Summary of Key Items from Manager’s Discussion Meeting of Mar. 7, 2012.
The Principal Managers of the Company, specifically Eric Parkinson (CEO) and D. Frederick Shefte (President) held a planning and strategy meeting on Wednesday, March 7, 2012 at the company’s principal offices in Springdale, Arkansas. The meeting commenced at 1:00-pm Central Time and covered a variety of operational and corporate issues. The principal Discussion Items, and the actions agreed upon by the Company Managers are described below:
Discussion Item a). SUMMARY OF COMPANY’S CURRENT FINANCIAL STATUS – At the request of some of the Company’s primary shareholders, the Managers of the Company elected to address the false rumor that some form of stock issuance or debt-to-equity conversion was planned. As discussed in the annual shareholder’s meeting, and to be clear, there are no actions or planned actions involving any form of new stock issuances or debt-conversions requiring stock issuances. Any rumors making contrary statements are blatantly wrong and clearly an attempt to manipulate the stock value. The TDGI / HHSE shares are trading at a pricing level that the Managers have accurately identified as being substantially below the Price-Earnings ratios for the entertainment industry sector (by a factor of almost 3-X). At the same time, the Company is enjoying record DVD and VOD sales activities, which have created a manageable cash-flow situation for current operations, future title releases and payables management.
Discussion Item b). APPROVAL OF MULTI-TITLE OUTPUT VENTURES – In respect of the ongoing sales success that the Company has been enjoying with films from Studio 3 Entertainment, LLC and director Brian T. Jaynes, a discussion was held covering the proposal from Jaynes to structure an “output” arrangement. Under this structure, Jaynes and the production entities established for each venture, would deliver to Hannover House a minimum of three (3) new productions each year for the next two years. The terms of the distribution would be identical to the terms already in place for “Boggy Creek”, “Humans Vs. Zombies” and “Patient Zero” which are deemed lucrative and beneficial to Hannover House. Under the proposed output arrangement, Hannover House would not be responsible to provide any production financing. Based upon the concepts presented by Jaynes, the managers approved the venture for an output agreement covering a minimum of six new films. Along the same lines, the managers looked at a similar proposal from Allegheny Image Factory, covering four new productions to be delivered within the next two years. This multipicture output venture was also approved by the managers. In order to respect the profile of each title covered under these two output agreements, the managers agreed to announce the individual titles under separate, press released announcements.
Discussion Item c). CREATION OF V.P. SALES & MARKETING POSITION – A discussion was held regarding the increasing sophistication of the Company’s marketing and sales activities, as well as the Company’s enhanced output of releases. In order to better manage the release slate and various promotional requirements for the Company’s activities, the Managers agreed to create a new position for “Vice-President of Sales and Marketing.” No specific candidates were identified for this position, although the Managers acknowledged that this new post will likely necessitate the opening of a Los Angeles-based office.
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