Good Morning HHSE Friends & Shareholders - As predicted back in November, the cumulative benefit of handling a record number of new release titles for DVD, BluRay and Video-On-Demand has already generated a record sales result. Core sales for Q1 2015 (physical video and V.O.D.) increased to $1,264,337 compared to $346,639 for the same quarter in 2014. Overall revenues for Q1 2015 were impressive at $1,732,208 - and even after adjustments for potential video returns (unsold merchandise from mass merchants), the revenues remained on record pace at $1,397,997.
Cost of sales and operations increased in Q1-2015 as compared to 2014 - due to a larger staff and salaries, as well as due to new accounting procedures for larger hold backs on accrued royalties and deferred income taxes. However, HHSE management feels that the substantial increases in both revenues and bottom line results justifies the modest increase in overhead and operating costs.
Key video titles in Q1 were AMERICAN JUSTICE, GABRIELLE, ASALTO AL CINE and GRAND CHAMPION, Other items and sources adding significantly to revenues included sales contracts for THE SUMMONING, several video-on-demand agreements with Netflix and ongoing revenues from 20th Century Fox Home Video for TWELVE.
Below are the summary charts for G&A and the Income Statement for Q1, 2015 - with comparison columns for the same reporting quarter in 2014. The complete financials for Q1, 2015 are included in the company's 10Q report, which will be released later this week onto both the OTC Markets site, as well as through the S.E.C. Edgar site.
Upcoming activities scheduled for HHSE this week and next week include:
* Filing of 10Q Report; Filing of Atty's Letter (to restore OTC Current Status);
* Re-Submission of Form 10-12(g) with new auditor's report and compliance;
* Cannes Film Festival Announcements / Acquisitions & Alliances;
* Investor Awareness Campaign - including HHSE as a Featured Company at the Money Show;
* VODWIZ Technical Tweaking, New Title Additions and expansion of consumer outreach;
* New Product Shipments for JUNE & JULY street dates;
* New Staff Additions (VODWIZ and Theatrical Services);
HHSE Managers are grateful and thankful for our many loyal, and long-standing shareholders, who have stayed with the company during the rough growth periods, and remained strong against the three-ring circus of anti-HHSE flippers. The company set a goal to be a successful and growing player in the entertainment & media industries, and HHSE is clearly delivering. These next few days, weeks and months are shaping up to be major turning points for HHSE. If the wise and proven stock prognosticators are correct, the volume and PPS for HHSE could each see new highs.
But there is a challenge. An increase in daily trading volume of the HHSE may be what's required to break past the $.02 barrier that some "flippers" would like to impose as a ceiling. The strategy of these "Rinse-and-Repeat" manipulators is to try to box the stock from not breaking back to it's book value ($.08 to $.12 according to several media industry experts). Why? Because at $.02, the PPS is easier to jam down to $.01 through relentless blabber on chat boards, which sometimes can demoralize legitimate shareholders into selling at artificially lowered prices. Then, boom, magically the flippers "shut the f**k up" for a few days and allow the stock to bounce back up. "Rinse-and-Repeat" is the phrase that the primary manipulator has used on one of the more popular chat boards to describe their coordinated and illegal scheme.
If HHSE were trading over $.04, it would be very difficult for the flippers to impact the stock with their modest purchasing abilities. So while HHSE now has a Civil Lawsuit drafted for Federal Court - and the FBI and US Attorney's office have a Criminal action against the flippers in motion - one very wise HHSE long had some interesting advice to share: >>>
He said: "The best way to hurt them immediately is to do the opposite of what they say. If they are screaming 'the sky is falling' yet again, then that means BUY NOW, BUY LARGE. If they say 'sell, sell, sell' that means HOLD OR ACCUMULATE. Think of every day as 'opposite day' when reading the clown squad's IHUB posts."
Regarding the HHSE lawsuit, the update is that the US Attorney's office reviewed our complaint and responded this past Thursday with comments and a check list for HHSE to handle. The actual identities of all but one of the chat-room clowns has been verified, and HHSE has hired a private investigator in Malibu to track down locally there the identity of this last party in the civil lawsuit. Unfortunately, HHSE cannot access the FBI's investigation results for the filing of our Civil lawsuit. But we have been providing them with all of the materials and evidence off various chat boards, from the many Private Messages that have been provided to us, and from emails that some of them (!!) have sent directly to HHSE management - apparently, oblivious to HHSE's voluntary decision to provide access for all company emails to the FBI Investigations team. HHSE will comply with the US Attorney's comments, and then we will authorize the filing of the Civil lawsuit in Federal Court in Arkansas. That's another (potentially) major development for HHSE over the next couple of weeks...
Meanwhile - Q1 Results are EXCITING and proof that the new MEDALLION RELEASING, Multi-Studio Venture under Tom Sims is a successful new component of HHSE's Growth and Emergence as a Major Independent Studio! Go HHSE!