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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2017
CRIMSON FOREST ENTERTAINMENT GROUP INC.
(Exact name of registrant as specified in its charter)
Nevada 0-55142 27-2838091
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8335 Sunset Blvd., Suite #238, West Hollywood, California 90069
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (323) 337-9086
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On March 12, 2017, subject to regulatory approval and other financial considerations, the Board of Directors of Crimson Forest Entertainment Group, Inc., a Nevada corporation (“ Crimson ”), and the Board of Directors of Hannover House, Inc., a Wyoming corporation (“ HHSE ”), signed a Memorandum of Understanding to indicate the mutual intent to merge the operations of the two companies through a stock-for-stock swap. Based on reasonable valuations for both Crimson and HHSE, including current assets, new projects and goodwill, after approval of the merger the existing shareholders and managers of HHSE will collectively own approximately 57.1% of the combined stock, and the existing shareholders and managers of Crimson will collectively own approximately 42.9% of the combined stock. HHSE assets, including goodwill were valued at $17,029,250 and Crimson assets, including goodwill were valued at $12,870,750.
Per the terms of the Memorandum of Understanding, Crimson shall be required to promptly file all required quarterly and annual reports to restore its current trading status as a fully reporting equity. Upon the completion of these corporate compliance matters, Crimson and HHSE shall initiate the stock-for-stock swap and redemption. Based on the terms of the merger, HHSE shareholders will receive Crimson shares at a premium-to-market valuation. The effective date when the two companies expect to be operating on a defacto basis as a merged entity is May 1, 2017. Crimson and HHSE anticipate that regulatory approval of the merger shall occur shortly thereafter, and that full reporting compliance shall occur on or about May 15, 2017, after which time, HHSE shares shall be exchanged for Crimson shares at a market-to-value premium to be determined at the date of the redemption based on market pricing.
Following the merger, Crimson shall proceed with new financing for the combined entity, including presale funding for several high-profile feature films and general operating and releasing capital. Principal Officers, Directors and Managers for the combined company shall be Jonathan Lim (Chairman), Eric Parkinson (C.E.O.), Fred Shefte (President) and Tom Sims (Vice President).
In addition to seeking regulatory approval for the merger, Crimson has also applied with FINRA for approval of a new stock-trading ticker symbol, to differentiate the new (post-merger) company and operations from the prior activities of Crimson as primarily a production-oriented company.
The foregoing is a general description of the stock-for-stock swap Merger plan; it does not purport to be complete and is qualified in its entirety by reference to the Memorandum of Understanding (the “ MOU ”), which is attached as Exhibit 1.1 to this Current Report on Form 8-K and incorporated in this report by reference.
2
A copy of the joint press release issued by Crimson Forest Entertainment Group, Inc. and Hannover House, Inc. announcing the mutual intention to merge operations into one company, and the effectiveness of the Memorandum of Understanding is attached hereto as Exhibit 2.1 and incorporated herein by reference.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
The Merger of these two companies as described in this filing and Exhibits has not yet been approved by FINRA or other applicable regulatory authorities, including but not limited to the United States Securities and Exchange Commission (the “ SEC ”) and the OTC Markets (the “ OTC ”). Investors and security holders are urged to read both the MOU and the Long-Form Merger Agreement (the “ LFMA ”) that CFEG and HHSE anticipate completing and filing covering the terms as described in the MOU, and other additionally required terms and language to meet compliance requirements. CFEG and HHSE anticipate completion of the LFMA on or before May 15, 2017. Investors and security holders may obtain free copies of these statements (when available) and other materials filed with the SEC at the website maintained by the SEC at www.sec.gov, or by directing requests for such materials to the information agent for the Merger transaction, which will be named in the LFMA.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
1.1 Memorandum of Understanding covering the intention to merge operations, assets, current and future activities and stock of Crimson Forest Entertainment Group, Inc. with the operations, assets, current and future activities and stock of Hannover House, Inc.
2.1 Joint press release dated April 26, 2017
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CRIMSON FOREST ENTERTAINMENT GROUP INC.
(Registrant)
Dated: May 1, 2017 By: /s/ Jonathan Lim
Name: Jonathan Lim
Title: Chief Executive Officer
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EXHIBIT 1.1 – to FORM 8K Information Statement Filing
Short Form Memorandum of Understanding (“MOU”)
Crimson Forest Entertainment Group, Inc. – Hannover House, Inc.
