Hannover House (HHSE) 10-Q13 Nov 202020 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2020shares
Cover [Abstract]
Entity Registrant Name	Hannover House, Inc.
Entity Central Index Key	0001069680
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	732,642,844
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)		Sep. 30, 2020	Jun. 30, 2020
CURRENT ASSETS
Cash & Cash Equivalents		$ 403	$ 1,028
Accounts Receivable, Net	[1]	397,403	336,903
Prepaid Wages
Merchandise Inventory		100,704	100,704
Prepaid Advertising		765,000	765,000
Prepaid Producer Royalties		2,454,674	2,454,674
Producer Marketing Recoupment		3,016,762	3,016,762
Film Distribution Rights		1,996,379	1,996,379
Film Production Investments		469,389	469,389
Notes Receivable and Net Recoupment	[2]	41,641	41,641
TOTAL CURRENT ASSETS		9,242,355	9,182,480
PROPERTY & EQUIPMENT
Less Accumulated Depreciation
TOTAL PROPERTY & EQUIPMENT		117,561	117,561
OTHER ASSETS
TOTAL OTHER ASSETS		27,413,517	27,413,517
TOTAL ASSETS		36,773,433	36,713,558
CURRENT LIABILITIES
Accounts payable		19,365	19,365
Accrued Royalties		94,065	94,065
Acquisition Advances Due		285,399	285,399
Accrued Wages		122,182	122,182
Payroll Taxes Payable
Deferred Income Tax Payable
NB Cal AFIL P&A Loan
TOTAL CURRENT LIABILITIES		1,294,039	1,266,824
LONG-TERM LIABILITIES
Long-Term Payables		1,024,382	1,027,382
Executive Salary Deferrals		766,415	766,415
Lewin Foreign Judgment	[3]	1,629,442	1,629,442
Contingent Legal Liabilities	[4]	727,022	727,022
Officer Notes Payable		115,670	115,670
TOTAL LONG-TERM LIABILITIES		4,262,931	4,265,931
TOTAL OF ALL LIABILITIES		5,556,970	5,532,755
SHAREHOLDER'S EQUITY
Common Stock		27,115,128	27,272,077
Retained Earnings		4,101,335	3,908,726	[5]
TOTAL SHAREHOLDER'S EQUITY		31,216,463	31,180,803
LIABILITIES & SHAREHOLDER'S EQUITY		36,773,433	36,713,558
Hounddog P&A Note (EFG) [Member]
CURRENT LIABILITIES
Notes payable
Interest
Shuttlewood Investments Note [Member]
CURRENT LIABILITIES
Notes payable	[6]
Interest
Graham Financial Services Note [Member]
CURRENT LIABILITIES
Notes payable		98,825	98,825
Interest		6,603	4,102
All Other Notes Payable [Member]
CURRENT LIABILITIES
Notes payable		590,684	576,685
Interest		61,916	51,201
Bank of Fayetteville Note [Member]
CURRENT LIABILITIES
Notes payable		15,000	15,000
Interest
FILM & TV LIBRARY (incl. VODWIZ) [Member]
OTHER ASSETS
TOTAL OTHER ASSETS		27,413,517	27,413,517
Office Furnishings, Equip. & Film Gear [Member]
PROPERTY & EQUIPMENT
Less Accumulated Depreciation		(37,164)	(37,164)
TOTAL PROPERTY & EQUIPMENT		154,725	154,725
Vehicles [Member]
PROPERTY & EQUIPMENT
Less Accumulated Depreciation
TOTAL PROPERTY & EQUIPMENT
Real Property [Member]
PROPERTY & EQUIPMENT
Less Accumulated Depreciation
TOTAL PROPERTY & EQUIPMENT

[1]	Accounts Receivable has been adjusted to include newly invoiced on-boarding & metadata services performed for MyFlix program suppliers.
[2]	Notes Receivable includes a loan made by the company to Snowy Morning, Inc. in the amount of $41,641 to assist with production costs for the film "WILDFIRE,"which loan is to be considered as a fully-recoupable advance against Snowy Morning's share of theatrical revenues in the film. Company holds a lien against other revenue sources, in the event that the producer's share of net theatrical revenues from "WILDFIRE" is not sufficient to fully repay the loan.
[3]	Company has engaged counsel to move to set-aside this foreign judgment and locally filed writ, on the basis of fraud, personal jurisdiction and subject matter jurisdiction. The absence of an agreement between Company and Lewin, as well as the additional prohibition on HHSE officers from issuing "personal guarantees" as represented by Plaintiff Lewin, will support the motion for dismissal. These legal responses from Hannover House are temporarily on hold until the local courthouse reopens from COVID-19 closures.
[4]	Upon advice of counsel, Company is also reserving an additional amount of $727,722 regarding three foreign cases, as the potential liability that could occur should the Company not prevail in actions for dismissal or adjudication in Arkansas.
[5]	Q2 Retained Earnings reduced Sept. 2020, due to payables corrections
[6]	The company's Film & Video Library has not had a current review in almost ten years; during that timeframe, the retail DVD business has dramatically decreased, whereas "digital streaming" of entertainment products has markedly increased. It has been HHSE management's position that the loss of forecasted DVD sales has been equally offset (in "net income") from the value of the digital streaming increases and the lowered cost to achieve net income with digital streaming. During October and November of 2020, Company is embarking on its first effort to secure Domestic (North American) Television licenses for key titles in the Hannover House library - including high profile films such as "Twelve", "Bonobos" and "Toys in the Attic." The pursuit of these television sales is in support of the company's endeavor - planned for January 2021 - to have a new and complete Film and Television Library Valuation Report - which analyzes and forecasts likely and obtainable revenues from approx. 475 titles represented by Hannover House / Medallion - including updated values for DVD and BluRay, Digital Streaming, International Licensing and Domestic Television.

