Welcome to the Hannover House Investor Relations Blog

Monday, February 12, 2018

Battlecreek Week One Retail Results SLAM in at 200% of Sales Goal!

Greetings again HHSE Friends & Followers:  Initial week depletions of BATTLECREEK DVD and BluRay formats (combined) clocked in at more than double the first week's sales forecast!  You can find this Hannover House item on sale at WALMART, TARGET, BEST BUY, K-MART, FAMILY VIDEO and many other top locations nationwide.

BATTLECREEK is benefiting from the momentum that star BILL SKARSGARD has created from his current # 1 top selling national hit, "IT" - to his upcoming new TV Series from JJ Abrams and Stephen King:  "CASTLEROCK" on Hulu.  Hannover House is "at the right place at the right time" with BATTLECREEK.

Pictured below is HHSE graphic designer JON McCALLUM admiring his packaging work at his local TARGET Store.  Also pictured below that is Mr. McCallum admiring the "hot-off-the-presses" movie posters for DEATH HOUSE - which launches to theatres beginning next Friday (Feb. 23).

We are frequently surprised at the hilariously-absurd levels of misinformation on the IHUB Chat Board.  Stock-Bashers pretending to be Movie industry workers or Broker-level stock experts flood the HHSE page with laughable misinformation.  So to be abundantly clear - once again (and apologies if these sentences are too complex for them to follow) - we will clarify our business model:

As with all theatrical releases for Hannover House, the company also controls the ancillary home video market, which (combined with Netflix / SVOD) are the real income sources for smaller independent films.  The exercise of releasing films like BATTLECREEK to theatres is geared primarily for satisfying release goals and benchmarks needed for the key video retailers and Netflix qulaification. Of course, we also make some money on the box office settlements... but we have yet to have a film where box office (ALONE) generates a positive return on the Prints & Ads (P&A) investment.  In this respect, we look at theatrical releasing as being the marketing engine that takes movies like BATTLECREEK, DAISY WINTERS, DEATH HOUSE and others to the "next level" of video sales success and streaming revenues.  In some cases, HHSE also controls the worldwide sales... so the theatrical activities fuel this awareness as well.  ONWARD!

Hannover's SOCIAL MEDIA campaign in support of the widely-available BATTLECREEK release has already generated over 800,000 impressions on FaceBooks, Instagram and Twitter!

Pick-Ups day for RIOT ACT provides HHSE with opportunity to shoot E.P.K. Interviews

Greetings HHSE Friends & Followers - the first pass edit is completed for the feature film, THE RIOT ACT, and director Devon Parks decided to shoot some additional scenes for pacing and continuity last Friday. This day of "pick-ups" occurred inside one of the period-restored Rail Cars of the Arkansas & Missouri Railroad in Springdale, Arkansas. After the full day of shooting, HHSE Director of Marketing DESIREE GARNIER and videographer JOSH IRWIN were able to get lengthy interviews with director Devon Parks and Producer-Leading Lady Lauren Sweetser. 

These interviews will provide useful material for National Broadcast Entertainment Shows and general media as part of the film's "Electronic Press Kit" (E.P.K.) in support of this summer's theatrical release.  This footage will also become one of the sources for the "making of" featurette that will appear on the DVD and BluRay copies of THE RIOT ACT.

This film looks superb, and seems well positioned for commercial success!

Director Devon Parks (left), with Camera Crew for Pick-Up Shots (Feb. 9, 2018)

Producer & Leading Lady Lauren Sweetser awaiting scene where she aboards train.

Lauren Sweetser, as Allye Pearrow, in THE RIOT ACT

HHSE Director of Marketing Desiree Garnier and star Lauren Sweetser await as Videographer Josh Irwin finishes the set-ups for the taping on the Electronic Press Kit on THE RIOT ACT.  

Director Devon Parks with HHSE's Desiree Garnier

Star Brett Cullen (right) is held prisoner by a mysterious spectre in THE RIOT ACT

Producer Lauren Sweetser with director Devon Parks on the streets of Van Buren, Arkansas, which were completely shut down for a week, converted to be consistent with the 1903 period, and covered with 70 dump truck loads of dirt for the filming of exterior sequences of THE RIOT ACT

Overcast skies, drizzly rain and muddy streets added to the character and grit of THE RIOT ACT - but posed no problems for the crew in getting complex dolly-tracking shots.

