FILING : Settlements(ings), VODwiz Hires/New Structures, DD
May 4, 2017
Management Discussion and Analysis - Actions of Board Of Directors - May 1, 2017
ITEM 1) – A meeting of the Board of Directors of Hannover House, Inc. was held on Monday, May 1, 2017 at 10:00 am, at the Company’s principal office headquarters in Fayetteville, Arkansas. Due to a delay in activation of the Directors and Officer’s Liability Insurance for all Company board members, nominated board members Tom Sims and Eric Doctorow were excused from attendance. The following items are summarized and represent those issues requiring disclosure of any action or approvals of the Board of Directors.
1) FINAL COURT RESOLUTION AND SETTLEMENT OF TCA MATTER –
In respect of the company’s merger activities with Crimson Forest Entertainment Group, Inc., and in the interests of resolving all significant legal matters as expeditiously as possible, Company Managers, working in tandem with the legal counsel team of Shook, Hardy and Bacon, have reached a full and complete settlement and resolution agreement with TCA Global Master Fund. Effective immediately, the Florida case will be updated and indicated to the court as having been settled. Per mutual agreement, TCA and HHSE have agreed to keep the terms of settlement confidential. The Board reviewed the settlement terms, found the impact to be non-material, and authorized this final and complete settlement.
2) BOARD PRE-APPROVAL OF SETTLEMENT PROPOSAL TO JSJ INVESTMENTS –
In 2014, Company entered into three separate notes with JSJ investments, totaling $78,000, as follows: August 1, 2014: $25,000; August 26, 2014: $30,000; and November 14, 2014: $23,000. The terms of the three notes called for maturation in twelve (12) months and interest to accrue at twelve (12) percent annually. Upon maturation of the initial two notes in August of 2015, Company contacted and offered to JSJ to pay this principal amount and interest in full and in cash at that time. JSJ refused to provide banking details for remittance of the note, and insisted on exercise of the “conversion clause” which would have given them HHSE stock shares at a fifty (50) percent discount to market price… or repayment of the notes at 100% premium (which Company described to JSJ as being in violation of Usury Laws). When HHSE demanded to pay the notes in cash per the written terms, JSJ responded by filing a lawsuit in the State of Texas, and ultimately prevailing to judgment. In the post-judgment prove-up stage, JSJ put forth a claim of “lost profits” and somehow persuaded the court to approve a judgment balance of more than three times the actual amount. It is Company and counsel’s opinion that this inflated judgment balance is a clear violation of Texas Usury laws and predatory-lender restrictions. JSJ has since registered this Texas judgment in the State of Arkansas and made initial efforts to enforce collections. In respect of the merger activities with Crimson Forest, the Board voted to unanimously approve settlement terms with JSJ that will pay them the principal, interest, legal fees and collection fees in cash, but not in stock and not at a “super-premium.” The Board also voted to engage litigation counsel to seek injunctive relief against further JSJ enforcement activities and to re-open the case in the State of Arkansas, including an interplead of the proper and legal amount of funds due to JSJ under Texas and Arkansas lender laws. The Board will seek to settle with JSJ on or before May 10, after which time, the avenue of legal filings and proceedings will commence.
3) BOARD APPROVAL OF SETTLEMENT DISCUSSIONS WITH “UNION BOUND” –
In a distribution agreement made late in 2015, Uptone Pictures was to provide Company with seven-hundred-thousand dollars (USD $700,000) to cover marketing, advertising, releasing and distribution costs for approximately 150 theatres for the movie “UNION BOUND.” Company received payments totaling approximately $54,000 from Uptone – yet had already scheduled about 100 locations with key theatre exhibition chains. In reliance on Uptone’s written promises to provide the balance of funding directly to Company or through direct payments to vendors, Company continued with the release activities and on April 22, 2016, HHSE opened the film on about 100 theatres across most major USA markets. Communications to and from Uptone Pictures indicated a mutual agreement that Company would be entitled to recover any and all costs incurred by Company in the release of the film, in respect of Uptone’s failure to fully and timely fund the contractually-agreed to Prints & Ads costs of $700,000. To date, Company has spent invested approximately two-hundred-fifty-thousand dollars (USD $250,000) in the release of “UNION BOUND,” and in reliance on these written communications -which Company views as addendums to the prior licensing agreement - Company has been recouping its investment from incoming distribution revenues. The Board of Directors authorized the engagement of the Los Angeles law firm of Hinds & Shankman to file a response in the case, and to initiate settlement discussions. Opposing counsel for Uptone has since agreed to a ninety (90) day extension for the filing of a response by Company, during which time, both parties will review the budgets, payments, communications and collections and seek to reach a settlement based on the releasing costs math of the venture.
