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Friday, October 30, 2015

Unknown Share Issuance

HHSE was just informed (by shareholders) that Stabdard Registrar (the company's current Transfer Agent) has once again - without notice, authorization or basis - issued a ton of HHSE shares to toxic lenders. We are livid and will be taking action.  Standard has not yet responded to our request for clarification and the recipient party. Fred Shefte speculates that it might be shared to JSJ - as they balked at HHSE's offer to pay off notes in cash - as they preferred the toxic conversion formula in order to make a return on investment which violates the usury laws. But we don't yet know - and will update as soon as new information is released to HHSE by Standard Registrar.

Needless to say, in addition to our legal actions against Standard Registrar, we intend to move ASAP to a more reputable Transfer Agent.

Friday, Oct. 30, 2015

Good Morning HHSE Friends, Fans & Followers -- Today is an important day for HHSE in that it marks the first ever "simultaneous" national theatrical release as customarily defined in the industry.  Starting today, the youth-appeal dance feature, "DANCIN' IT'S ON" will appear in theatres in all of the top 65 DMA Markets, and on screens that are within the physical city-limits of 59 of the top 60 largest USA cities.  In fact, the only major market where this film is NOT playing is the San Francisco Peninsula - although there are quite a few theatres in the suburbs and greater metropolitan Bay Area (where our theatre buyers felt were more supportive of "family fare"). 

Why is it important for HHSE to have an industry-defined national theatrical release?  In a word: Netflix.

The license fee for "Subscription Video-On-Demand" from Netflix for Qualifying theatrical films is greater than some recent years of total revenues for HHSE.  The Netflix model shows that films with the level of broad visibility that national theatrical releases deliver, are the titles that Netflix subscribers want to stream - and the demand is not dictated by the film's box office results (in fact, in many cases, films that performed poorly at the box office become even more popular on Netflix under the "meant to see it, but missed it" viewing practice). 

For the past 6-weeks, "DANCIN' IT'S ON" has pretty much sucked all of the air out of the HHSE room.  Parkinson and Shefte have been focused almost solely on the release, and new staffers (and temps) were brought on board to make sure that the mandatory release conditions were achieved.  The HHSE Team expanded from 8 persons to 16 (although, until the next major theatrical - late January - it's likely that this number of staffers will be reduced slightly).

While "DANCIN' IT'S ON" is today's focus - there are many other important issues that Shareholders have requested updates on, including:  status of filing revised Form 10 (and audits), status of prosecution against bashers / stock manipulators and the status of TCA and other toxic loan structures that have (in the past) caused painful share dilutions.  Today, Parkinson is in New York City and Shefte is in Los Angeles (both supervising "opening day" special events, respectively for Black Entertainment Television and M-TV).  Accordingly, these "other" important corporate issues will be addressed on Tuesday in both a Blog posting (and for appropriate items, via a SEC Form 8 filing).  There's also several other issues that longs will find to be very good developments.


When the company first announced the title in late September, we targeted 600 locations, and October 16 as our release date.  This was based upon initial feedback from key theatres, most notably, Regal Entertainment Group, Inc., the nation's largest circuit (with theatres branded under Regal, United Artists and Edwards Cinemas). 

By early September, a new dynamic twist hit the theatrical exhibition marketplace:  Paramount Pictures announced a new strategy to ignore the NATO (National Association of Theatre Owners) mandatory "hold back" window of 89-days from initial theatrical release to home video or Video-On-Demand launch.  The NATO theory is that if consumers can "stream" a film directly to their homes for an amount of money that's comparable to a movie ticket price, that many will choose to stay at home, skip the drive, save the babysitter fee, and make their own popcorn.  NATO sees "short release windows" of Home Video and V.O.D. as a competitive threat to its member theatres.

So this is what Paramount did:  they announced a break on the V.O.D. windows for "Paranormal Activity 5" and "Scouts Guide to the Zombie Apocalypse."  The reaction from major chains was swift and almost unanimously negative.  Certain theatrical circuits, including Regal, Carmike, Cinemark and Marcus all suggested to Hannover House that there could be an opportunity to capture screens for "DANCIN' IT'S ON" from auditorium inventory previously planned for the two Paramount releases (before the release strategy change was announced).  So in early October, Hannover House decided to try to step-up and reach for one-thousand (1,000) screens - and to do so on the date that Regal felt was most conducive, specifically October 30 (as "counter-programming" to the Paramount titles as well as the abundance of other horror-themed titles in the marketplace).  So we moved the date and announced our plan to reach out for more screens. 