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	6 Months Ended	9 Months Ended
Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2020	Sep. 30, 2020
Balance due under the agreement amount	$ 0	$ 0
Reserving additional amount	727,722	727,722
Snowy Morning, Inc [Member]
Notes Receivable	$ 41,641	$ 41,641

Consolidated Statement of Incom

Consolidated Statement of Income - USD ($)	3 Months Ended
Consolidated Statement of Income - USD ($)	Sep. 30, 2020		Jun. 30, 2020		Mar. 31, 2020
Income Statement [Abstract]
REVENUES (all media, fees & licenses)	$ 209,132		$ 75,319		$ 90,541
Net, Collected Revenues	148,632		14,919		3,769
Additional Invoiced Sales	60,500				86,772
Reserve for Potential Returns
ADJUSTED REVENUES FOR PERIOD	209,132		75,319		90,541
COST OF SALES
Commissions
Sales and Marketing
Video Mfg & Releasing Costs
Film & Book Royalties
Freight
Other Expenses (Ads, PR, Publicity)
TOTAL COST OF SALES
GROSS PROFIT	209,132		75,319		90,541
GENERAL AND ADMINISTRATIVE EXP.	8,922		9,848		40,642
INCOME FROM OPERATIONS	200,210		65,471		49,899
INTEREST EXPENSES	7,601		7,601		7,502
OTHER EXPENSES (SALARY DEFERRALS)
INCOME BEFORE TAXES	192,609		57,870		42,397
PROVISION FOR INCOME TAXES
NET INCOME	192,609		57,870		42,397
RETAINED EARNINGS (Beginning of Period)	3,908,726	[1]	3,906,597		3,864,200
RETAINED EARNINGS (End of Period)	$ 4,101,335		$ 3,908,726	[1]	$ 3,906,597

[1]	Q2 Retained Earnings reduced Sept. 2020, due to payables corrections

Consolidated Statement of Cash

Consolidated Statement of Cash Flow - USD ($)	3 Months Ended
Consolidated Statement of Cash Flow - USD ($)	Sep. 30, 2020	Jun. 30, 2020
Cash flows from operating activities
Net Income	$ 192,609	$ 57,870
Increase in Accounts Receivable	60,500
Decrease in Prepaid Expenses
Decrease in Other Current Assets
Increase in Notes Payable
Increase in Accounts Payable	4,846
Cash Provided By / Used in Operating Activites	257,955
Cash Flow from Investing Activities
Cash Provided By / Used in Investing Activities	(258,580)
Cash Flow from Financing Activities
Cash Provided by Financing Activities
NET INCREASE IN CASH	(625)
BEGINNING CASH BALANCE	1,028
ENDING CASH BALANCE (9-30-2020)	$ 403	$ 1,028

Statement of Shareholders Equit

Statement of Shareholders Equity - 3 months ended Sep. 30, 2020 - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Total
Balance at Jun. 30, 2020	$ 27,272,077	$ 3,908,726	$ 31,180,803
Balance, Shares at Jun. 30, 2020	831,429,996
Net Adjustments to Equity			(156,949)
Net Adjustments to Retained Earnings
Net Income		192,609	192,609
Balance at Sep. 30, 2020	$ 26,518,209	$ 3,964,467	$ 31,216,463
Balance, Shares at Sep. 30, 2020	831,429,996

General and Aministrative Expen

General and Aministrative Expenses	3 Months Ended
General and Aministrative Expenses	Sep. 30, 2020USD ($)
Income Statement [Abstract]
Auto
Bank Charges	210
Consulting
Employees and Officers
Entertainment
Equipment
Fees
Insurance
Labor
Legal and Accounting	1,500
Misc / Marketing & Promotions
Office	186
Rent	6,150
Payroll Taxes
Telephone	876
Travel
Utilities
TOTAL OF GENERAL AND ADMINISTRATIVE EXPENSES	$ 8,922