CORPORATE MERGER AGREEMENT & OUTLINE OF OPERATIONAL BUSINESS PLAN
WHEREAS Hannover House, Inc. is a publicly traded entertainment company actively involved with the distribution of feature films, television and video programming in all media to all applicable markets (referred to hereunder as “HHSE”);
WHEREAS Crimson Forest Entertainment Group, Inc. is a publicly traded entertainment company actively involved with the financing and production of feature film programming, especially with films that have a value for the China marketplace (referred to hereunder as “CFEG”);
WHEREAS principals and managers of HHSE and CFEG (the Parties) have determined that a merger of the two companies and operations will be in the best interests of all shareholders (i.e., the shareholders of both CFEG and HHSE), which resulting company is herein sometimes referred to as Newco. The Parties shall initially refer to the resulting, merged company, in references to third parties as Crimson Forest, but intend to reasonably consider a new branded name in the near future, and to expeditiously apply for a different stock trading ticker symbol.
THEREFORE, subject to approval of a majority of the voting shares for each of CFEG and HHSE, the parties agree to proceed with a binding agreement and merger or corporate restructuring as may be recommended by securities counsel (hereinafter referred to as “merger”) to be initiated via an operational and merger plan that the principals intend to be substantially similar to the steps described below, and which merger terms shall be subject to approval of applicable regulatory authorities and both the Parties after consultation with and receiving the advice of competent Securities Counsel and under applicable laws. Both CFEG and HHSE agree that this Memorandum of Understanding (“MOU”) describing the party’s mutual intent to merge operations shall be replaced with a more formal merger document encompassing these terms, any additionally agreed to terms, and standard securities and legal language required for such transactions (“Long Form Agreement”). However, until such time that such a Long Form Agreement may be drafted and mutually executed, this MOU shall govern with the full and binding authority of a contract, covering the parties agreements as described hereunder:
1) VALUATION – SUBJECT TO THIRD PARTY REVIEW OF METHODOLOGIES FOR VALUATION, and based on assets, liabilities, revenues, goodwill and pending new ventures for both HHSE and CFEG, the following net “valuations” have been mutually determined as follows:
a). CFEG Valuation: $ 11,370,750 42.9 %
b). HHSE Valuation: $ 18,529,250 57.1 %
It is understood and agreed by both parties that the precise valuations of CFEG and HHSE may be modified prior to the closing of this merger as may be required to conform to G.A.A.P. standards and securities laws; methodologies for determining the above valuations are listed on Exhibit “A.”
2) MERGER STEPS
a). HHSE STOCK AND SHAREHOLDERS - HHSE shall be responsible for the required steps to effectuate the merger with respect to existing HHSE shareholders, HHSE assets, HHSE liabilities and obligations op operations up to and until the merger is completed. HHSE represents and warrants that shareholders representing a majority of the shares and stock ownership and voting authority have approved the basic terms of this MOU and merger transaction as being in the best interest of all HHSE shareholders. If so required by applicable regulatory authorities, HHSE shall notify all other shareholders of the terms of this MOU and how the merger is expected to generate significantly higher value for the company and its shareholders. HHSE managers shall be responsible for overseeing and implementing the procedures for the allocation and redemption of HHSE shares to all applicable shareholders, which shall be exchanged for CFEG shares upon regulatory approval.
b). CFEG REPORTING COMPLIANCE - CFEG shall provide adequate financing and supporting documentation to enable CFEG to be restored back into “current reporting” status and full reporting compliance with the Securities & Exchange Commission and OTC Markets as an OTCQB qualified company with all due haste. CFEG shall pay all costs to effect such filings as may be necessary to obtain such status, including, but not limited to legal and accounting / auditing fees. CFEG represents and warrants that shareholders representing a majority of the shares and stock ownership and voting authority have approved the basic terms of this MOU and merger transaction as being in the best interest of all CFEG shareholders.