Sunday, February 4, 2018

The Superbowl of HHSE Blog Updates!

Greetings HHSE Friends & Followers - As many of you plan to watch the Superbowl today, we will do our best to keep this post concise.  But it won't be easy:  there are so many positive activities in motion!  So without further delay, here's the CLIFF NOTES abbreviated summary:

1).   UPLIST REGISTRATION - The dissolution with Crimson Forest will be completed this week, with a formal termination document that has been mutually approved, and a series of short-form terminations for the individual title agreements (as some had different licensors than Crimson Forest Entertainment Group, Inc.).  This will also trigger the long-requested removal of HHSE management names off the Nevada Secretary of State listing as corporate officers. Part of the overall settlement with CRIM involves the reversion of rights in "Where's the Dragon" back to the original licensors... which is why this item has not appeared on any of the HHSE release schedules for the past four months.  With the Crimson merger obstacle removed, the next steps for our uplist are as follows:

a).  PRE-AUDIT - Completion of formatting and overview by outside CPA - covering 2015 Tax Returns, and the full years of 2016 and 2017.  This step is expected to be completed this week, with the results handed over (along with the remainder of the audit materials) to our PCAOB firm.

b).  UPDATED LIBRARY REPORT - This step is expected to be completed by Feb. 26, and provided to the auditors as the last item for full delivery.

c).  REDRAFTED FORM 10 REGISTRATION - This is already completed, awaiting review by outside S.E.C. counsel, and the auditor's letters.

d).  TIMING - Once filed with the S.E.C., the registration becomes effective on the earlier of 60 days, or S.E.C. approval.  This will trigger our uplist to OTC: QB and the activation of stock share transfers electronically through the DTC.  Management believes that being fully registered, and uplisted away from the Pinksheets, will spark a wave of new investors and funds.

2).  CURRENT RELEASE ACTIVITIES - So much to report, but here are the highlights:

a).   BATTLECREEK hits most major retailers this TUESDAY (Feb. 6) - and is already the company's largest new release "shipped" item in five years.  Based on current pre-orders with Amazon.com, which are STRONG (actually 10-X stronger than last year's top video, "Lost in the Pacific"), we are hopeful that this consumer interest will also apply to Walmart, K-Mart, Target, Best Buy and other locations.  Check out this film, it's worth the modest purchase price!


b).  BLOODFEAST - A limited release of "R" rated DVDs and BluRays will also hit selected retailers on Tuesday... but the BIG GUNS will be blasting with our "SPECIAL, UNRATED AND UNEDITED DIRECTOR'S CUT" - which is rolling out "only in theatres" on a city by city basis.  Management believes that the hard-core Horror fans will support this Unrated version, and thus far, the response from the specialty media supports this belief.


c).  DEATH HOUSE - opens in theatres Feb. 23 - this deserves an entire mega blog to itself.  For now, we'll include the new trailer link.


d).  GETTING GRACE - opens in theatres March 23, and is already proving to be the company's top theatrical title, probably of all time (several "sneak peek" screenings have already occurred and SOLD OUT, with literally thousands of tickets cumulatively already sold!).  This title deserves two or three mega-blogs.  But for now, we'll include just a few images and a link or two.

Trailer # 1 (long version):  https://www.youtube.com/watch?v=l9EGeSSUCYI

"When Audiences Get Grace" (short film after one of many sold-out sneak peek events):


EVENT BRITE - Notification of THREE MORE sold out shows, after only 3-days of tickets going on sale!




Oh... and did we forget to mention the 26-city BUS TOUR prior to the theatrical opening?  Or the National Religious Broadcasters (NRB) promotion in Nashville?  Or the first-time-ever that the Children's Miracle Network has cross-promoted a theatrical release film? There's so much more to the Getting Grace release campaign, that other blog(s) would be required!

e).  QUIETUS - Retail support for this Feb. 27 long-anticipated re-release (and HHSE's first release of this item in Quality Trade Cover format), continues to build.  Shown below is the FULL PAGE ad for the Feb. 12 issue of PUBLISHER'S WEEKLY, the trade industry guide reaching 68,000 book industry professionals and book stores each week.  Also below is the Amazon.com product link...

