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Thursday, June 14, 2018

Securities Attorney Opinion: It is legal for HHSE officers to BUY shares on open market

Greetings HHSE Friends & Followers - A combination of factors have created an environment within which the stock pricing for HHSE has been temporarily and artificially lowered through manipulative trading activities. 

Due to the current, absurdly low stock price, HHSE managers reached out this morning to a securities attorney to seek an opinion as to whether it was LEGAL and APPROPRIATE for Parkinson and / or Shefte to PURCHASE HHSE shares off the open market in order to achieve a substantial R.O.I. benefit for their trusts.

Here's a summary of the securities attorney's opinion:

1).  Yes, public company officers are allowed to buy shares on the open market, but these shares immediately become "restricted" from regular resale, as with all other officer owned or controlled Rule 144 shares.

2).  Yes, but if a public company officer buys any shares, these acquisitions or dispositions must be disclosed in a Form 4 filing with the S.E.C. "...before the end of the second business day following the day on which a transaction resulting in a change in beneficial ownership has been executed."

3).  Yes, public company officers can profit from buying shares during artificially manipulated pricing dips, but not if the officers have any involvement with the traders or brokers that have created the artificially low pricing.

4).  Yes, public company officers CAN act on their superior knowledge of a company's operations and activities and make wise investment decisions... PROVIDED... that all of the key elements for motivating an officer's direct purchase of shares are based on publicly disclosed information... in order that no non-affiliate shareholders are impeded from having the same, superior and accurate information about the company.

ACCORDINGLY, and in order to be fully transparent in providing ALL SHAREHOLDERS with the same level of superior, accurate and updated information on all activities for HHSE that is enjoyed by the managers, please note the following key updates:

1).  FORM 10 REGISTRATION activities are well into motion.  HHSE managers believe that the fully reporting status (automatic on 60-days after filing), will positively impact the company's share price and volume.

2).  MAJOR INSTITUTIONAL INVESTORS / FUNDS - HHSE managers have been working with three major investors / fund groups, one of which has already accumulated a position in HHSE.  The other two are restricted from acquiring Pinksheet equities, but have confirmed with HHSE their intentions to acquire significant shares "post registration."  HHSE managers believe that the successful recruitment of these major funds into HHSE will have a very significant and positive impact to the share price, volume and liquidity.

3).  ELIMINATION OF BALANCE SHEET DEBTS - As a component of the Registration filing, HHSE managers have successfully negotiated substantial reductions in debts currently carried on the Balance Sheet (which have been achieved without any new share issuances).  HHSE managers feel that this will improve the optics of the company's liquidity and credibility to outside financiers.

4).  ELIMINATION OF NUISANCE LEGAL MATTERS - The evolution and maturation of the home video business (away from Physical unit sales to streaming), has resulted in some dead-on-arrival DVD releases for HHSE over the past few years... and this has ended up in "nuisance" lawsuits from small producers that have ignored the contractual structure and disputed the applicability of releasing costs.  One recent case, AMITYVILLE ASYLUM, was found in HHSE's favor, and another recent case (XVIII ENTERTAINMENT - four titles), was dismissed.  There are other cases in motion, including Origin Films and Crimson Forest, that HHSE managers and outside counsel are very confident will also be easily won or promptly resolved with no adverse affect to HHSE.  Accordingly, the elimination of these legal matters will also improve the optics and credibility for HHSE,

5).  WIDESPREAD SUPPLIER SUPPORT FOR MYFLIX - Like the opening day for the Oklahoma Land Rush, HHSE is at the starting line with our wagons loaded for a major digital stake into MYFLIX.  The venture already has over 30 significant suppliers, including titles from three major studios, and potentially could be the # 2 streaming site in North America (subordinate only to Amazon.com) in terms of total quantity of features, television episodics, video games and educational programming.  Titles that are currently "only" selling 5,000 DVDs suddenly become VERY PROFITABLE under the Myflix model, as there are no manufacturing or freight costs to dilute the revenue streams.  Titles generating 5,000 TVOD transactions at $1.99 each (about $10,000) doesn't sound like a big deal... until you realize that Myflix now has access to over 10,000 titles and episodics.  The potential revenues to be generated from this new streaming operation dwarfs even the best years ever achieved from the HHSE core activities with physical goods distribution.

6).  TIMING IS IMMINENT:  During the next few weeks, months and all occurring during this current fiscal year, HHSE believes that:  a).  Registration will occur; b).  Myflix will be launched; c).  New "whale" investor funds will begin accumulating shares; d).  The new key-titles distribution pact through SONY and ongoing title releases through CINEDIGM will begin to monetize; e).  The IRS Tax issue -  the principal for which is now fully paid - will result in a formal "release of levy" filing;  f).  Production funding for two "event" level films will be finalized; and, g). HHSE's general credibility and financial position will dramatically increase.

It is for THESE KEY REASONS that HHSE managers have sought an opinion as to the legality and appopriateness for officers, directors and managers to buy HHSE shares off the open market at this time.

HHSE recognizes that there are currently some "bad optics" that the "bad-actor" traders have used to attempt to create fear and uncertainty. We feel the relentless (and false) criticisms against HHSE on stock chat boards by these trading manipulators has contributed to what is currently a "Black Friday" level of buying opportunities for HHSE shares. The motivation of these "bad actors" is to control the stock pricing and try to keep it trading at under $.015 for maximum swing on the "rinse-and-repeat" boxing strategy.  But in doing so, they have taken our stock - which has been predicted by substantial investment funds to be worth ten-cents per share or more by year's end - and created a tremendous buying opportunity.

HHSE managers are seriously contemplating the prospect of buying shares at these current pricing levels, and wish to note to all legitimate shareholders that all of the information otherwise considered "inside" or "beneficial" towards supporting such an opinion, has been reiterated above. HHSE managers have NOT stalled on
the filing of the Form 10, or the resolution of legal matters, in order to fuel this unusual stock pricing opportunity.  If HHSE managers proceed with purchases of HHSE shares off the open market at these current levels, the disclosure requirements of a Form 4 statement will be properly filed with the S.E.C. in a timely manner.