c). CFEG STOCK RESTRUCTURING – Following industry procedures, and respecting regulatory requirements, applicable laws and generally accepted accounting principles, upon approval of the merger, HHSE shareholders shall receive CFEG stock at a formula which results in 57.1% ownership for HHSE shareholders, and 42.1% ownership for CFEG shareholders, including a premium return for HHSE shareholders based upon a seven (7) trading day Volume Weighted Average Price (VWAP) of the HHSE stock price preceding the day of merger approval from applicable regulatory authorities. With respect to CFEG Preferred Shares, each of CFEG and HHSE shall receive one-half of the stock, with Jonathan Lim as the initial designee for CFEG and Eric Parkinson as the initial designee for HHSE; it is understood and agreed that the Preferred shares may be subdivided post-merger. Additionally, CFEG shall be entitled to appoint two (2) members to the new board of directors and HHSE shall be entitled to appoint two (2) members to the board of directors, with a fifth board of directors member to be mutually approved by CFEG and HHSE. The applicable corporate by-laws governing such actions shall be attached to the Long Form Merger Agreement (“LFMA”) which both parties anticipate completing on or before May 15, 2017.
d). PUBLIC NOTICE – Upon approval of Securities Counsel, both CFEG and HHSE (either as separate, publicly reporting entities, or reported as a combined entity if appropriate), at the earliest practicable time, shall file the proper notification forms to shareholders via a Form 8 Information Statement or other such instrument as counsel may direct and be required by regulatory authorities.
e). TICKER SYMBOL CHANGE – Both CFEG and HHSE agree to apply for and pursue with FINRA the issuance of a “new” ticker symbol for the combined companies.
f). INTERIM STEPS – During the time that this merger is being finalized and approved, each company shall continue to operate separately, excepting for the following areas of overlap.
3) MERGER STRUCTURE – SUBJECT TO REVIEW OF ATTORNEYS, INCLUDING THE VALUATION METHODOLOGIES AND IMPLICATIONS REGARDING THE TAXATION OF PARTIES UNDER THE CONTEMPLATED TRANSACTION, the Parties intend to restructure the stock for both HHSE and CFEG in order to reasonably support and quantifiably justify a post-merger stock structure that best positions the company for eligibility to uplist to NASDAQ, which both HHSE and CFEG share as a mutual goal, following the receipt of the significant new financing that has been arranged for new productions and activities by CFEG.
4) POST MERGER OPERATIONS – Following the completion of the merger of the companies, which is expected to be based in large part on an IRS Section 368 Stock-for-Stock Swap, the principal managers of the newly merged company, and the primary areas of their responsibilities are listed below:
a) JONATHAN LIM (“Lim”) – Chairman – Involved primarily as a film producer and distributor as well as the company’s primary liaison to obtain distribution agreements with media companies in China and the solicitation of investment capital, loans or stock equity sales to investors or companies from China. Lim is also designated to perform services as Director of future projects that he may develop.
b) ERIC PARKINSON (“Parkinson”) – C.E.O. and Corporate Secretary – Involved as one of two principal managers in the day-to-day operations of the company, from administration of public company duties to the sales, marketing and distribution of programming. Parkinson is also designated to perform services as Director of “Mother Goose: Journey to Utopia.”
c) D. FREDERICK SHEFTE (“Shefte”) – President and Corporate Treasurer – Involved as the other primary manager of all operations and activities for the company, with special emphasis on operational logistics, legal matters and management of payables, receivables and debts.
d) TOM SIMS (“Sims”) – V.P. Sales – Involved in the ongoing distribution management of HHSE and CFEG titles to the physical home video markets, and digital platforms, as well as the anticipated position of overseeing third-party studio label distribution pacts. It is also anticipated that Sims shall be the primary manager for the VODWIZ venture.
The applicable monthly salaries for the executives described above for the initial period from May 1 through July 31, 2017, is itemized on the attached Exhibit “B” – additionally, it is anticipated that each of these four principals shall receive some form of soft benefits, including a health insurance and cell phone allowance. Employment agreements for Parkinson as C.E.O, and Shefte as President shall be attached to the long form merger agreement.
e) ARKANSAS OPERATIONS / LOS ANGELES OPERATIONS – It is anticipated and agreed that the company shall initially maintain its current, primary distribution offices in Fayetteville, Arkansas, located at 300 N. College Ave., Suite 311. Additionally, it is agreed that the company shall also open a Los Angeles area office within 90-days of the closing of the merger. The Arkansas Distribution Office – and the Los Angeles Acquisitions & Production Office shall be linked via Skype or other form of telecommunications to improve communication efficiencies.