4) BOARD APPROVAL OF “VODWIZ” HIRES AND NEW STRUCTURES –
In respect of the merger activities with Crimson Forest, the Board reviewed a business plan to align the OTT / APP and URL Sites with Amazon Digital Services as the operational infrastructure for the streaming venture. The Board also approved moving the employment status of Tom Sims to become President of VODWIZ, INC., effective May 15, 2017, and the engagement of Earl Hale as VP / GM of VODWIZ, to oversee all technical and operational matters. Tom Sims has been working for three years as VP of Sales for Hannover House, Inc., and will continue his board position with the Company. Most of the duties as VP of Sales for Hannover House, Inc. have been rendered moot under a new distribution pact with a major studio, which has not yet been announced beyond the general statement of “major studio distribution pact” (in respect of this new distribution partner’s requirement that such relationship developments be announced through their own publicity divisions and PR firms). Earl Hale has thirty-years of experience in media technical services and production; he was former director of Walmart TV (an in-house operation to produce promotional, informative and shareholder videos for Walmart); and former director of the Global Campus Media Studios, an impressive multi-media television and film operation owned by the University of Arkansas. Hale is expected to start work for VODWIZ on Wednesday,May 10.
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There being no other business to conduct, discuss or approve by the Board, the meeting was adjourned at 11:20 am.
May 4, 2017
Management Discussion and Analysis - Actions of Board Of Directors - May 1, 2017
ITEM 1) – A meeting of the Board of Directors of Hannover House, Inc. was held on Monday, May 1, 2017 at 10:00 am, at the Company’s principal office headquarters in Fayetteville, Arkansas. Due to a delay in activation of the Directors and Officer’s Liability Insurance for all Company board members, nominated board members Tom Sims and Eric Doctorow were excused from attendance. The following items are summarized and represent those issues requiring disclosure of any action or approvals of the Board of Directors.
1) FINAL COURT RESOLUTION AND SETTLEMENT OF TCA MATTER –
In respect of the company’s merger activities with Crimson Forest Entertainment Group, Inc., and in the interests of resolving all significant legal matters as expeditiously as possible, Company Managers, working in tandem with the legal counsel team of Shook, Hardy and Bacon, have reached a full and complete settlement and resolution agreement with TCA Global Master Fund. Effective immediately, the Florida case will be updated and indicated to the court as having been settled. Per mutual agreement, TCA and HHSE have agreed to keep the terms of settlement confidential. The Board reviewed the settlement terms, found the impact to be non-material, and authorized this final and complete settlement.
