Over the past forty-four months, Hannover House, Inc., (OTC: HHSE) has reduced its total debt load from $6.4-million down to $2.7-million as the company prepares for the launch of its new business plan of the MyFlix streaming and to facilitate the production of high-profile feature films.
The debt reductions were the result of payments and negotiated reductions, primarily from "default judgments" incurred in 2016-2018 under a flawed- legal strategy pursued at that time by company management. Out of state actions filed by producers were ignored and allowed to go to default under the belief that the contract requirement for disputes to be filed in Arkansas would negate the foreign state defaults. This strategy - devised by former HHSE President and attorney Fred Shefte - ultimately proved flawed, and resulted in the company being burdened with millions of dollars in out-of-state defaults, all from cases lacking the factual basis for such claims.
Shefte took a medical leave of absence from the company in the summer of 2018, and never fully recovered or returned to Hannover House until his formal resignation in 2021 and his unfortunate death in April of 2022. The company has had no new lawsuits in over four years as the business model of handling theatrical and video release of third-party-owned productions was discontinued.
"The rapid collapse of the DVD market caught many distributors by surprise," said Hannover CEO Eric Parkinson. "As Video-On-Demand options exploded in popularity, the consumer willingness to spend five or ten dollars to buy a DVD of an independent movie collapsed. DVDs were no longer a good entertainment option, when the same ten dollars could buy a whole month of access to various streaming sites. However, some of the program suppliers to Hannover House filed lawsuits seeking payment for DVDs that were shipped to retailers, but returned unsold for credit. The Hannover agreements were clear in that royalties only applied to net unit sales, not gross shipments. So, these various lawsuits were without contractual merit. Yet, failing to file a response for dismissal even when the cases were filed in the wrong venue created a painful debt burden for the company to carry default judgment balances which could have been avoided. We are grateful for the support of the company creditors and judgment holders in structuring fair and reasonable resolutions to these matters, and enabling our balance sheet to be markedly improved," Parkinson concluded. During the past 44-months, the company secured $763,910 in new debt, of which approximately $261,937 was reinvested into film productions, including WILDFIRE and THE LAST DAYS OF BELLE STARR. These production investments are readily recoupable to Hannover House from contractual sales deliveries.
"Through the support of new lenders, the company has been able to make significant progress in the creation of valuable production assets, the preparation of MyFlilx services and the reduction of our debt burden," said Parkinson. "Their support and confidence will soon be rewarded."
Hannover House was founded in 1993 and has survived through tumultuous market changes impacting the independent film industry, by controlling overhead, anticipating trends and evolving to address opportunities as they arise.
Greetings HHSE Friends & Followers - We cannot stress how material and monumental the news of today is: that we are going to be the FIRST production company to make a fully CGI - Artificial Intelligence generated animated feature with JOURNEY TO UTOPIA.
For decades, Disney, Pixar, Fox and Universal / Amblin have controlled the $400+BILLION annual world animation market - due to the obstacles of the HUGE production costs and multi-year schedules that animated features have traditionally required. That all goes away with the advent of Ultra-HD quality AI generated animation, following top-shelf character designs, scene structures and built atop a solid script with Academy Award level voice actors.
Suddenly, a (currently) small company like Hannover House (and our new INTELIMATION AI division) can produce a film that looks and feels comparable to the top studio releases.
But we can do it for $4-million and finish it in less than 8-months. Best of all, the production costs are fully covered by production incentives, bank gap credit and private investors... so HHSE does not have to struggle to find capital or dilute the company's share structure with stock issuances.
This is a seminal moment in the company, and one that will be further enhanced by our uplist filings and the MyFlix division.
Get ready, friends. It's going to be an exciting ride!