Many top reviewers have described QUIETUS as a literary masterpiece... so get a copy and find out for yourself why major retailers such as Barnes & Noble, Books-A-Million and Hudson Group are presenting this book - first released in 2002 - back on the New Release shelves!


3).  SONY PICTURES HOME ENT. & DISTRIBUTION STRATEGIES - HHSE has been working for over a year now with industry veteran ERIC DOCTOROW, who is best known for his 20+ years as President of Paramount Home Entertainment (a $-Billion+ Division), and more recently as C.E.O. of Random Media.  Many current and upcoming HHSE titles will enjoy the distribution support through SONY as well as Video-On-Demand with The Orchard, and for selected titles, worldwide distribution with Sony Pictures International.  HHSE / Medallion are maintaining the existing distribution pacts with other wholesalers - most notably Cinedigm. But for eligible and qualifying titles, the distribution access into Sony's powerhouse field sales force and distribution pipeline is something of a material development for HHSE.  This move enables HHSE Management to focus on productions, acquisitions and theatrical release activities - and turn over the distraction and difficulties of home video distribution (as well as the cash-flow drain of video manufacturing and freight) to be handled under more beneficial terms.

The initial titles that will benefit under this new distribution pact are:  DAISY WINTERS, THE ALGERIAN and BONOBOS: BACK TO THE WILD.  There are other notable developments in motion with BONOBOS that will merit a separate blog or press announcement. But for now, here's a link to a behind-the-scenes look at the production of this film, and the woman behind the Lola Ya Bonobo Sanctuary in Africa:

Some HHSE longs will recognize that both ALGERIAN and BONOBOS were summer, 2015 theatrical releases for Hannover House.  These items were held-back from Home Video release initially due to the prior merger with Crimson, but more recently due to the expectation of greater sales upside that may be obtainable through the Sony sales network.

4).  VODWIZ - There's so many exciting developments and updates for us to cover on this venture - that even a Cliff Notes summary at this time cannot do it justice.  Stay tuned for separate news on this topic!

Who Will Win the SUPERBOWL Today?  Hard to predict... but it's not hard to predict that HHSE has reached a significant turning point in the company's history!


Thursday, January 11, 2018

Yowsa! Mega-Success of "IT" video release spurs THOUSANDS of new orders for HHSE's BATTLECREEK!

Dear HHSE Friends & Followers - This Tuesday was the Video release date for the blockbuster theatrical hit "IT" - starring Bill Skarsgård as the super-scary clown.  Consumer response for "IT" has been so substantial that Hannover House has already received  new orders for multiple thousands-of-units of "BATTLECREEK" (street date Feb. 6), also starring Bill Skarsgård!  The momentum might get even stronger with the February launch of Bill's new TV series, "CASTLE ROCK" from J.J. Abrams, Stephen King and HULU.  With "BATTLECREEK" right in the middle of a media-feeding-frenzy for Bill Skarsgård - this title looks to be positioned as a very successful video release for Hannover House!

Thursday, January 4, 2018

HHSE Engages Counsel to Dispute Fraudulently Obtained Judgments, and other updates

Greetings HHSE Friends & Followers - As a component of our move to clean-up our balance sheet and shed the company of frivolous lawsuits and erroneous debts, HHSE has engaged the Law Firm of Steven H. Kay Associates in Fayetteville, Arkansas.  Mr. Kay will be filing motions to initially "freeze" collection efforts by BEDROCK VENTURES and JSJ INVESTMENTS - based on the fraudulent nature of the underlying claims and the "foreign judgment" status that can be contested and adjudicated under Arkansas Law for foreign default judgments (i.e., defaults obtained in states other than Arkansas).  HHSE Shareholders may recall that we pursued this same strategy with TCA Global Master Fund - a company that is often considered to be the nuclear bomb of Predatory Lenders - and HHSE prevailed under Arkansas Law.

HHSE Shareholders might also recall that Steven H. Kay was counsel for HHSE recently in the case against Amityville Asylum producers filing a frivolous claim for "projected" amounts due.  It was HHSE position that the producers were only due the amounts per the terms of the contract... not a projected amount that the producer "felt" the movie "might have earned."  The claim for more than $300,000 by Amityville was reduced to the actual balance of $17,000 and change, which was the outcome that HHSE successfully sought to obtain.

