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Monday, November 16, 2015

Monday, Nov. 16, 2015 - BUSY DAY / BUSY WEEK FOR HHSE!

Good Morning HHSE Friends & Followers - Today will see quite a bit of activity corporately for HHSE.  Here's a quick summary:

1).  Q3 EARNINGS - FILING and PRESS RELEASE - As predicted, the Company completed a stellar Q3 period in terms of release activities, revenues and bottom line results.  The Q3 Earnings Statement will be filed today with MacReport Media (for S.E.C. Edgar listing - usually a day delayed before it appears on Edgar), as well as through a general distribution press release, and the OTC Markets.

2).  AFM MARKET RECAP - A summary of completed acquisitions from the AFM (American Film Market) will be completed today - and will be sent to the program suppliers / licensors for approval before public release through the entertainment trades and wire services.  It was a successful market for acquisitions for HHSE, both in terms of quantity of new titles, and quality of releases.

3).  FORM 8 NOTIFICATION - LEGAL PROCEEDINGS - The Company will be filing a Form 8 Statement - also through MacReport Media - that should appear on the S.E.C. Edgar site by Wednesday.  This document will describe the status of HHSE legal proceedings in pursuing the rights and remedies for the Company with respect to key legal matters:

a).  TCA GLOBAL MASTER FUND - Final installment payment to fully retire the TCA note, as well as the actual interest, the "premium" interest, the "penalty" interest, the "financial consultation fees", and the "legal" fees to assess the penalty fees is scheduled to be fully paid by HHSE in CASH next month (in December).  The Company has paid $150,000 in the past 60 days, and anticipates no issues to impact the release of the final payment.  Following TCA's receipt of the final installment payment, the Company will require a return (to treasury stock) of the certificate of 10-million common shares of HHSE which were issued to TCA as a fee or as collateral (at TCA's option) under the agreement. Upon receipt of the final installment, the Company will seek to obtain and file a release of the UCC lien that TCA has held over specific catalog titles from April 2013 or older.  The existence of the TCA lien - despite the extremely limited scope of the lien - has impeded the Company from obtaining traditional financing under customary and non-usurious terms.  The Company is filing a response to the Florida Courts to verify the payments made on the note, in order that the TCA judgment amount be properly reduced from it's original total.

b).  STANDARD REGISTRAR GRIEVANCES - The Company has two issues of complaint with Standard Registrar (the Company's current Transfer Agent), concerning the issuance of shares without meritorious basis - or in direct contradiction to Company instructions.  The venue for this action is being moved out of Los Angeles, and will be described in the Form 8 Filing.

c).  SHARE STRUCTURE - The Company refiled the notification and Amended Articles of Incorporation with the Wyoming Secretary of State, as noted on August 11, 2015, to freeze the total A/S of stock at the board approved level of 800-million.  The pending return of the TCA Shares, and the anticipated return of the Blackbridge Capital shares issued in error should collectively created a sufficient reserve under the 800-million A/S cap.

d).  COMPANY SHARE BUY-BACK - In response to the unusually low share pricing at present, the Company discussed the options of buying back (and retiring) additional shares of common stock.  Counsel advised that this activity be deferred until after the TCA lien is fully released, and after three other creditor settlements are finalized next month.  The Company's proposed use of cash proceeds to buy up common stock off the open market, while simultaneously requesting termed-payments from old creditors, might be viewed as abusive or disingenuous (despite the attractive value of the shares at the current pricing).  This issue will be readdressed in January, and will be offered up as an item for shareholder vote.

e).  FORM 10 FILING & AUDITORS - The Form 8 Filing will describe the status of the updated Form 10 Registration.

f).  CIVIL LITIGATION AGAINST STOCK MANIPULATORS - The Form 8 Filing will describe the status of the Federal Case against the parties that have organized to damage the Company's stock value.

4).  VODWIZ - More suppliers have joined the VODWIZ ranks; yet technical, operational and financial issues have stalled the launch of this V.O.D.-streaming portal venture.  A restructuring meeting planned for last Wednesday got delayed a week due to a personal (family) matter impacting  HHSE CEO Eric Parkinson (which had him out of the office for a several days last week).  If the new restructuring can be finalized as presently envisioned, then there would be no further delays in launching VODWIZ under a highly visible campaign.  It is HHSE's hope that this matter can be resolved on Wednesday, and formally announced by week's end.  If the matter is not finalized in time for a formal (consumer or public) announcement this week, then HHSE will update shareholders and followers via this blog.

5).  RELEASE SCHEDULE - With Key Theatrical titles going into "promotion" phase in the next few weeks, formal announcement is now due.  HHSE has nine theatrical titles in queue for 2016, along with 36 home video releases.  Items being released during Q1 (2016) will be announced this week.

6).  PRODUCTION MODE - As the Company continues to develop "output" relationships with key licensors (e.g., international buyers and domestically with Netflix), the prospect of producing films with 100% presales in place is becoming realistic.  The benefits of such financing arrangements are multifold.  Firstly, it will enable HHSE to select the projects that are most commercially suitable for our buyers (instead of trying to make third-party acquisitions "fit" into a specific box).  Next, original productions diminish (or eliminate) third party participations (which on acquisition titles are often 75% of the gross margins being paid out).  Lastly, the ownership of films creates a permanent library valuation (as opposed to a transient license that expires in 7, 10 or 21 years).  While no specific news will be released this week with respect to original productions - watch this space in December as news of several large (and a few 'smaller') productions is expected to be released (as these projects and ventures are included in the Form 10 filing).