BLOG: HHSE / MYFLIX / GENERAL UPDATES
http://hannoverhousemovies.blogspot.com/
Greetings HHSE Friends, Followers, Longs and Strongs - As promised last Tuesday, additional details on multiple corporate issues is overdue for our anxious - yet patient - shareholders.
The first part of this blog will be the SUMMARY POINTS... and for those wanting additional details, these will be provided much further below (to the extent that such details can be disclosed without impeding our current activities).
The BIG NEWS is that we have completed the Form 10 write-ups, including the obligation to address all legal disputes (and to provide a management's analysis of the merits - or lack thereof - for each legal matter). Over the next two weeks, as our attorneys file these responses, we will be able to eliminate this issue as an impediment to the corporate filing. Details on these legal issues are disclosed at the bottom of this blog update.
The NEXT "sort of big news" is that our June 30, 2019 OTC Market Report will be filed this week. Shareholders will undoubtedly notice that the financial tables / reports in this quarterly filing are formatted rather differently than from the financial tables and filings of the past, which will be self-explanatory and an obvious GAAP requirement for the auditors going forward.
The NEXT "long expected news" is that HHSE President D. Frederick Shefte has made a retirement decision and will be leaving the company in the not-too-distant future. As our shareholders know, Fred has been battling a series of health challenges since the summer and fall of 2018 (when he was hospitalized for a total of almost three months). His health has been somewhat touch-and-go since December, and he has been re-hospitalized several times since. Fred has been immensely helpful these past 12 years at Hannover House - and has agreed to help with the finalization of the Form 10 Registration and the ongoing launch of MyFlix before officially exiting from HHSE. Most likely, Fred will be replaced by a CFO with public-company experience... as the post-registration reporting requirements are more complex and time-sensitive than the current OTC Markets rules.
During this current transitional time - where HHSE is shedding the old business model and resolving issues deriving from that old model...while simultaneously launching a two-tiered new approach - the company has not had any significant operating cash flows. Accordingly, over the past three months, HHSE C.E.O. Eric Parkinson has been providing loans to the company to cover rent, overhead, legal fees and accounting costs (which will be described in further detail in the June 30 OTC filing as well as the Form 10 Registration Disclosures). Parkinson anticipates continued funding from his current and future loans through the registration process and until HHSE begins generating cash flows from the new productions and MyFlix.
* * * * *
Stuff we WISH we could be talking about? The epic action thriller MELTDOWN has three major star attachments and a $12.5-mm production budget. Agreements for a total of $7.75-million in NON-DISTRIBUTION REVENUES have been structured... which HHSE plans to supplement with two or more European territory presales and a major studio distribution pact for North America. But the confidentiality / NDAs on these agreements limit our ability to elaborate at this time. We are pursuing a similar financing structure for THE LEGEND OF BELLE STARR. However, our family-adventure of MOTHER GOOSE does not fit into the specific and prescribed structure for this new financing mechanism. We will need to find a different methodology for financing MOTHER GOOSE. In any event, as each of these major productions contains significant operating overhead (for HHSE) and marketing funding for the films' promotion and release (either in full or in part), these EVENT-LEVEL productions offer the company a tremendous upside and virtually no downside risk (again, a reversal of the "old" business model wherein HHSE assumed both revenue guarantees and marketing costs for third-party films, often being "lower-tier" productions).
The MyFlix on-boarding process has been slower than hoped - and we completely understand why DISNEY and other upcoming sites are having the same slower-than-hoped-for launch cycles. But again, we agree with the industry prognosticators who say that MyFlix could be the tail-that-wagged-the-dog in terms of mega revenues and upside for HHSE. That's why we keep plugging away at the build-up, on-boarding and marketing organization for this streaming venture.
* * * * *
Here are some quick UPDATES on a couple of "titles previously disclosed."
A PILGRIM'S PROGRESS - the animated feature for which HHSE made a USA home video deal for at the Berlin Market - ultimately fell apart. The producers of the film were concerned about the returns risk that Walmart, Best Buy and Target posed... and wanted assurances that there would be limited returns. This was not a representation that could be reasonably made, so we agreed to part ways... and the film is now being sold via websites and Christian outlets from Vision Video.
HEAVENQUEST - is a live-action version of the same story, "A Pilgrim's Promise." There was substantial interest for 9+ months from a financing company to provide HHSE with significant theatrical P&A funding for the film (and a home video deal with a major studio). However, there was a requirement for an "A" list celebrity narrator to be added to the film... and we were ultimately unable to recruit an actor (or actress) suitable to this financing group. So, regrettably, we were forced to abandon that opportunity.