5) DIRECT STOCK SALES / OR S-1 SHELF REGISTRATION – As discussed between the principals, and subject to approval of Securities counsel, it is agreed that the company shall accept direct investments from producers and investors either through some version of a “Direct Stock Sale” or if appropriate and so required, through the filing of an S-1 Shelf Registration with the S.E.C. At present, the fully funded feature productions of “ Kung Fu Cowboys ” and “ Nian ” (working title) shall be recognized as revenues due to the presale structure of rights allocation with the financiers of those two films. Also, following merger approval, CFEG shall seek to expeditiously consummate the placement of a four-million-dollar (USD $4,000,000) direct stock purchase from a major media company, which shall result in the issuance of stock in exchange for this direct stock purchase, but which shall occur at a one-hundred-percent (100%) premium over the trading price of the combined company stock during the seven prior days of the Volume Weighted Average Price (VWAP), e.g., if the stock is trading for USD $1.00, this direct purchase shall occur at USD $2.00 per share. Neither CFEG nor HHSE anticipate any other direct stock purchases into the merged entity, as the additional funding is expected to be structured as pre-sales or debt, and not treated as equity dilution of the company.
6) ONGOING ACTIVITIES – It is agreed that projects currently in development for HHSE shall be diligently pursued for financing as described in the Business Plan Outline prepared and submitted by HHSE, but that neither CFEG nor the combined and merged companies under Newco shall be obligated to finance these proposed productions should private investment or debt financing not ultimately be available.
7) APPLICABLE LAW & CORPORATE STRUCTURES – Disputes under this merger agreement shall be subject to California Law and jurisdiction, until such time that HHSE and CFEG and Newco shall be fully merged into one entity. Thereafter, it is anticipated that the domicile and jurisdiction of Nevada shall survive for the merged entity. If allowable under an IRS Section 368 Stock-for-Stock Swap, and/or in conjunction with IRS Section 351 to allow for “non-recognition transaction” for tax purposes, the Wyoming corporation currently operating as Hannover House, Inc. shall be stripped of all assets and activities except for a quantity of “Preferred Stock Shares” to be determined by Parkinson and Shefte, as well as the placement a negligible amount of assets as may be required to maintain that separate entity as a non-shell operation as defined under securities laws. However, the trade names of Hannover House, Medallion Releasing and VODWIZ shall be sold, licensed and otherwise transferred into the merged company, along with the tradename of Crimson Forest Entertainment Group, Inc. Parkinson and Shefte agree that the former Wyoming Corporation shall not engage in any activities considered competitive or otherwise identical to activities of the merged company, unless approved by the Board of Directors for the merged HHSE-CFEG operations. Otherwise, if so required under the rules and regulations of an IRS Section 368 Stock-for-Stock Swap, the corporate entity for Hannover House, Inc. shall be dissolved or shall be incorporated into the newly merged entity, said disposition to be determined by counsel under applicable law considering beneficial values.
8) DISSOLUTION – HHSE may elect to withdraw from this merger in the event that significant fundings from Crimson or Crimson related productions or media partners do not materialize within sixty (60) days or the later of May 15, 2017; Notwithstanding the May 15 deadline, HHSE may elect to withdraw in the event that Crimson fails to complete corporate governance issues and public company filings in a timely manner (including, but not limited to merger filings, audits and the provision for funding of ongoing release activities for titles under CFEG/HHSE/NEWCO). HHSE may elect to withdraw from this merger in the event that the contemplated transaction is determined to be a taxable event, or if regulatory authorities deem material aspects of the proposed merger to be unlawful, or if other issues arise that are presently unknown but which indicate that the merger would be harmful to HHSE and its shareholders. CFEG may also elect to withdraw from this merger prior to May 15, in the event of a material misrepresentation of facts or figures by HHSE on documentation provided by HHSE to CFEG during the negotiations and structuring of this merger.
READ, UNDERSTOOD AND AGREED THIS TWELFTH DAY OF MARCH, 2017, BY AND BETWEEN:
Crimson Forest Entertainment Group, Inc. Hannover House, Inc. / Medallion Releasing, Inc.
(OTC: CRIM) “CFEG” (OTC: HHSE) “HHSE”
By: /s/ Jonathan Lim By: /s/ Eric Parkinson
Jonathan Lim, President Eric Parkinson, C.E.O.
