Greetings HHSE Friends & Shareholders - There has been some trepidation in the past few days as the maturation date of our Form 10 Registration is approaching (May 11), and HHSE has yet to make a public commentary or blog regarding the ongoing Hannover's revisions from S.E.C. Comments.
Here's some information that we can share with all of you:
1). 2014 Financials - added to the 2012 and 2013 filings. The S.E.C. said that our financials in the Form 10 needed to not be older than 135 days aged from the filing deadlines, and thus the need for the 2014 numbers to be added to our registration filing.
2). Auditor Notification - The audits for 2012 and 2013 were completed under an agreement between HHSE and Terry L. Johnson, CPA. The company only hired Johnson for those two specific years, and we stated at our shareholder's meeting that the plan for future periods was to utilize one of the larger auditing firms (now that a historic basis for prior years had been established). The company is also using one of the top Library Valuation firms for a revisit of the company's film & television library. The company will complete each of the S.E.C. comments to the Form 10 in time, and will submit the revisions and responses in the next few days. With respect to the 2014 numbers, these are being auditing by the new auditing firm (already underway and only a couple of days from completion). As a company in "pending registration status" (after filing but before ratification), the change of auditors does not require a Form 8 notification, but will be clearly shown in the revised Form 10 responses. The representative from the S.E.C. that HHSE has been working with assures us that the May 11 date will not be "reset" from acceptance, provided that HHSE responds to all comments sufficiently. Once HHSE is formally accepted as a fully reporting company, a change in auditors would require a Form 8 filing. However, until May 11, the Company is not subject to such requirements.
3). Litigation - Two legal actions against the company were served to HHSE in the last 24-hours. TCA Global Master Fund filed a lawsuit in an attempt to pressure HHSE into accepting what management deems to be a very undesirable "debt-conversion structure" for the retirement of their balance. HHSE has a much better plan, and has arranged for funds that will be tendered to TCA prior to the required response date of their lawsuit. We know our solution is better for shareholders, and we believe that TCA will likely agree. Separately, a lawsuit by the landlord of the office properties was served yesterday, and a resolution has already been structured.
As stated in our Form 10, there are no other active lawsuits, and the above two matters are (or have been) managed as part of the ordinary course of business. The aggressive "Tribune" action in early March was resolved with cash payments. Payments for other adjudicated matters (such as Interstar and Bedrock) have been on hold during the past few months (primarily due to the short-term "negative cash flow cycle" caused by having huge product sales that take months to collect on). Every once in awhile, a creditor grows impatient, then files something or takes some collections actions. In every situation for the past five years, HHSE managers have "managed" such events, and while doing so, the company has successfully reduced our 2010 debts (almost entirely related to the painful acquisition of "TWELVE") by $2.7-million dollars. You have to sell a LOT of DVD's to clear $2.7-million for debt service, and still grow the library, expand the ventures, and move the company forward. It hasn't been easy, and hasn't always been pretty, but the HHSE managers are a dedicated team that have gotten the job done.
4). New Activities & I.R. - Over the next few days (and more specifically, over the next few weeks and months) shareholders will start to see some impressive news and corresponding trading activities. There has been some outreach by HHSE management to a larger group of media investors and industry followers, and there is a good chance that the trading volume in HHSE will continue to trend upwards (as evidenced by the initial buy-ins that started on Monday). Next week, HHSE will make a formal announcement of the engagement of a top I.R. Advisory Firm, the caliber of which has us very, very excited. These media experts know the industry, and know the true-trajectory that HHSE is following... a path towards being the next Lionsgate with our core business, and the "indie Netflix" with our VODWIZ venture.
There will be separate Blogs and announcements over the next few days (including our soft-launch to consumers this weekend of VODWIZ as we add 50+ titles each week and build the total gross-ratings points / impressions in proportion with the title listings growth over the coming months).
WATCH WHAT HAPPENS>>>>!!!