HEXED is a horror film acquired at Cannes in 2018... we have not yet proceeded with the release due to the uncertainties caused by changes in the DVD / BluRay marketplace for lower-tier titles. We are currently investigating a different releasing and pricing strategy that has been working for other indie distributors (higher suggested retail pricing, but targeted distribution which avoids the low-priced / high-returns retailers). If this strategy seems transferable to HEXED and other unreleased titles from Hannover House, we may pursue it for: RIDE UNITED, AMERICA UNITED and the BLOODFEAST: UNCUT releases.
EASY LOVE is still scheduled for an Academy Qualifying theatrical release this year.
* * * * *
The following RANDOM IMAGE is being provided so that this BLOG reads more easily when formatted for mobile devices. WATCH FOR THE Q2 FILING AND MORE....
MORE DETAIL ON THE LEGAL UPDATES
* After several weeks of delays, the MOTION TO DISMISS the JSJ Judgment (and provide the court with proof-of-full consideration) is being filed THIS WEEK in the original Texas court. This action by HHSE will have the automatic effect of causing the baseless JSJ collection attempts being pursued in Arkansas to be immediately halted and discharged.
* A separate filing within Arkansas to freeze the fraudulent California judgment by Uptone Pictures will be filed (not this week... but likely NEXT week). Similar to the TCA filing that HHSE prevailed with, the Uptone case had zero legal merit and was purposely allowed to go to default in California in order that the matter be adjudicated in Arkansas (where a Plaintiff must actually prove claims based on facts, laws and math). So, our counsel is confident that this matter will also be quickly discharged.
* The same attorney for UPTONE in California was responsible for recruiting DAISY WINTERS to make an equally dubious claim against HHSE (dubious because there had been a fully agreed dissolution agreement six-months prior to the filing of the California case). Again, HHSE was advised that the California judgment (if as a "default"
would be stopped in Arkansas and allowed to be adjudicated here. So, again, unless that matter is withdrawn prior to coming to Arkansas, that will be the legal methodology in the next few months (which will include the further unintended consequence of bringing DAISY WINTERS distribution rights back into Hannover House).
* The most egregious judgment of all is the matter of "Dancin' It's On" investor Lewin vs. Hannover House. There was no agreement to repay his investments in the film (Lewin made that false claim to the NY court under penalty of perjury), and there was no "personal guarantee" made by the HHSE officers (we are unable to issue personal guarantees as this could be perceived as a conflict of interest to our public shareholders). Again, the claim of officer personal guarantees was another a false statement made to the NY courts under penalty of perjury. We are advised that the case has been filed in Arkansas, but no notice has ever been given (which is the legal requirement to start the clock on taking steps to freeze, re-open and adjudicate foreign defaults). Because of the Form 10 filing and the company's need to disclose all real or potential legal matters, HHSE will proceed and file within Arkansas to halt any attempted collections (despite not yet receiving notice of action within Arkansas).
* The Pennsylvania judge in the Getting Grace matter has required that HHSE provide an offer of settlement (which was tendered last Friday). It is our position that the breaches by Getting Grace - most notably, their actions in hiring a different distributor without notice to HHSE, which impeded our ability to consummate sales of the film - results in a nullifying of the sales-performance based payment obligations. As such, we feel that HHSE that has been severely damaged and should be entitled to consideration. Regardless, the offer of a settlement was required. So, if Getting Grace does not accept the mandatory settlement offer, then the case will continue to move forward at glacial speed... with the first hearing on the removal of improperly named parties occurring in about 30-days, to be followed by the HHSE's actions to change venue, and if required, the filing of our meritorious defensive answers and cross complaints. Fundamentally, this case was disappointing on three levels, but was an important catalyst for management's final decision to get out of the lower-tier releasing business.
* Origin Releasing (Texas) tried to send out a handful of garnishment letters to perceived HHSE customers, for which they achieved no success. We have been waiting for them to file the case in Arkansas so that we can present the post-judgment evidence which invalidates their case. Specifically, HHSE is prepared to submit to the court the executed agreement without the hand-written notes added by Origin and presented into evidence by Origin as being the only and actual distribution agreement. The settlement entered into by HHSE with Origin in the Texas matter was under duress and was based on our prior inability to locate the original, fully executed agreement (without the hand-written changes made solely by Origin after the fact). This clean document was found later - during the extensive HHSE Form 10 document production and deep storage search - and it should prove to be compelling evidence to set-aside the Texas judgment.