By: /s/ D. Frederick Shefte
D. Frederick Shefte, President
Exhibit “A” – Assumptions and Methodologies Summary for Valuations
The following considerations were utilized in determining the respective valuations for HHSE and CFEG regarding the merger as proposed under this MOU. Both HHSE and CFEG acknowledge that the methodologies for valuations of publicly-traded companies involve many factors, accounting principles, laws and practices, and that both HHSE and CFEG agree that the merger must conform to all applicable mandates governing public company mergers.
HANNOVER HOUSE, INC., (HHSE)
1) Accounts Receivable – HHSE A.R. as of 12-31-2016 has been reduced to eliminate receivables that are significantly past payment terms or otherwise considered difficult or uncollectible.
2) Film Library Valuation – DVD and BluRay forecasts for the Library have been reduced by 72% (on average) to reflect a decline in physical unit sales; Video-On-Demand revenues for theatrical titles have been increased by an average of 19%; Television and International revenues remain unchanged, especially in respect of the new major studio distribution pact, to be announced post-merger. One-Hundred-Twenty-One (121) titles acquired in the last five years have been given a zero-dollar ($0) library valuation - as the reasonable, net income forecasts from sales of these newer titles has not yet been properly valued by an independent, third-party firm.
3) Overall Assets and Debts – Post merger HHSE debts have been reduced from the overall valuation of HHSE.
4) Goodwill – CFEG and HHSE have mutually agreed on a reasonable valuation of “Goodwill” in respect of a variety of factors, including exclusive distribution arrangements with theatre chains, studio partners and broadcast outlets, brand name awareness, longevity of HHSE, and the unrecognized value of the newer library titles.
CRIMSON FOREST ENTERTAINMENT GROUP, INC. (CFEG)
1) Asset Values – Consideration has been given for the capitalized cost of film productions, acquisitions and prior release activities for CFEG.
2) New Receivables / New Financing Ventures – Consideration has been given for the net income value of the significant presales arranged by CFEG to fund the production costs for the upcoming, capitalized assets of “ Kung Fu Cowboy ” and “ Nian ” (working title).
3) Overall Assets and Debts – A reduction for the cost of the Convertible Notes to Samcorp (Anthony Lim) has been applied, even though the Samcorp notes have recently been restructured to more favorable terms and a conversion option formula.
4) Goodwill - CFEG and HHSE have mutually agreed on a reasonable valuation of “Goodwill” in respect of a variety of factors, including CFEG’s extensive history and relationships with key media companies and financiers from China, including film rights pre-sale opportunities, direct investment funding and other beneficial ventures.
Exhibit “B” – Initial Operating Overhead and Budgetary Needs
CFF / HHSE NEWCO
Monthly Operating Budget - May 1 through July 31, 2017
Employer Addl TOTAL
Description Payee Amount Taxes Benefits ITEM
Chairman Jonathan Lim* $ 12,000 $ 1,020 $ 450 $ 13,470
C.E.O. Eric Parkinson* $ 12,000 $ 1,020 $ 450 $ 13,470
President Fred Shefte* $ 12,000 $ 1,020 $ 450 $ 13,470
V.P. Sales Tom Sims $ 7,500 $ 638 $ 300 $ 8,438
Accountant To Be Determined $ 4,000 $ 340 $ 150 $ 4,490
Marketing Director To Be Determined $ 4,000 $ 340 $ 150 $ 4,490
Sales Admin. To Be Determined $ 3,250 $ 276 $ 150 $ 3,676
L.A. Office Manager To Be Determined $ 3,250 $ 276 $ 150 $ 3,676
Admin Asst. - ARK Maryevelyn Jones $ 2,750 $ 234 $ 150 $ 3,134
$ 68,314
Arkansas Rent Mathias Property $ 2,350 $ - $ - $ 2,350
Los Angeles Rent Estimated $ 2,000 $ - $ - $ 2,000
Arkansas Utilities Estimated $ 800 $ - $ - $ 800
L.A. Utilities Estimated $ 600 $ - $ - $ 600
Office Supplies Various / Allow $ 400 $ - $ - $ 500
Non-Billable Freight Various / Allow $ 400 $ - $ - $ 500
Misc Office Needs Various / Allow $ 400 $ - $ - $ 400
$ 7,150
TOTAL MONTH $ 75,464
FIRST THREE MONTHS OF MERGER $ 226,391
* Indicates gross allocation, which managers may elect to receive, assign or defer.
