Filing: Initial Tranche Allocations
ITEM 1 - MINUTES OF THE BOARD OF DIRECTORS MEETING OF JUNE 3, 2013
A regularly scheduled and properly noticed meeting of the Company's Board of Directors was held at 10:00 am on Monday, June 3, 2013 at the Company's principal headquarters in Springdale, Arkansas. The following minutes cover agenda items discussed, and where noted, acted upon by the Board of Directors.
1). APPROVAL OF ALLOCATION OF TCA PROCEEDS -
With respect to the requirement that the Use of Proceeds from the TCA Global Credit Fund be utilized for the creation of new releases and new receivables, Shefte presented an budget outline of activities for Board discussion and review. The following items indicate the allocations and expenditures that were approved by the Board under the TCA terms, and to be subject to requisite third party approvals, if any:
a). "Direct-to-Video" Title Acquisitions -
The Board approved a total of five-hundred-thousand dollars (USD $500,000) for the acquisition, release and manufacturing / fulfillment of twenty (20) titles primarily categorized as "Direct-to-Video" (and VOD) releases; included in this allocation are eight new titles now under contract, and twelve titles still in final negotiation;
b). New Book / E-Book Releases -
The Board approved a total of one-hundred-fifty-thousand dollars (USD $150,000) to cover acquisition, marketing and initial printing costs for seven (7) new release books (and E-Book editions), including three previously announced titles, and four new titles still pending formal announcement;
c). Los Angeles Office -
The Board approved the opening of an "Acquisitions" office in Los Angeles, to better improve the Company's presence and opportunities with respect to higher profile releases and distribution opportunities. The Los Angeles office and one-person staff are budgeted at approximately $80,000 per year.
d). New Division Acquisitions -
The Board agreed to pursue two pending corporate acquisitions, specifically an independent film company and video label (with more than 500 titles), and an international sales agency (with more than 200 titles). Subject to the due diligence review of each of these companies and the terms of corporate acquisition, the Board approved an expenditure of up to three-million dollars (USD $3,000,000), provided, however, that the financial structure protected the investment and indicated not less than a 100% ROI within 24-months. The Board authorized CEO Eric Parkinson to travel to Los Angeles and meet with the parties to negotiate these transactions.
e). New Staff Hires -
In order to facilitate the marketing / packaging / promotion and release of the Company's new title acquisitions, the Board approved the hiring of these additional positions:
* Director of Sales (total estimated annual salary and travel costs: approx. $80,000);
* Technical Services Manager (annual cost: approx. $45,000);
* Staff Accountant / Bookkeeper (annual cost: approx. $45,000);
* Los Angeles Office Acquisitions Manager (annual cost: approx. $60,000);
2). APPROVAL OF PRODUCTION FUNDING -
The Board reviewed a private investment proposal regarding the Allegheny Image Factory production of "The Mothman Chronicles" (aka "Night Skies"). Based on the benefits to Hannover House (both in terms of production and distribution fees as well as copyright / program ownership), as well as the star casting in the film, the Board approved the structure.
3). APPROVAL OF SETTLEMENT TERMS IN NB-CAL MEDIATION -
The Board reviewed the terms of the proposed settlement set forth by counsel following various discussions with representatives for the National Bank of California. Opposing counsel has expressed a desire to settle, following review of to the Company's affirmative defense filings and motion for Mediation in the matter of the Prints & Ads loan for the film "All's Faire In Love." The principal terms of the settlement proposal call for the Bank's recognition and acceptance of the existing Subscription Video-on-Demand revenues, ongoing DVD sales and Television Contracts as the source of repayment; that the lawsuit will be withdrawn, and attorneys fees will be waived. Based on counsel's recommendation, the Board approved these terms and authorized formal execution of same at the scheduled Mediation.
Management Discussion and Analysis - Board of Directors Meeting / Approval of Funds Disbursements & Other Actions - June 4, 2013:
https://www.otciq.com/otciq/ajax/showFinancia...?id=105934
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