* Bedrock Ventures - legal actions in motion by HHSE preclude a discussion at this time (but will be disclosed with the Form 10 filing).
http://hannoverhousemovies.blogspot.com/
Greetings HHSE Friends, Followers, Longs and Strongs - As promised last Tuesday, additional details on multiple corporate issues is overdue for our anxious - yet patient - shareholders.
The first part of this blog will be the SUMMARY POINTS... and for those wanting additional details, these will be provided much further below (to the extent that such details can be disclosed without impeding our current activities).
The BIG NEWS is that we have completed the Form 10 write-ups, including the obligation to address all legal disputes (and to provide a management's analysis of the merits - or lack thereof - for each legal matter). Over the next two weeks, as our attorneys file these responses, we will be able to eliminate this issue as an impediment to the corporate filing. Details on these legal issues are disclosed at the bottom of this blog update.
The NEXT "sort of big news" is that our June 30, 2019 OTC Market Report will be filed this week. Shareholders will undoubtedly notice that the financial tables / reports in this quarterly filing are formatted rather differently than from the financial tables and filings of the past, which will be self-explanatory and an obvious GAAP requirement for the auditors going forward.
The NEXT "long expected news" is that HHSE President D. Frederick Shefte has made a retirement decision and will be leaving the company in the not-too-distant future. As our shareholders know, Fred has been battling a series of health challenges since the summer and fall of 2018 (when he was hospitalized for a total of almost three months). His health has been somewhat touch-and-go since December, and he has been re-hospitalized several times since. Fred has been immensely helpful these past 12 years at Hannover House - and has agreed to help with the finalization of the Form 10 Registration and the ongoing launch of MyFlix before officially exiting from HHSE. Most likely, Fred will be replaced by a CFO with public-company experience... as the post-registration reporting requirements are more complex and time-sensitive than the current OTC Markets rules.
During this current transitional time - where HHSE is shedding the old business model and resolving issues deriving from that old model...while simultaneously launching a two-tiered new approach - the company has not had any significant operating cash flows. Accordingly, over the past three months, HHSE C.E.O. Eric Parkinson has been providing loans to the company to cover rent, overhead, legal fees and accounting costs (which will be described in further detail in the June 30 OTC filing as well as the Form 10 Registration Disclosures). Parkinson anticipates continued funding from his current and future loans through the registration process and until HHSE begins generating cash flows from the new productions and MyFlix.
* * * * *
Stuff we WISH we could be talking about? The epic action thriller MELTDOWN has three major star attachments and a $12.5-mm production budget. Agreements for a total of $7.75-million in NON-DISTRIBUTION REVENUES have been structured... which HHSE plans to supplement with two or more European territory presales and a major studio distribution pact for North America. But the confidentiality / NDAs on these agreements limit our ability to elaborate at this time. We are pursuing a similar financing structure for THE LEGEND OF BELLE STARR. However, our family-adventure of MOTHER GOOSE does not fit into the specific and prescribed structure for this new financing mechanism. We will need to find a different methodology for financing MOTHER GOOSE. In any event, as each of these major productions contains significant operating overhead (for HHSE) and marketing funding for the films' promotion and release (either in full or in part), these EVENT-LEVEL productions offer the company a tremendous upside and virtually no downside risk (again, a reversal of the "old" business model wherein HHSE assumed both revenue guarantees and marketing costs for third-party films, often being "lower-tier" productions).
The MyFlix on-boarding process has been slower than hoped - and we completely understand why DISNEY and other upcoming sites are having the same slower-than-hoped-for launch cycles. But again, we agree with the industry prognosticators who say that MyFlix could be the tail-that-wagged-the-dog in terms of mega revenues and upside for HHSE. That's why we keep plugging away at the build-up, on-boarding and marketing organization for this streaming venture.
* * * * *
Here are some quick UPDATES on a couple of "titles previously disclosed."
A PILGRIM'S PROGRESS - the animated feature for which HHSE made a USA home video deal for at the Berlin Market - ultimately fell apart. The producers of the film were concerned about the returns risk that Walmart, Best Buy and Target posed... and wanted assurances that there would be limited returns. This was not a representation that could be reasonably made, so we agreed to part ways... and the film is now being sold via websites and Christian outlets from Vision Video.
HEAVENQUEST - is a live-action version of the same story, "A Pilgrim's Promise." There was substantial interest for 9+ months from a financing company to provide HHSE with significant theatrical P&A funding for the film (and a home video deal with a major studio). However, there was a requirement for an "A" list celebrity narrator to be added to the film... and we were ultimately unable to recruit an actor (or actress) suitable to this financing group. So, regrettably, we were forced to abandon that opportunity.