Expanding from a prior release record of 250 locations ("On Any Sunday: The Next Chapter") to 600 was already proving to be exponentially challenging... but the 1,000 level was far harder than merely adding 40% more locations... to achieve that high screen count meant that HHSE would have to reach into many of the smaller markets (often "single theatre" operators), set up new vendor relationships, establish "Virtual Print Fee" agreements with aggregators that do not handle the major circuits, and seek to obtain "multiple runs" in existing markets (such as four locations in Las Vegas, fifteen locaitons in Atlanta, etc...). By October 12 (after meetings at the ShowEast confab in Miami), it was beginning to become evident that 1,000 screens was too aggressive at this time for a growing distributor like Hannover House, and too ambitious for a smaller, PG film like "DANCIN' IT'S ON."  Since the primary release goal was to satisfy Netflix requirements, which do not demand such an ambitious screen count, the push to open he film on "X" number of screens became less important than focusing energies to assure that the release requirements were fulfilled. 

Then another interesting and unexpected development happened.  Paramount began scrambling for additional screens about two weeks ago.  The chilly reception among theatre circuits to their collapsed V.O.D. window was suggesting that the total screen count for these two releases might not hit contractual or ancillary license requirements.  And since both films are "horror" related, the push for October 30 grew urgent.

Accordingly, several theatre circuits made the decision to "postpone" some of the theatrical locations previously allocated to "DANCIN' IT'S ON" in order to accommodate the two, controversial Paramount releases (under "new terms" that are rumored to include significant "per location" guarantees to the theatre circuits - dollar amounts that rival pure "rental" rates in many locations - and which also rendered the "maybe" of revenues from "DANCIN' IT'S ON" less interesting than the "assured" location guarantees that were now being offered by Paramount).  So late last week, HHSE received the news that one circuit was moving "DANCIN'" to Nov. 13, and another circuit was cutting their initial screen count from 118 to 42 locations opening today.  This meant that about 300 locations that were previously slotted for our film, were either cancelled or postponed, in order to make room for the Paramount titles under the lucrative new terms being offered.

This left HHSE with 407 locations for today - with 45 locations in Canada on deck (Dec. 4), 82 locations still intact that were already scheduled for Nov. 13, and an offer (for Dec. 4) of approximately 55 discount / second run locations.  How many of the 300 locations that were "postponed" will actually manifest ss new bookings on Nov. 13?  That would be a guess, but it is likely to be a far lesser number that ultimately "come back" to the release, unless the box office results surprise us all.

That said, "DANCIN' IT'S ON" opens today in approx. 407 locations.  On Nov. 13, about 82 more theatres will be added, and Dec. 4, it will be a new release in Canada and a second-run reissue in the USA for a total of approximately 592 total screen dates.  If ANY of the postponed / cancelled dates return, then this number of total screens will increase even more.  What does this mean relative to the Company's goal of satisfying the Netflix requirements? Nothing. Those requirements have been achieved.  The goal of satisfying the lucrative license has been met by virtue of satisfying the national release requirement (in fact, approx. 94.2% of the USA population is within DMA zones for the film's release today).

So what about the box office results?  Is it going to be a HIT?

No, HHSE has always predicted that the film will have minimal box office results.  The theatres agree, which is why a "tough" weekend (Halloween) was recommended for the film - as it's a weekend that usually LOSES an entire day to costumed parties (and has a 35% "dip" in total ticket sales as compared to the prior weekend).  Except for horror films, the major studios usually shy-away from releasing films on Halloween for this reason (it's a weak weekend at the box office).  But that same dynamic of LESS NEW RELEASES arriving in theatres is what makes "DANCIN' IT'S ON" an interesting option for theatres this weekend - as opposed to Thanksgiving (in which a modest indie release would stand little chance of getting screens).

But regardless of how the film performs at the Box Office, achieving the national release is a milestone for HHSE - and our next national release (late January) will be that much easier to achieve.

The previous business model of low-cost, direct-to-video releases was limiting to HHSE revenues.  The Medallion Releasing strategy of pooling tonnage of direct-to-video-releases has helped stem the tidal movement.  But the real revenues in the industry are from significant theatrical releases - and how this level of exposure drives ancillary home video and V.O.D.  The new business model for HHSE - to have several significant theatricals as the locomotives of our annual release slate - is what will elevate the company in stature, visibility and revenues.

TV Spots are currently airing for "DANCIN' IT'S ON."  Digital banners and presence extend from major sites such as FANDANGO and IMDB to local market TV and Radio stations that are also advertising outlets for the film.  In almost every ad, the HHSE stock symbol has been included, including the New York Times and Time Out New York. 

If you're in NEW YORK CITY, at 6:30 pm tonight, Russell Ferguson will be appearing in Times Square for Black Entertainment Television in a "DANCIN'" Promotion - then will pose for pictures with fans at the lobby of the Regal E-Walk, 247 E. 42nd St., at about 7:15 pm.  If you're in LOS ANGELES, disc jockey Ray Isaac (from the film) will be spinning music at the Regal L.A. Live Theatre / Downtown Staples Center (1000 W. Olympic Blvd.) with cast members at 6:30 - before a 7:30 pm special event screening in the luxury lounge auditorium (all activities being covered by a crew for M-TV).  Director David Winters and cast members will also be appearing in two Miami locations tonight. 

