Replies to post #34420 on Hannover House Inc (HHSE)

[MoneyMan]

This will help.


20 How much capital does Hannover currently have at its disposal to complete future negative pickups? What sources of future financing are contemplated?

Answer: We're not doing "negative pick-up" deals. I do remember that term from the 1980's however, back when production ventures were not sophisticated in structure. Most of the deals Hannover / TDGI has closed (or are pursuing) are for the North American rights to already produced / completed features. This is a far safer business model than investing in scripts and hoping-to-hell that the movies turn out to be watchable / releasable. Our financing sources for acquisitions include cash flow from current and upcoming releases, and the ongoing availability of off-balance-sheet private investors for specific title acquisitions. For instance, we had a private investor group supporting a Hannover TDGI bid of $17-million for the franchise rights to "TERMINATOR" (we did not win this bid, as Pacificor prevailed at $29.5-million!). If we had tried to raise $17-million through a TDGI stock venture at $.03 per share, that would have required the issuance of about 566-MILLION shares of stock, effectively doubling our total shares. Not a great idea. I do think it's exciting that Hannover / TDGI is being invited into such high profile opportunities as the "TERMINATOR" franchise, and that we have significant off-balance sheet sources available for big ventures.

21 How does Hannover finance its P&A?

Answer: Already answered, but for clarity, I'll cover the film "TWELVE." Of the $2.2-million being spent on "TWELVE," approx. $1-mm is from cash (mostly from the stock venture) and about $1.2-mm is from vendor credit lines (with the broadcast agency, the newspapers and the labs). As we collect the revenues from "TWELVE," we'll use receipts to pay off (and "replenish") our vendor credit lines, and we'll recycle the $1-mm or so in cash expenditures into future releases. Basically, we'll keep rebooting the same $2-mm to $2.5-mm every six to eight weeks. If we need more funds, then we have the option of investing some of our distribution fee income, or accessing off-balance sheet private participant funds.

[speckulater]

TDGI Off-Balance Sheet Financing Discussed


TDGI has already discussed this in their March 19, 2010 Filing at Pinksheets.


BOARD AGENDA ITEM “A” – Approval of Off-Balance Sheet Financing Opportunities –
The Board reviewed the proposal set forth by C.E.O. Eric Parkinson regarding the financing for the acquisition and release of major, theatrical-caliber titles, including director Joel Schumacher’s drama, “TWELVE.” Under the Parkinson plan for “TWELVE”, the financing required to pay for the film’s license fee advance (USD $1.75-mm) and for the film’s Prints & Advertising / theatrical releasing costs (approximately USD $2-mm) would be funded through a combination of private investor funds, supplier credit terms, pre-paid advertising and internal corporate cash resources, and would not require an issuance of company stock or equity. The private investor funding portion would be repaid with a priority recoupment position from incoming revenues of “TWELVE” and an ongoing participation in the company’s applicable distribution fees for that specific title, but that the venture would not be structured as a corporate debt obligation. As such, the private funding venture for “TWELVE” would not hold recourse against the company other than against the rights granted in and to that specific title. Additional funding opportunities were discussed covering supplier credit proposals from three media placement agencies and from two major film laboratories, which would be supplemented with cash flow from the company’s operations to collectively fully fund theatrical releasing expenditures. The Board voted to approve this plan for the financing of the acquisition and release of “TWELVE” and to use this funding structure for the company’s pursuit of additional, high-profile features.

http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=30013

Other Pinksheet CEO's would simply dilute their stock. This is why we benefit from having a CEO with NASDAQ experience. We have the several million dollars needed to begin Theatrical Release Operations AND our share count has not changed since the Company was formed in December 2009.



TDGI


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