2) BOARD PRE-APPROVAL OF SETTLEMENT PROPOSAL TO JSJ INVESTMENTS –
In 2014, Company entered into three separate notes with JSJ investments, totaling $78,000, as follows: August 1, 2014: $25,000; August 26, 2014: $30,000; and November 14, 2014: $23,000. The terms of the three notes called for maturation in twelve (12) months and interest to accrue at twelve (12) percent annually. Upon maturation of the initial two notes in August of 2015, Company contacted and offered to JSJ to pay this principal amount and interest in full and in cash at that time. JSJ refused to provide banking details for remittance of the note, and insisted on exercise of the “conversion clause” which would have given them HHSE stock shares at a fifty (50) percent discount to market price… or repayment of the notes at 100% premium (which Company described to JSJ as being in violation of Usury Laws). When HHSE demanded to pay the notes in cash per the written terms, JSJ responded by filing a lawsuit in the State of Texas, and ultimately prevailing to judgment. In the post-judgment prove-up stage, JSJ put forth a claim of “lost profits” and somehow persuaded the court to approve a judgment balance of more than three times the actual amount. It is Company and counsel’s opinion that this inflated judgment balance is a clear violation of Texas Usury laws and predatory-lender restrictions. JSJ has since registered this Texas judgment in the State of Arkansas and made initial efforts to enforce collections. In respect of the merger activities with Crimson Forest, the Board voted to unanimously approve settlement terms with JSJ that will pay them the principal, interest, legal fees and collection fees in cash, but not in stock and not at a “super-premium.” The Board also voted to engage litigation counsel to seek injunctive relief against further JSJ enforcement activities and to re-open the case in the State of Arkansas, including an interplead of the proper and legal amount of funds due to JSJ under Texas and Arkansas lender laws. The Board will seek to settle with JSJ on or before May 10, after which time, the avenue of legal filings and proceedings will commence.
3) BOARD APPROVAL OF SETTLEMENT DISCUSSIONS WITH “UNION BOUND” –
In a distribution agreement made late in 2015, Uptone Pictures was to provide Company with seven-hundred-thousand dollars (USD $700,000) to cover marketing, advertising, releasing and distribution costs for approximately 150 theatres for the movie “UNION BOUND.” Company received payments totaling approximately $54,000 from Uptone – yet had already scheduled about 100 locations with key theatre exhibition chains. In reliance on Uptone’s written promises to provide the balance of funding directly to Company or through direct payments to vendors, Company continued with the release activities and on April 22, 2016, HHSE opened the film on about 100 theatres across most major USA markets. Communications to and from Uptone Pictures indicated a mutual agreement that Company would be entitled to recover any and all costs incurred by Company in the release of the film, in respect of Uptone’s failure to fully and timely fund the contractually-agreed to Prints & Ads costs of $700,000. To date, Company has spent invested approximately two-hundred-fifty-thousand dollars (USD $250,000) in the release of “UNION BOUND,” and in reliance on these written communications -which Company views as addendums to the prior licensing agreement - Company has been recouping its investment from incoming distribution revenues. The Board of Directors authorized the engagement of the Los Angeles law firm of Hinds & Shankman to file a response in the case, and to initiate settlement discussions. Opposing counsel for Uptone has since agreed to a ninety (90) day extension for the filing of a response by Company, during which time, both parties will review the budgets, payments, communications and collections and seek to reach a settlement based on the releasing costs math of the venture.
4) BOARD APPROVAL OF “VODWIZ” HIRES AND NEW STRUCTURES –
In respect of the merger activities with Crimson Forest, the Board reviewed a business plan to align the OTT / APP and URL Sites with Amazon Digital Services as the operational infrastructure for the streaming venture. The Board also approved moving the employment status of Tom Sims to become President of VODWIZ, INC., effective May 15, 2017, and the engagement of Earl Hale as VP / GM of VODWIZ, to oversee all technical and operational matters. Tom Sims has been working for three years as VP of Sales for Hannover House, Inc., and will continue his board position with the Company. Most of the duties as VP of Sales for Hannover House, Inc. have been rendered moot under a new distribution pact with a major studio, which has not yet been announced beyond the general statement of “major studio distribution pact” (in respect of this new distribution partner’s requirement that such relationship developments be announced through their own publicity divisions and PR firms). Earl Hale has thirty-years of experience in media technical services and production; he was former director of Walmart TV (an in-house operation to produce promotional, informative and shareholder videos for Walmart); and former director of the Global Campus Media Studios, an impressive multi-media television and film operation owned by the University of Arkansas. Hale is expected to start work for VODWIZ on Wednesday,May 10.
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There being no other business to conduct, discuss or approve by the Board, the meeting was adjourned at 11:20 am.