HHSE Shareholders may also recall that "stock short-sellers" were crying "sky is falling, the end is near" with the Amityville lawsuit filing, in hopes of persuading emotional sellers to dump HHSE stock last summer.  Again, we remind all shareholders to refer to HHSE filings and this blog for legally accurate information and full disclosures, as opposed to paying any attention to the drunken mumblings of anonymous chat-board short-sellers. These naysayers know that their days of having any impact against HHSE are short-numbered, as our Form 10 registration will elevate the access of the company's stock to a much wider base of investors - thus minimizing the impact of self-serving, chat-board chatter.

Regarding BEDROCK, due to breached commitments for funding the company that were the basis of a massive stock issuance by HHSE to Bedrock, HHSE counsel feels that this California judgment filing has a solid basis to be contested, adjudicated and won in Arkansas Courts.

Regarding JSJ INVESTMENTS, the refusal of JSJ to accept cash plus interest in full (per the terms of the note), but instead to sue for more than three-times the amount on the pretense that "they were always entitled to shares, not 'just' repayment" renders the note usurious and illegal under the laws of virtually every state.  Counsel, therefore, feels that a motion to freeze collection efforts and to re-open the claim so that it can be adjudicated, is a likely result for HHSE.

In other corporate governance matters, the company has renewed it's various corporate filings with the Secretary of State offices in Wyoming and Arkansas (an annual house-keeping matter of a simple filing).  The company has also received confirmation from the IRS that the full payroll tax liabilities that were the subject of a prior lien have been fully paid, and that a reconciliation of the revised amount of interest and penalties (also paid) shall be issued shortly and submitted to all HHSE customers receiving levy letters.  HHSE has since engaged a payroll service to handle the monthly 941 and tax paperwork filing requirements. 

All of these steps are elements of the Form 10 Registration that the company is planning to file in the upcoming weeks... and to set off 2018 as an epic year for our loyal and fully informed shareholders!


Tuesday, January 2, 2018

Update on corporate filings

Happy New Year to HHSE Friends & Followers. Here's a couple of quick updates on corporate filings.

1).  Q3 filings will be submitted to the OTC Markets tomorrow - this should restore the company's "current" status. UPDATE: THURS., JAN. 4 - The annual HHSE subscription to the OTC Markets had expired and had to be renewed (which occurred on Tuesday); However, OTC MARKETS client services told HHSE this morning that the company's access to post reports (currently Q3), will be activated within the next day or two.

2).  Q4 filings will be completed by Monday and provided (along with full 2017 results) to the outside CPA firm conducting the Pre-audit review.

3).  Upon completion of the Pre-audit review, HHSE will submit the full 2016 and 2017 packages to our auditors in preparation for the stock registration filing.

4).  Annual corporate governance filings (with applicable Secretary of State and Registered Agents) will also occur this week.

Watch for press news on new releases and distribution updates this week and next week. Very exciting times....

Saturday, December 23, 2017

Where we have been... Where we are now... and Where we are going at HHSE...

Greetings HHSE Friends & Followers:

As we reflect back on 2017, HHSE Management is taking a few days to look at our past, present and future activities to help guide sage decisions.  2017 has been a momentous year for the company - due in large part to the attempted (but terminated) merger with Crimson Forest, and the subsequent re-focus of the company's primary activities and revenue streams.

Looking much further back - five, six, seven years and more - and looking forward in time for an equal time-frame, we can see trends and opportunities for HHSE and our shareholders.

First of all, we'd like to point out that Hannover House is unlike most any other "OTC Pinksheet" listed company.  We have been operating continuously since 1993 (24-years) and have been reporting to the OTC Markets since Dec. 2009 (8-years).  Statistically, most OTC listed equities are flashes-in-the-pan time wise... lots of Stock Hype / I.R. Promotions, insider share dumps, and quick closures.  That's definitely not HHSE.

As a result of this general trend for Pinksheet companies, a whole sub-industry of stock manipulators has developed that can impact OTC-Pinksheet listed companies (for the entirety of OTC markets in general, not specifically limited to Hannover House).  Like a gang of drunken hobos in public park - mumbling to each other with insane prognostications - the stock hobos are only effective against low-information shareholders gullible enough to actually read the chat-board postings of manipulative and fact-free ramblings.

