HHSE Describes Current, Recent and Other Events Required for New OTC Markets Disclosure
In compliance with new formatting and disclosure rules implemented by the OTC Markets as of March 1, 2021. Hannover House, Inc. (OTC: HHSE) hereby releases to the OTC Markets those items of a mandatory disclosure or material nature as described in section 2 and section 9 of the revised and updated reporting format instructions. Each of these items described below has been previously disclosed through either OTC Markets filings in a different format, through newswire releases, through the companys shareholder blog and / or through Form 8 Information Statements filed with the Securities and Exchange Commission.
A). Change in Officer / Director On March 15, 2021, Don Frederick Shefte resigned his position as President of Hannover House, Inc., as well as notified the board of directors of his planned withdrawal from the board to occur on or about April 15, 2021. Until a replacement President is hired, Hannover House C.E.O. Eric Parkinson will handle any additional duties to properly address this personnel change.
. Bankruptcy Filing of Former Officer On or about February 8, 2021, Don Frederick Shefte filed for personal bankruptcy in Arkansas. Included within the assets of his estate were the 6,743,773 Common Stock, Restricted Shares owned by Shefte, as well as a listing of his 1,800,000 "preferred" voting shares (which under corporate bylaws are forfeited back to company treasury upon an officers departure from the company). Due to the S.E.C. Rule 144 sale restrictions imposed upon officer or affiliate owned shares, the trustee has indicated that they are unlikely to attempt to circumvent the precedent of securities laws in order to sell Sheftes shares.
C). 20th Century Fox Agreement Termination of an Agreement - on or about February 1, 2021, Hannover House informed 20th Century Fox that the sub-distribution agreement entered into as of August, 2010 for the home video and digital distribution of the movie "TWELVE," would not be renewed. The timing of this notification of termination to Fox takes into account the 6-month sell-off period allowed within the contract for disposition of inventory at the end of the ten (10) year term. HHSE plans to remarket the film to home video, streaming and television media in North America.
D). Entertainment Studios / FreeStyle Releasing Termination of an Agreement on or about February 1, 2021, Hannover House informed Entertainment Studios (formerly known as FreeStyle Releasing and Turtles Crossing), that the streaming and television licenses covering the titles "All's Faire In Love" and "Toys in the Attic" would not be renewed. HHSE plans to remarket the films to home video, streaming and television media in North America.
E). Production Loans Acquisition Agreement During calendar years 2019 and 2020, Hannover House, Inc. provided short-term loans to assist with the production of the movie, WILDFIRE as a key term to the distribution agreement with Snowy Morning, Inc. in which HHSE shall be granted a first right to match the distribution terms provided to Snowy Morning from the major studio partners working with Snowy Morning on this film. In the event that Snowy Morning, Inc. proceeds with a major studio distributor instead of HHSE, then HHSE shall be entitled to an ongoing override fee of ten percent (10%) as a passive royalty, as well as repayment of all loans, including interest accrued at seven (7) percent annually. As of Dec. 31, 2020, the balance of short-term loans provided by HHSE to assist with the WILDFIRE production was $53,742.
F). Delinquency on Corporate Office Rent During 2020, with the general industry shut-down due to Covid, Hannover House (and co-renter Vodwiz, Inc.) fell behind in the timeliness of rent payments due to the Stafford Building, located at 355 N. College in Fayetteville, AR. Although rent is now being paid on a current basis, there is an accrued debt from 2020 of $18,600, which HHSE and Stafford have agreed to retire though additional monthly payments of not less than $1,000 more than current rent.
G). Planned S1 Securities Offering The Company is finalizing the documentation of a S1 Registration Offering, which will make up to one-hundred-million (100,000,000) common stock shares of HHSE available on a direct (subscription agreement) placement to qualified investors and shareholders. These shares are not expected to be offered within the next few weeks, based upon timing and S.E.C. disclosure issues impacting the supporting documentation for the offering statement. Seventy-percent (70%) of the proceeds from this S1 offering will be utilized for the development, launch, promotion and operations of the new MyFlix streaming service. The remaining thirty percent (30%) has been approved for allocation to management of existing payables and other debt or litigation matters of HHSE.
Hannover House, Inc. was launched in Sept. 1993 as Truman Press, Inc., a California-domiciled company involved in the publishing and distribution of hard cover books. In January 2002, Eric F. Parkinson purchased the company and added VHS and DVDs to the product offerings. Within three years, Hannover House had grown into a top-ten supplier of budget DVDs to Walmart Stores, Inc., with upwards of seven-of-ten top selling items represented by Hannover House in May of 2006. In April of 2007, Don Frederick Shefte left his position as VP & Trust Officer of the Bank of Fayetteville, to join Hannover House as President. In 2008, the company attempted a merger with Empire Film Group, Inc., which was eventually withdrawn in 2009 due to financing challenges for Empire impacting its ability to fulfill their merger commitments. In Dec. 2009, the company was presented with an opportunity to proceed with a "reverse-merger" with a Wyoming company called Target Development Group, Inc., under the control of stock promoter Fotis Georgiadis. The terms of the agreement involved a settlement of unsupported debts purportedly owed to Georgiadis, in exchanged for 200-million unrestricted stock shares. The benefit to Hannover House was the obligation of Georgiadis to fund $1.5-mm in operating capital to the company, which was only partially funded ($500,000), later defaulted and ultimately the subject of litigation. In April of 2011, the Financial Industry Regulatory Authority (FINRA) reviewed the complete history of Hannover House and all predecessor entities and determined that the company was never, at any time, a "shell" under the prevailing standards of applicable definition. Furthermore, at that time, FINRA approved the formal change of the company name and trading ticker symbol from Target Development Group, Inc. (TDGI) to Hannover House, Inc., (HHSE). The company has been operating on the OTC Pinksheets Markets for the past ten years as an unregistered, but voluntarily reporting equity issuer with the Securities and Exchange Commission.