EXHIBIT 2.1 – to FORM 8K Information Statement Filing
FOR IMMEDIATE RELEASE
Crimson Forest and Hannover House Initiate Corporate Merger to
Become Major Independent Distributor
— Combined Company to Launch Slate of High-Profile Films for Theatrical, Home
Video and International Release—
(Los Angeles) (April 26, 2017) Feature Film Production Company Crimson Forest Entertainment Group Inc. (OTC: CRIM) and specialty theatrical and home video distributor Hannover House, Inc. (OTC: HHSE) have confirmed plans to merge operations under a stock-swap and financing plan, scheduled to be effective as of May 1, 2017. Specific terms of the transaction were not disclosed.
The combined company will immediately launch production activities on a slate of high-profile feature films that will drive the theatrical, home video and international release schedules for the coming years.
Formed in 2010, and financed with investment capital and presales from China, Crimson Forest Entertainment has successfully financed and acquired several films for international and North America distribution. PALI ROAD was the first Hawaii-China co-production, starring Jackson Rathbone from the highly successful, “The Twilight Saga,” Sung Kang from the hit box office franchise, “Fast & Furious,” Henry Ian Cusick, best known for his roles in “L.O.S.T.,” and “The 100,” and Chinese Superstar Actress Michelle Chen, who received the Asia Rising Star Award for her role in the movie, “You are the Apple of My Eye,” one of the highest grossing Taiwanese films in the history of Chinese cinema. The film premiered at the Hawaii International Film Festival and went on to win several awards, including “Best Actress” “Best Cinematography” and a “Best Director” award at the 12 th Annual Chinese American Film Festival. The film was released theatrically, both in North America and China, and in Malaysia earlier this month.
Formed in 1993 and growing into one of the top independent distributed labels in North America, Hannover House, Inc. has direct distribution relationships for all major theatre circuits, principal media outlets, and wholesale access to major home video retailers and mass merchants. Hannover House has released more than 50 films to theatres and more than 300 titles to the Home Video Market in the United States, including titles such as “Grand Champion” (with Bruce Willis, Julia Roberts and George Strait) and director Joel Schumacher’s teen angst thriller “Twelve” (starring Curtis “50-Cent” Jackson, Emma Roberts, Ellen Barkin and Chase Crawford). Hannover House has also been active in the production and financing of several feature productions including “Toys in the Attic” (with Forest Whitaker, Joan Cusack, Vivian Schilling and Cary Elwes) and “Bonobos: Back to the Wild” (with Luke Evans and Rebecca Hall). A Crimson Forest and Hannover House merger is expected to fill the demand from independent and international productions, which seek distributors that have direct access to theatrical, as well as Home Video and VOD & Digital sales.
“There is a growing need for specialty independent distributors” said Jonathan Lim, CEO of Crimson Forest Entertainment. “There is a lot of quality product out there that is being ignored and we are excited that Hannover House has partnered with us in releasing these films. It will bring much needed diversity to audiences in North America, and growing commercial success for the combined company,” he concluded.
“We have been working closely with Crimson Forest for the past year and have completed the successful release of several of their titles” said Eric Parkinson, CEO of Hannover House. “As we began to move forward together on other projects – ‘Where’s The Dragon’, ‘Mother Goose’, ‘The Final Minute’ and ‘Warriors of the Time Matrix’ – both Jonathan Lim and I recognized the synergy and value that each of our companies provides to the other. To say that we’re excited about what these new opportunities and corporate structure will bring to Hannover House and our shareholders is an understatement,” said Parkinson. “We’re very excited about our merger agreement, and by the upcoming titles that we will be announcing and releasing in the upcoming weeks, which we fully anticipate will have a substantial impact on the growth of our combined company. Crimson Forest has assembled substantial new financing that will be used for a slate of exciting theatrical-caliber feature film productions, general operations and releasing costs, as well as a prompt restoral of current status for the combined company’s public filings.”
One of the first new titles to be released under the combined Crimson Forest – Hannover House structure is the $20-million dollar action thriller feature “ SHOCKWAVE” starring Andy Lau and Jiang Wu. The film will be co-released together with CMC Pictures in North America.