Hannover House forms InteliMation AI for first major A.I. Animated Feature Production
JOURNEY TO UTOPIA to begin production in December with A-List Voice & Music Talent
Major launch planned for Cannes and Summer (2024) Theatrical Release
New York, NY - InteliMation AI, a newly formed division of indie studio Hannover House, Inc. (OTC: HHSE), has secured a private investment commitment to produce the world’s first fully A.I. and CGI generated feature film, the family appeal fantasy film, “Journey to Utopia.” Featuring a voice talent cast of Academy Award winning actors and box office stars, the film’s visuals will be fully generated using cutting-edge Artificial Intelligence visual rendering, based on producer-supplied scene structure input and character designs.
“We have been trying to produce this film for the past ten years,” said Eric Parkinson, C.E.O. of Hannover House. “But the visual demands of creating the land of Utopia made the production costs prohibitive and financially risky. That has changed now with the new A.I. technology and our improved strategy to make the film animated as opposed to live-action,” he concluded.
“The Artificial Intelligence CGI technology has reached a point where we can create an animated feature that is visually comparable to a $200-million-dollar studio production, but completed for a fraction of the cost and time,” said Parkinson. “From script to theatrical DCP, we can produce a major studio quality animated feature in less than eight months.”
“The technology from InteliMation should herald in a major paradigm shift in entertainment,” said Christian Large, an independent producer and advisor to Hannover House. “High-end animated features will no longer take multiple years and hundreds-of-millions of dollars to produce. This technological breakthrough will enable a broader range of stories to be created and released, which ultimately will help expand the market,” he concluded.
The script for “JOURNEY TO UTOPIA” was written by Mike Snyder (“Wildfire”) based on a story by Eric Parkinson. The production is in negotiations to secure three Academy Award winning actors as voice talent for the film. Shirley MacLaine is pegged for the role of “Mother Goose;” Forest Whitaker is being pursued to portray the principal antagonist, “Valkerna,” and Kim Basinger is being pursued in the role of “Connie Hammonds,” the mother of one of the kids who becomes trapped in the land of Utopia.
Pending receipt of a Screen Actors Guild waiver for the production, recording of voice talent is expected to start in late November. A promo reel is planned for the Cannes 2024 festival with a USA Theatrical launch targeted for July 2024.
The world animation market will generate over $411-billion dollars in 2023, according to Statista Research Department – and is expected to grow to over $580-billion by the year 2030. The A.I. fueled software technology pioneered by Hannover House and InteliMation will revolutionize how animated features and television programming are made.
Hannover House and InteliMation are targeting to complete two animated features in 2024, with three set for 2025 and four features per year beginning in 2026. Hannover House will handle the sales representation of the films worldwide, and will coordinate North American theatrical and ancillary sales campaigns with exhibitors, partner studios and major video-on-demand platforms. Hannover House was formed in 1993 and has found success in a variety of indie film distribution arenas, from DVD and VOD distribution to theatrical exhibition.
The release plans for “Journey To Utopia” will follow a traditional model of a wide USA theatrical launch, followed by Video-On-Demand and physical goods (DVDs / BluRay units).
About Eric Parkinson and Hannover House
Eric Parkinson is an indie film distribution veteran of over thirty-five years, best known for his long reigns as CEO of both Hannover House, Inc. and Hemdale Communications. Parkinson has been directly involved with the release of more than 1,500 feature titles, including notable release campaigns for commercial hits including “Terminator,” “Highlander 2” and Best Picture Oscar winners “Platoon” and “The Last Emperor.” Animated features distributed by Parkinson include three #1 Billboard Magazine Top Selling hits, “Little Nemo: Adventures in Slumberland”, “The Magic Voyage” and “The Princess and the Goblin.” On the production side, Parkinson has over fifty feature film credits as a Producer or Executive Producer, and just completed his directorial debut with “WILDFIRE: The Legend of the Cherokee Ghost Horse,” starring Anne Heche in her final feature release. Hannover House was formed in 1993 as a book publisher, but grew into a top ten Walmart DVD supplier by the mid ‘2000’s with dozens of indie releases populating the popular DVD Budget Bins nationwide. The company expanded into theatrical releases, which were a transitional business model to service the growing Video-On-Demand market. Hannover House stopped representing third-party / indie films in 2018 in favor of a business model that focuses resources on the creation of original, high-profile feature productions.
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