Fortunately, every false statement made by the stock hobos or those manipulators attempting to "box" or otherwise control the HHSE stock price, can be easily countered with demonstrable facts.

So, let's take a few minutes to take a high-altitude look at the Company and where we are going.


*  We believe that HHSE is "one film away" from being a major independent studio. All it takes is any one of the many titles in our current release queue to become a surprise box officer performer such as "Lady Bird" or "Get Out" and we are suddenly a $100-MM company.

*  We have an impressive slate of titles for 2018 and 2019 - and two terrific distribution partners for North America (Cinedigm Entertainment and Sony Pictures Home Entertainment) - as well as our direct relationships with all of the major theatre exhibition chains. Our "lower-end" titles are much higher profile than in past years... and our higher-end titles are now genuine theatrical caliber contenders. We are positioned for the proverbial lucky break that happens when the right film is released at the right time...

*  Our recently re-focused Theatrical Release model is delivering huge benefits to our ancillary revenues... and our new partnerships with indie labels is providing access for the VODWIZ streaming venture, which truly could become "the tail that wagged the dog" for HHSE shareholders.

What else is worth noting for this long, holiday weekend?  Here are a few observations:

1).  Hannover House has Not Issued any Shares in 2.5-years.  See the chart below.  For the company's first two years as a public equity, the stock structure was quite stable.  For the past 2-1/2 years, the stock structure has also been stable.  But in 2013 and 2014, the company got involved in some ugly predatory lender situations, most notably TCA Global and JSJ, which precipitated a rapid growth in share issuances. The business model for both TCA and JSJ - as exercised against HHSE and many other borrowers - is to make repayment with cash as difficult as possible, in order to force a "conversion of the debt" into freely trading shares of the issueer at a dramatic discount-to-market. Such returns grossly exceed the legal usury law limitations in all states, and this general business practice is operating in a legally dubious space.  JSJ, for instance, refused to accept repayment from HHSE via a bank wire transfer (including all applicable, legal interest per the note), preferring instead to file a lawsuit (in Texas?!), in order to try to force repayment via shares at 200% or more interest.  These predatory lenders generally prey on companies that are unable to defend themselves, and therefore are forced to allow the lenders to squeeze out profits far in excess of lending laws through toxic-conversions; most of the time, these small borrowers are ultimately forced out of business.  However, this was not the case with Hannover House - as the company has a  operating business that is unaffected by fluctuations of our stock price and not dependent on the issuance of shares for capital. These toxic dilutions from 2013 and 2014 definitely hurt our shareholders, and hurt our "market cap," as demonstrated in the charts.  So, the Board voted to cease such forms of borrowing, and as a result, HHSE has not issued any new shares in 2.5-years.  Anyone predicting on a chat board or anywhere else that a "big dilution is coming" is mistaken.

2).  It Doesn't Take Much to Double or Triple the HHSE Share Price - Look at the market-cap spike for HHSE stock earlier this year (seen as June, 2017).  This increase in PPS was due to shareholder excitement about the prospect that a merger with Crimson Forest would provide HHSE with high-profile films to distribute.  The growth in PPS was not based on any increase in revenues (in fact, the time-distraction of the Crimson merger caused many 2017 releases to be delayed).  The PPS spike was driven solely by enthusiasm.

3).  Does HHSE Need a Merger Partner? - If the right opportunity came along that would provide HHSE with a reliable source of high-end theatrical titles, we would be responsive to consider such opportunities. However, the programing philosphy ultimately revealed by Crimson Forest did not conform to North American market conditions, in HHSE's opinion. When the promised operating funding didn't materialize, the promised high-end productions turned into low-end films, and the promised "big" releases all turned out to be Mandarin-language releases, we knew that the partnership would not deliver what HHSE wanted for our step-up to major independent status.

