waiting four-months and getting the much lower transaction fee. Also, from a cash-flow basis, revenues from digital streaming can be collected in 30 to 45 days... whereas theatrical revenues can be on a 75-to-90-day basis.

SO - if as a result of the COVID-19 shut-down - the industry windows for digital streaming continue to collapse, this is a VERY GOOD outcome for Hannover House and for the digital streaming industry in general (including MyFlix).  More-and-more, people are skipping theatres and consuming their entertainment at home, on high-definition large format televisions, and choosing to watch what they want and when they want it.  Paying $19.95 for the whole family to stream a first-run movie is way cheaper than buying five full-price theatre admission tickets, paying for parking, paying ridiculous concession prices, and sometimes paying for a babysitter. It's basic family economics... and this development is VERY GOOD for HHSE.  So, fingers crossed that this change in distribution windows survives.

In the meantime, please hunker-down, be safe, practice social distancing and GO LONG on HHSE!

Greetings from Beverly Hills (?)

Greetings to our HHSE friends and followers on this Wednesday, March 11, 2020.

No, the HHSE Managers are not REALLY in Beverly Hills today. That was just a joke, because we are prohibited by law from making any false statements - such as if one of us were to pretend to be a woman living in Beverly Hills. In reality, we had a much less flamboyant day in Fayetteville, Arkansas today, reviewing the issues of balance sheet reconciliations of the 1120-S Corporate returns vs. the consolidated financials contained in our Form 10 Registration.  Fortunately, our new CFO (Randall Blanton) is also a CPA and auditor, so his skill sets are making these previously daunting tasks much simpler for the company to complete. 

One of the issues that Parkinson and Shefte are the MOST EXCITED about in the immediate “post-Registration” time period, is the long-awaited filing of the multi-million dollar civil action against the four “HHSE stock critics” (who collectively post on stock chat boards under 14 alias identities). Those who follow HHSE will know that these coordinated trolls have a wanton disregard for the truth, and that they spew a relentless barrage of disparaging diarrhea against HHSE in a frantic scramble to invent new reasons for shareholders to dump their shares. The newest lie birthed just yesterday was that Randall Blanton is not REALLY working as our CFO. This was quite surprising for Mr. Blanton to read this today - and he speculated that the parties manufacturing such baloney “must be really desperate” to be trying so hard to hurt HHSE. Why, he wondered?  What would be putting the squeeze onto someone so powerfully as to motivate them to make statements that are SO EASILY DISPROVEN as total BS?  

I guess we will find out VERY SOON as the civil lawsuit contains a section in which the names, addresses, emails, telephones, alias names (and even photographs) of the four HHSE stock critics are disclosed within the lawsuit for all the world to see. Perhaps the mystery of these four little boys will finally be known to all of the public, the S.E.C. and even the U.S. Attorney’s office  Stay Tuned!.

In the meantime - stay safe, stay clean, and stay LONG on HHSE!

Hannover House Shareholders Meeting Delayed pending Form 10 Registration Filing

(Fayetteville, AR) The annual shareholders meeting for Hannover House, Inc. (OTC: HHSE), scheduled for Saturday, March 7, 2020 is being delayed to allow for outside vendors to complete items needed for the company's Form 10 Registration filing,  according to company President D. Frederick Shefte.

"The primary issue of interest for the shareholders meeting is the discussion of the content of the Form 10 Registration Statement," said Shefte.  "However, we are still waiting for a few required items from our professional advisors, including some unforseen issues - such as conforming the separate tax returns for three operating corporations into the company's consolidated financial statements.  There are some additional third-party verifications needed for the audit and two OTC compliance filings, all of which are in motion, but not yet completed," he concluded.

Hannover House, Inc. has been trading on the OTC Pinksheets market since December 2009. It has been the company's goal for several years to uplist to the OTC QB exchange, which occurs through the formal registration process with the Securities and Exchange Commission.  Existing Hannover House shareholders believe that the transparency provided by a fully-reporting company will encourage new investors and funds to consider the stock and the new ventures that Hannover House has in motion.

Shareholders will be updated via the Hannover House corporate blog site as to the rescheduling of the Shareholders meeting… which is planned to occur within three-to-five days following the Form 10 filing.