Good Morning HHSE Friends - Here's a quick recap of some Corporate Housekeeping issues of interest to shareholders.
1). NEW AUDITOR & 2014 REPORT - As most of you may have already heard, the auditor hired by HHSE to perform the 2012 and 2013 audits (Terry L. Johnson) had his authority to sign-off on future public company audits revoked in mid-April. HHSE was informed of this development by Mr. Johnson on April 28, when we contacted him for a status on our 2014 report. Needless to say, this was distressing and unexpected news, and required immediate action on our part. A new auditing firm (fully licensed and approved), was engaged, and the materials previously provided to Terry L. Johnson over the prior months (four large boxes of sales and payables detail and other audit materials) have been forwarded. Unfortunately, under PCAOB standards, the previously completed verifications are required to be performed yet again by the new auditor, and the expeditious completion of this task has challenged our prior internal schedule to have the 2014 numbers in hand by now.
2). OTC "LIMITED INFORMATION" STATUS TO BE RESTORED - As a result of not being able to file the 2014 audit report by yesterday, the OTC Pinksheets status for HHSE was temporarily lowered to "Limited Information." This will be restored in the next day or two as the company will provide the Attorney's Letter for OTC Markets compliance, rather than waiting any more days for the audit report to be delivered. Maintaining "Fully Current" reporting status is important to our shareholders, and will be maintained while the issues of the new auditor and revised Form 10 are addressed.
3). FORM 10 STATUS - A call is scheduled for Friday with the S.E.C. to discuss the revisions to the HHSE Form 10 filing, including the change of auditors. A blog update will be posted after that discussion is completed.
4). LAS VEGAS MONEY SHOW - We're pleased and honored to report that Hannover House will be a featured company at the "MONEY SHOW" in Las Vegas next week. Over 10,000 attendees - many of whom represent deep pocketed, long hold investors - will be present. An update will be posted on the morning of May 12, the first day of this three-day investor conference!
5). CIVIL LITIGATION - HHSE has verified the actual identities of five of the individuals that have posted knowingly false and damaging attacks against the company and it's managers on IHUB. HHSE is also working with the FBI and the US Attorney's office in their investigation of trading activities that occur in concert with the periodic elevation of attack posts. We have been advised to not publicly disclose any greater detail at this time.
COMMENTARY FROM HHSE - Filing the FORM 10 was a very big deal for the Company, and getting through the audits with Terry Johnson was no walk in the park. HHSE hired Terry Johnson on Sept. 18, 2014 and it took months to complete the 2012 and 2013 audits. In retrospect, had we known that the Form 10 would not be ready to file (due to audits) until March 11, 2014 - we obviously would have included 2014 in our plans. However, waiting for the 2014 numbers would have slowed down the timing of the filing, and waiting was not a desirable strategy for many of our shareholders.
HHSE is committed to completing this process and fully complying with all filing requirements as set forth by the S.E.C. and the applicable rules and regulations.
Meanwhile, we continue to make progress with our core releasing activities (DVD and Bluray shipments - and MEDALLION STUDIOS vendor partners), as well as the quiet launch of VODWIZ and the roll out of summer theatrical releases. While the auditor issue was an unexpected bump-in-the-road, it's clearly not more than a quickly resolved issue as HHSE forges ahead at ever increasing speed. We believe that the sum total of all our positive developments will manifest soon in the marketplace.