HEXED is a horror film acquired at Cannes in 2018... we have not yet proceeded with the release due to the uncertainties caused by changes in the DVD / BluRay marketplace for lower-tier titles. We are currently investigating a different releasing and pricing strategy that has been working for other indie distributors (higher suggested retail pricing, but targeted distribution which avoids the low-priced / high-returns retailers). If this strategy seems transferable to HEXED and other unreleased titles from Hannover House, we may pursue it for: RIDE UNITED, AMERICA UNITED and the BLOODFEAST: UNCUT releases.
EASY LOVE is still scheduled for an Academy Qualifying theatrical release this year.
* * * * *
The following RANDOM IMAGE is being provided so that this BLOG reads more easily when formatted for mobile devices. WATCH FOR THE Q2 FILING AND MORE....
MORE DETAIL ON THE LEGAL UPDATES
* After several weeks of delays, the MOTION TO DISMISS the JSJ Judgment (and provide the court with proof-of-full consideration) is being filed THIS WEEK in the original Texas court. This action by HHSE will have the automatic effect of causing the baseless JSJ collection attempts being pursued in Arkansas to be immediately halted and discharged.
* A separate filing within Arkansas to freeze the fraudulent California judgment by Uptone Pictures will be filed (not this week... but likely NEXT week). Similar to the TCA filing that HHSE prevailed with, the Uptone case had zero legal merit and was purposely allowed to go to default in California in order that the matter be adjudicated in Arkansas (where a Plaintiff must actually prove claims based on facts, laws and math). So, our counsel is confident that this matter will also be quickly discharged.
* The same attorney for UPTONE in California was responsible for recruiting DAISY WINTERS to make an equally dubious claim against HHSE (dubious because there had been a fully agreed dissolution agreement six-months prior to the filing of the California case). Again, HHSE was advised that the California judgment (if as a "default"
would be stopped in Arkansas and allowed to be adjudicated here. So, again, unless that matter is withdrawn prior to coming to Arkansas, that will be the legal methodology in the next few months (which will include the further unintended consequence of bringing DAISY WINTERS distribution rights back into Hannover House). * The most egregious judgment of all is the matter of "Dancin' It's On" investor Lewin vs. Hannover House. There was no agreement to repay his investments in the film (Lewin made that false claim to the NY court under penalty of perjury), and there was no "personal guarantee" made by the HHSE officers (we are unable to issue personal guarantees as this could be perceived as a conflict of interest to our public shareholders). Again, the claim of officer personal guarantees was another a false statement made to the NY courts under penalty of perjury. We are advised that the case has been filed in Arkansas, but no notice has ever been given (which is the legal requirement to start the clock on taking steps to freeze, re-open and adjudicate foreign defaults). Because of the Form 10 filing and the company's need to disclose all real or potential legal matters, HHSE will proceed and file within Arkansas to halt any attempted collections (despite not yet receiving notice of action within Arkansas).
* The Pennsylvania judge in the Getting Grace matter has required that HHSE provide an offer of settlement (which was tendered last Friday). It is our position that the breaches by Getting Grace - most notably, their actions in hiring a different distributor without notice to HHSE, which impeded our ability to consummate sales of the film - results in a nullifying of the sales-performance based payment obligations. As such, we feel that HHSE that has been severely damaged and should be entitled to consideration. Regardless, the offer of a settlement was required. So, if Getting Grace does not accept the mandatory settlement offer, then the case will continue to move forward at glacial speed... with the first hearing on the removal of improperly named parties occurring in about 30-days, to be followed by the HHSE's actions to change venue, and if required, the filing of our meritorious defensive answers and cross complaints. Fundamentally, this case was disappointing on three levels, but was an important catalyst for management's final decision to get out of the lower-tier releasing business.
* Origin Releasing (Texas) tried to send out a handful of garnishment letters to perceived HHSE customers, for which they achieved no success. We have been waiting for them to file the case in Arkansas so that we can present the post-judgment evidence which invalidates their case. Specifically, HHSE is prepared to submit to the court the executed agreement without the hand-written notes added by Origin and presented into evidence by Origin as being the only and actual distribution agreement. The settlement entered into by HHSE with Origin in the Texas matter was under duress and was based on our prior inability to locate the original, fully executed agreement (without the hand-written changes made solely by Origin after the fact). This clean document was found later - during the extensive HHSE Form 10 document production and deep storage search - and it should prove to be compelling evidence to set-aside the Texas judgment.
* Bedrock Ventures - legal actions in motion by HHSE preclude a discussion at this time (but will be disclosed with the Form 10 filing).