In addition, “WHERE’S THE DRAGON?” Written and directed by VFX veteran Sing Choong Foo (“Spider-Man,” “Beowulf”), follows the journey of a young girl who must join forces with the animals of the Chinese zodiac to find a dragon who has gone missing. This enchanting, epic-scale animated feature will enjoy a national USA theatrical release this summer before reaching the home video, V.O.D. and television markets.
Also releasing in the next few weeks will be “WARRIORS OF THE TIME MATRIX” - Action superstar Tiger Chen, star of “Man of Taichi” returns to screen in this sci-fi / time-travel / martial arts extravaganza, financed, produced and distributed by Internet giant IQIYI (often referred to as the “Netflix of China”) and the Chinese Movie Channel . Originally titled “Kung Fu Travelers,” the film is expected to have a strong cross-over appeal to mainstream USA audiences (Mandarin with English subtitles).
Under the newly merged company, the board of directors will be comprised as follows: Jonathan Lim (Chairman), Eric Parkinson (CEO), Fred Shefte (President) and Tom Sims (V.P. Sales). The existing offices for Hannover House, Inc. and its affiliate Medallion Releasing, Inc. in Fayetteville, Arkansas will remain as the primary distribution operations office. The Los Angeles offices for Crimson Forest will serve as the company’s corporate and production headquarters, and the Crimson Forest office in Shanghai, China, will continue to operate as the finance office for the funding of new productions and releasing costs. Crimson Forest is also negotiating for the acquisition of other, complementary media companies to add to the enhanced distribution entity.
An application for merger approval has been filed with FINRA (Financial Industries Regulatory Agency), with a targeted effective date of combined operations set for May 1, 2017, with regulatory approvals expected shortly thereafter. Stock in the combined company will be fully registered and fully current status, with a new stock trading ticker symbol under Crimson Forest Entertainment Group, Inc. anticipated. Current shareholders of Hannover House, Inc. will receive shares in the newly rebranded Crimson Forest shares, and the redemption formula anticipates a premium value for existing Hannover House shareholders (subject to regulatory approvals). Included in the corporate merger are Hannover House affiliates, Medallion Releasing, Inc. and Bookworks, Inc., respectively handling theatrical and publishing ventures. The merger was approved by a direct outreach to principal shareholders representing an overwhelming majority of shares and voting authority for both Crimson Forest Entertainment Group, Inc. and Hannover House, Inc.
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About Crimson Forest Entertainment
Crimson Forest Entertainment is a feature film production company, as well as a theatrical and home entertainment distribution label that specializes in bringing top content in film & television. Crimson Forest Entertainment’s titles can be seen across a variety of platforms, including theatrical, digital, subscription and cable VOD, packaged media and broadcast television. Crimson Forest Entertainment’s corporate headquarters is in Los Angeles with offices in Shanghai, China.
About Hannover House
Hannover House is a full-service media company, specializing in the production and distribution of feature films for theatres, home video and the Video-On-Demand formats for the North American retail marketplace. Formed in 1993, Hannover House concentrated its activities exclusively in the literary, book-publishing industries until 2003 when the company entered into the DVD marketplace. The company is one of only twelve full-service film distributors in the USA. Hannover House added DVD products to its book publishing label in 2002, and has since released over 350 titles to home video, and 50 titles to theatres. Current theatrical releases include the epic World War II drama, “Chosen” (starring Harvey Keitel); the Chinese action-adventure “Extraordinary Mission” and the American-Bollywood-Style romantic comedy “Spices of Liberty.” Principal USA retail customers carrying Hannover House video releases include Walmart Stores, Inc., Best Buy, Target, Redbox and Netflix. Theatrical exhibitors supporting current and past Hannover House and Medallion Releasing theatrical titles include (listed alphabetically): AMC-Carmike, Cinemark, Cineplex-Odeon, Harkins, Malco, Marcus, National Amusements and Regal Entertainment Group.
SAFE HARBOR STATEMENT
This press release may contain certain forward-looking statements within the meaning of Sections 27A & 21E of the amended Securities and Exchange Acts of 1933-34, which are intended to be covered by the safe harbors created thereby. Although the companies believe that the assumptions underlying the forward-looking statements contained herein are reasonable, there can be no assurance that these statements included in this press release will prove accurate.
For more information, contact MARYEVELYN JONES, Hannover House, Inc. / Medallion Releasing, Inc., 479-521-5774 ME@HannoverHouse.com
