Hannover House Inc (HHSE)

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Blog 17 July 2021:

Market responds to Real-World Success of HHSE / MyFlix - sending Shorts into Meltdown

http://hannoverhousemovies.blogspot.com/2021/07/market-responds-to-real-world-success.html?m=1

Greetings HHSE Friends & Followers - Friday, July 16, 2021 was an eventful day for Hannover House and MyFlix as we announced the closing of L.O.I.'s for the funding of $20-mm for the company's first-ever "A" level production, "MELTDOWN." As disclosed in prior blogs, there is almost two-years of production company overhead that is earmarked for HHSE / MyFlix included within this production venture. So, this major film solves the company's operational needs, solves the "locomotive title" needs and elevates the enthusiasm point for MyFlix consumers, suppliers and HHSE shareholders. Big Stuff - and not surprisingly, the market responded with over 32-mm HHSE shares traded yesterday, pushing up the stock by over 30% on trade dollar volume of more than $800,000.

But not everyone is celebrating. The vocal HHSE short-sellers are in their own "meltdown" mode right now, desperately scrambling to stop the company's momentum with their 10-year-old, and always false "sky is falling" narrative. The current focus of their attacks is the ongoing actions to unwind the Lewin (New York) default judgment. HHSE's first filing to re-open the case in New York was denied yesterday, but that simply triggers the appeal to the higher court (which appeal is being filed on Monday). As previously disclosed, there was no agreement by HHSE with Lewin, no obligation to repay for his P&A that he voluntarily provided to support his own movie, and no personal guarantees on this (or ANY) HHSE agreement by the officers.

The HHSE response to the lawsuit in 2018 were "struck" as a sanction by the court due to non-delivery of Discovery materials. Why didn't HHSE deliver the discovery materials? We have provided medical and physician documentary evidence that Fred Shefte was hospitalized at that time (for a total of 18-weeks), and that he was the only point of communication to our prior counsel in New York (Michael Drobenare). Normally, the court sanction for late or non-delivery of discovery documents is a modest monetary fine, such as $2,500 to $5,000. But in this instance, the NY Judge took a rather draconian step to "strike" the defendant's answers, which set-the company up for a default judgment. In subsequent hearings after the default (to which HHSE was not a party in attendance) Plaintiff's invented a debt amount ($1.3-mm) and further falsified to the court that Parkinson and Shefte issued personal guarantees. HHSE's new counsel pointed out that no legitimate business deal for $1.3-mm proceeds without any form of agreement... and that accepting Plaintiff's verbal representation without any written back-up is an injustice worthy of appeal.

Contrary to the lies that the short-sellers are currently posting to stock chat boards, Lewin (Plaintiff) does NOT own any HHSE stock shares, and cannot ever under securities laws demand that shares in HHSE be issued. As a good faith gesture to the local Arkansas courts, HHSE agreed to release two stock certificates NOT in HHSE, but for HHSE subsidiaries, specifically: a certificate for 1,000 shares (out of 1-mm authorized) for Medallion Releasing, Inc. and another certificate for 1,000 shares (out of 1-mm authorized) for Vodwiz, Inc. The owner of both of those stock certificates is Hannover House, Inc. These subsidiary stock certificates were issued in good-faith to the court, but not as a transfer of ownership. Additionally, HHSE paid into the Arkansas court a good-faith payment of $2,500 to interplead until after the New York case is resolved (the filing of the appeal Monday keeps the NY case open). Under securities laws - even if HHSE decided to settle with Lewin - the MOST Lewin would be allowed to receive in HHSE stock would be for shares in the amount that he actually paid to HHSE as our booking fees on his film (plus interest). The amounts that he paid directly to outside vendors on behalf of his production company, East Side Story Films, LLC, are not eligible as those funds were not paid to HHSE and would not meet the evidentiary requirements to support a stock issuance under S.E.C. rules. HHSE (or any OTC issuer) cannot just randomly issue shares unless the transaction meets the rules of consideration requirements.

Anyway, there's good evidence that the shorts are being squeezed, so HHSE shareholders can anticipate louder screams as the rising value of the company's stock brings them increasing pain. We view their increasing desperation as further proof that we are on the right track.

A separate blog will be released in the next few days about "MELTDOWN" and what the financing L.O.I.s mean for the pre-production activities, casting and HHSE / MyFlix. Very exciting times, and a fantastic outcome from a solid presence at the Cannes Film Festival / Marche du Filme. Good times!

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Except for the Friday news on "MELTDOWN", the PRIOR press coverage at Cannes last week was focused primarily on "WILDFIRE" and the presence of two of our lovely stars (photos below).

HHSE