More to follow!



Thursday, October 29, 2015

Mega-Blog Post / General Updates for pre-market tomorrow (Friday, Oct. 30)

Good Morning HHSE Friends & Followers: the past two weeks have been the most intense in the Company's history - with a large variety of issues and activities monopolizing every waking hour, and demanding little time to stop and reflect.  As a result, this blog - and other shareholder communications - have suffered and been functionally silent. Apologies to all of you who have felt that the HHSE managers had fallen off-the-grid. It's a bit like being in the middle of the SuperBowl, and stopping to check for messages on your I-Phone.  Sometimes it's best to stay focused on the task at hand, if the reward is this substantial. 

With the completion of the launch of the theatrical release of "DANCIN' IT'S ON" - which premieres at the Carmike 10 tonight in Panama City, FL (major event sponsored by the Florida Film Commission), and opens commercially in all of the top USA markets tomorrow - there's finally time to catch a breath and write a blog update. 

Expect this by pre-market tomorrow, as most of our executive team is traveling today (to manage the "opening day events") in New York, Los Angeles, Miami, Panama City, Dallas-Ft. Worth and Minneapolis-St. Paul.  Meanwhile, below are some random photos from last week's MEDIA DAY and RED CARPET PREMIERE events held in Los Angeles.... and some of the DIGITAL BANNERS running on sites including PEOPLE.com, Fandango.com, IMDB.com and 43 other high traffic entertainment and exhibition websites.

Friday, October 9, 2015

Friday Afternoon Reading...

Good afternoon HHSE Friends & Followers – we are writing today to clarify some misconceptions and intentional misstatements on chat boards about status of final resolution of the HHSE deal with TCA Global Master Fund.

In filing a motion for default (about two months ago), TCA’s attorney made some representations to the court that were clearly and demonstrably in error, including:

a).  Failure to provide credit reductions for prior payments;

b).  Statements that inaccurately represented that TCA (through Magna) was unable to receive freely trading shares (when, in fact, TCA / Magna has received 38.8-million shares in 2015 alone!)

c).  Statements which inaccurately represented the limited scope of the U.C.C. Security Interest (which is very specifically limited to a partial list of pre-2013 catalog titles – and does not extend to the new releases and ventures which drive the majority of HHSE current revenues).

d).  Failure to disclose to the court that an authorized representative of TCA had agreed (both telephonically and via emails), to NOT proceed with the lawsuit or filing of a default as long as HHSE was continuing to process payments (either in cash or via MAGNA transfers);

When HHSE learned that the attorney for TCA had filed a default – and that the motion for default contained multiple errors (above) in the filing to the court – we had to make a managerial decision.  Do we spend time and money to file with the Florida courts an objection to the default, and cite the client’s agreement to defer action, or cite the errors in the filing?  Or do we simply finish off the last few payments and get this matter off our plates and removed as the toxic distraction that it has become?  We elected to take the faster route of just paying it off… and since that date, the balance has been reduced by $100,000 and only $100,000 remains ($50k each payments for Nov. 4 and Dec. 4).

These issues of fact are not up for debate or reinterpretation by reality deniers.  The shares that TCA / Magna received are clearly evidenced; the payments that HHSE has made are clearly evidenced; and the limited scope of the TCA U.C.C. Lien is a publicly filed document.  End of story, and fortunately for HHSE and our legitimate shareholders, we're at the end of the TCA relationship.

Wednesday, October 7, 2015

"Impressive" is a word that many industry leaders are using to describe HHSE activities right now!

Good afternoon HHSE Friends & Followers - Lots happening on many levels (corporate, legal, theatrical, home video and VODWIZ).  Here's a few items of interest, provided at the specific request of shareholder emails:

1).  DANCIN' IT'S ON! - Official Theatrical Trailer - PREMIERES THIS FRIDAY, OCT. 9!  We are so honored to have Regal Entertainment Group as our distribution partner on the film's TRAILER launch... and it will appear THIS FRIDAY on approximately 1,100 Regal Screens showing the Warner Brothers fantasy adventure, "PAN."  This is a HUGE development for an indie studio: to have our trailer selected for national release in front of a top three studio release!  The REGAL placement will last through October, and will be supplemented next Friday with more screens showing "GOOSEBUMPS."  Total impressions on movie-goers is predicted to be 3.5-million.  Plus, the trailer will begin showing up EVERYWHERE (other theatres and websites) beginning Friday.  This is a superb way to JUMP START the buzz on "DANCIN' IT'S ON" and to elevate the visibility of HHSE.