4).  What's in Store for the first half of 2018?   

a).  Release Activities:  January will see the theatrical release of "BLOODFEAST" - delayed since July due to MPAA re-cut needs.  February will see a massive placement of DVDs and BluRays for "BATTLECREEK" (street date Feb. 6).  That same week, on Friday (Feb. 9), HHSE will commence the initial theatrical launch of "DEATH HOUSE" to theatres.  In April, three titles will be released via Sony Pictures Home Entertainment (including "DAISY WINTERS");  in May, HHSE will release "THE RIOT ACT" to theatres and Cinedigm will release DVD's and BluRays of "THE LENNON PROJECT" for the Company. Other titles in queue for theatrical and / or home video during the first half of 2018 include "MUSE", "INSOMNIUM", "IDENTITY CRISIS", "SLEEPER CELL", "DINOSAURS OF THE JURASSIC" and "SACRED HEARTS" (all but the last title were planned for 2017, but delayed during the Crimson merger pursuit).  

b).  Corporate Governance:  HHSE will be re-filing a Form 10 Registration with two full years of audits (2016 and 2017) early this coming year, during the first few weeks; the CPA review is already underway and much of the documentation and procedural steps for the audit were already assembled during 2017 while planning for the Crimson merger.  We feel that a registration of the shares and the subsequent uplist to OTC:QB will attract more investors and some institutional funds... resulting in a higher anticipated daily trading volume, and a predicted much higher HHSE stock price (based on business results, industry fundamentals and the proven power of Shareholder Enthusiasm). 

c).  New Ventures - With Sony and Cinedigm handling selected HHSE releases, our management time can be redirected towards theatrical releases, higher-end acquisitions (including productions) and our VODWIZ streaming venture.  As will be seen in our 2017 filings, theatrical release activities are the engine that is now driving HHSE revenues in all other arenas.  Theatrical titles get more shelf space and priority placement when released to home video; theatrical titles get larger license fees from Netflix and Television licensors;  and theatrical titles provide two direct revenue streams for HHSE in the form of both servicing fees and revenue participations.  The current mass merchant and key video retail support for "BATTLECREEK" evidences the sales boost that a targeted, limited theatrical release can deliver for the subsequent home video release.

5).  Thoughts on the HHSE Stock Chart - The chart below is divided into two sections.  The top section shows the "approximate market cap" at six-month intervals beginning in June 2010 and continuing through to this week. The Market Cap was calculated by the total of all shares in issue, multiplied by the closing price of the stock during a one-week period during the stated month.  The bottom section of the chart shows the total SHARES IN ISSUE for the company during this same time frame. The dark-blue shares represent those that are "restricted" from sale, and the light-blue shares represent the total share count of restricted plus unrestricted shares for that time period.

Perhaps the most visible trends to see on this chart are that the company did very little in share issuances for the first two years... and none for the past 2.5-years - as seen by the flat-line of total shares in issue.

The next interesting item of note is the tremendous PPS Spike that occurred earlier this year, at which time the Market Cap jumped from $5.4-MM to $24-MM in just a few month's time.  What's interesting about this result is that the company was functionally frozen from new releases during that time, so the sudden shareholder enthusiasm cannot be attributed to improved revenues... it can only be viewed as a reaction to the prospective merger with Crimson.  The current Market Cap of $12.4-MM has been stable for quite a few months now.

A third observation can be seen during the "heavy dilution" time-frames of 2013 to the end of 2015, when TCA (via MAGNA) and JSJ were flooding the market with toxic-conversion shares. What is interesting about this? Well, the market cap stayed surprisingly stable during this dilution... meaning that the average PPS went DOWN while the total float went UP, but the overall Market Cap remained steady.  HHSE Management believes that the Market Cap remained relatively steady during these dilution times due to Investor Relations / Stock Promotions. As the toxic-lenders dumped their HHSE shares onto the market, some effort was being expended (by them or third parties) to create an investor market for their share dumps... which is another reason why HHSE management hates the concept of these toxic-conversion notes.  It also answers the question that some shareholders have posted to HHSE management over the past few years about "why aren't you doing IR / Stock PR now?" The answer is that we are are focused on building the fundamentals of the business rather than on creating a momentary spike in PPS interest while some third party lender dumps out shares.  We are not philosophically opposed to I.R. and new investor outreach. We just feel that the cost of such promotions would be best utilized after our Registration and other major events in the works.

There are more thoughts and developments to share... watch this blog over the holidays, and watch for news releases occuring between Christmas and New Years, as well as during the first week of January.  Happy Holidays / Merry Christmas / Happy New Year and Best Wishes to all our HHSE shareholders!