Meanwhile, you can Sneak Peek View thbe trailer here:


ALSO - the "HAPPY" poster variation will appear in THREE Color configuarations.  The BLUE background will be utilized for the film's primary theatre lobby posters... the YELLOW background will be utilized for DANCE SCHOOLS / DANCE STUDIOS (comprising a major portion of the outreach campaign), and the WHITE background will be utilzied for post-card sized handouts.

2).   OPENING DAY EVENTS - Too much to describe here at this time... but there will be "DANCIN' IT'S ON" media and consumer events in eight of the nation's top markets for Friday, Oct. 30.  More details to follow....

3).   NATIONAL TV ADS - Wait until you see our "STEP-UP" Style national TV spot - which debuts NEXT MONDAY on "DANCIN' WITH THE STARS" (we will post a link on this blog before hand!).  Fast, Furious, Fun - it's got tremendous energy and impact!

4).  TCA DEBT - Yes, in  response to email inquiries, Hannover House DID make the October cash payment on time to them!  No more el cheapo shares to hurt the stock as a result of the painful TCA / MAGNA structure that had dogged the PPS the past three months.

5).  SHARE ISSUANCE ERROR - HHSE has hired a litigation firm to pursue a lawsuit to force the return of approx. 9.8-mm shares that were erroneously issued in last month by Standard Registrar to Blackbridge Capital on an already fully retired convertible note.  We hate to sue these parties, but they were not entitled to the shares and refused to freeze the issuance or return the shares. It is possible that this mistake will spell the end of the HHSE problems we've had with Standard Registrar as it will force either a better system of controls on their part, or force us to move to a T.A. that consistently follows due diligence protocols.

6).  DARK AWAKENING - Shipments to WALMART and TARGET went out last week via SONY DADC and ALCHEMY Entertainment, with product appearing at their stores over the next few weeks (pre-Halloween!), in a staggered spread that will ultimately reach all A, B and C level stores.  BEST BUY, FAMILY VIDEO, HASTINGS, EURPAC and other major accounts have also shipped, with overall DVD quantities surpassing the Company's prior shipment record of 71,000 units of HUMANS VS. ZOMBIES.  Pictured below is HHSE's Katherine Mills, displaying some of the DVD product "hot off the press" from the HHSE DVD replication line!



Friday, October 2, 2015

Update on Specialty Cinema Releases

Greetings HHSE Friends & Followers - While most of the air in the room is being consumed with the massive launch this month of "DANCIN' IT'S ON" - there's still a lot happening with the Company's core video business, as well as with SPECIALTY RELEASES.  Here's a quick snapshot of a few of the current / upcoming titles (but not all of them!):

BONOBOS: BACK TO THE WILD - Continues in limited theatrical release.  Currently "held-over" in PORTLAND at the Regal Division St. Stadium 13 (check out today's ranking, # 2 behind MARTIAN, but ahead of HOTEL TRANSYLVANIA and all others!!).  Still on deck for BONOBOS is SAN DIEGO (this weekend, including the SAN DIEGO FILM FESTIVAL), as well as DALLAS-FORT WORTH and LOS ANGELES.

THE ALGERIAN has performed in the top tier at each location it's played (never ranked below # 3 among all titles at the multiplexes, during it's opening weekend in each city!).  As a result, the film will enjoy a modest "simultaneous" release expansion on Oct. 23 to these cities:

3 Chicago
4 Philadelphia
5 Dallas-Ft. Worth
7 Boston Metro
9 Atlanta
10 Houston
11 Phoenix
12 Detroit Metro
13 Tampa St. Petersburg
15 Minneapolis-St. Paul
16 Miami-Ft. Lauderdale
17 Denver
18 Orlando-Daytona Beach
20 Sacramento-Modesto
21 St. Louis
22 Pittsburgh, PA
25 Raleigh-Durham

ENCOUNTER opens December 4 - as counter-programming to the holiday fluff fare that will dominate the Thanksgiving and Christmas seasons.  The film is slated to open in approximately 30 theatres, including 8 of the top 10 largest DMA markets.  Here's the First Teaser Poster, and a link to the First Teaser Trailer below!

(Encounter Teaser Trailer):



Ted McBride (Justin Arnold) and his new wife Lauren (Andrea Nelson) move to the country to film his thesis project, a study to investigate atmospheric phenomena commonly known as “orbs”. Ted soon realizes that he and Lauren are being stalked and affected in strange and frightening ways by the same force that drove Jim out of his mind. In the exciting conclusion of the film, Ted and Lauren fight to save each other and escape the evil that they have discovered that now stalks them.

Reminiscent of Paranormal Activity and Conjuring, Encounter is an intense, horror, supernatural thriller with a female human egg harvest by aliens story twist, as inspired by true events.