Greetings HHSE Friends, Followers and Shareholders - what happens with you have 6,000 journalists and 11,500 registered attendees and 100,000 tourists converge onto a small area of about 2-square mile area in southern France? Well, quite a bit, actually. But for several frustrating days, what was most annoying for HHSE / Medallion was the total crunch of internet bandwith - data and WiFi access. Like 20-pounds of potatoes trying to cram into a 5-pound sack, only the priority fiber-optic owners seemed to get good access, and those on the Palais Des Festivals WiFi Network have been challenged to get even emails to open.
Daily updates have been logistically impossible. But we are going to present a brief overview now...
HHSE / Medallion screened FOUR films in Palais Market Screenings. Good response!
HHSE / Medallion titles were advertised DAILY in the Official Cannes Show Daily (full page ads!);
HHSE / Medallion conducted over 150 meetings thus far, with buyers / licensors from Germany, Spain, France, Italy, U.K., Australia / New Zealand, South Africa, Pakistan, India, Phillipines, Malaysia, Indonesia, Korea, China and Japan. Our heads are spinning and we have stacks of notes, agreements and quite a bit of follow-up for post-market closings.
This weekend, meetings will occur in the U.K. with the financing parties behind Silver Line Films - the company with whom HHSE has contracted for the full-financing of "AJA" and "MOTHER GOOSE" (each at $3.5-mm USD and each FULLY FUNDED!). "AJA" commences principal photography in July (in Savannah) so there's already a crew on staff and working now for this production. "MOTHER GOOSE" stars Sept. 12, but the only staff currently working are the production design team (character design, make-up, prosthetics, wardrobe) and the primary producers. "AJA" is an Oscar-caliber film (that's our goal) and "MOTHER GOOSE" is a freakishly commercial film (also our goal). So the two films represent the two primary creative / financial goals that HHSE / Medallion will be seeking as we emerge from the limitations of direct-to-video level films, and take these important, initial steps to become a Major Independent (ala Lionsgate / Summit).
HHSE Managers will be back to the corporate offices next Thursday after the conclusion of Cannes meetings and London / U.K. finance meetings.
Much More Later - including the Promo Reel from KRAFTROC!
Wednesday, May 18, 2016
Tuesday, May 10, 2016
HHSE / Atlantic & Dr. Freeze Pact on "KRAFTROC" - Now Shooting!
Here's a few assorted stills from the first week of Principal Photography on the epic science-fiction / musical feature, "KRAFTROC" from producer Elliott Straite (aka "Dr. Freeze"), director Dean Jones and producer Christopher Powell. Musical Stars and Celebrities from the Hip-Hop World are on board for this unusual and impressive film - that one recording superstar has described as "the most original, long-form musical feature since 'Purple Rain.'" We agree! Watch for more updates....
HHSE / MEDALLION set a major International Stage at the CANNES Festival!
Dear HHSE
Friends & Followers – Today
(Wednesday, May 11) marks the first day of what film-industry insiders are
calling “a new era” for Hannover House.
Today is the broad launch of the International Sales division under
Medallion Releasing, Inc. (the
wholly-owned subsidiary & affiliate of Hannover House) at the
prestigious Cannes Film Festival and Marche Du Film in Cannes, France.
Hannover
House / Medallion have a significant presence through a market booth on the
main floor of the Cannes Palais, on a corner placement of the Aisle for maximum
traffic and visibility. The company will
be presenting thirty-two (32) titles at the market – many of which are listed
on the S.E.C. Form 8 Information Statement, a copy of which is posted below (the actual Form 8 is “in process” for
publication via Edgar momentarily, we’re told – more on this below).
Because of
the “material” level scope of many of
the titles being presented today at Cannes (and
the dollar value of the private financing secured for these ventures),
company counsel advised that this news needed to be presented via both a Form 8
disclosure, as well as through this informational blog (due to publication delays with getting materials onto Edgar – again,
more on this issue below). All of
the titles listed on the Form 8 are being presented to international buyers at
Cannes, starting today. Most of these
titles are also described in far greater detail on the new Form 10 registration
filing that shareholders will be happy to see soon.
HHSE / Medallion
titles will also be featured in an impressive TWO-PAGE CENTER SPREAD of the
Official Cannes Film Market Guide – which all attendees will receive during the
market. Additionally, each of the
principal eight days of the Marche du Film will have a full page (tabloid sized) ad for HHSE / Medallion (or for a title-specific promotion or
screening announcement), on the Inside Back Cover of the Le Film Francais
Show Daily. This is also an extremely
high-visibility support for our titles.
HHSE / Medallion have four “Official
Cannes Market Screenings” – THE
HOMELESS BILLIONAIRE screens on Thursday, May 12 (and will be launched to USA theatres by Hannover House on June 17 –
more on this title soon); VALLEY INN
screens on Friday, May 13; THE ALGERIAN
screens on May 14; and THE DOLL
screens on May 15. More on all of these
deals will be released soon. HHSE is
also showing a teaser / promo reel from the first week of principal photography
on KRAFTROC – an outrageous
science-fiction musical feature originally developed by and for Michael
Jackson, before his untimely death in 2009.
Obviously, there will be much more on this title to be released soon, as
well.
As a result
of our email campaign to film buyers – and their reaction to seeing a broad
range of theatrical and commercial home video releases – we are proud to
announce that we have over 160 appointments with buyers during the market,
representing all of the top 30 largest media territories. In fact, we’re a bit
freaked out about how many meetings we have stacked up each day… however, we
have four booth / sales team members including Fred Shefte, Eric Parkinson,
Shane Ahaus and Desiree Garnier. VP of
Sales TOM SIMS is closing a major domestic deal and could not attend Cannes
this year (you will be hearing about this
exciting VODWIZ venture immediately after Cannes). And theatrical relations
manager JAYSON BLOCKSIDGE needed to stay in the USA to handle details with the
upcoming release to theatres of A
REMARKABLE LIFE and THE HOMELESS
BILLIONAIRE. Last but not least, we are both proud and sad to announce that
HHSE Home Video Director of Sales, CAITLIN McKENZIE has accepted a sales
position with Universal Music Group, and will be leaving HHSE on May 20. Caitlin is a superstar, smart, hard-working, loved
by the customers, and it’s not at all surprising that Universal wants her for
their team. Not to worry, though, we
have a replacement in mind for her sales-support position at HHSE, and a final
hire will occur later this month for a seamless transition.
Separate and
apart from the titles being launched at Cannes today – watch for a new
distribution partnership announcement from Cinedigm with HHSE / Medallion. We are pleased to add Cinedigm to our family
of wholesale partners, and look forward to a long and mutually beneficial
relationship with this well-funded entertainment distributor.
Regarding
S.E.C. Edgar filings, HHSE was surprised to discover yesterday that
MacReportMedia is no longer handling any Edgar filings for any companies. PattyAnn Phillips is no longer employed
there, and the response received to our Form 8 filing on Sunday was that a “change in business” at MacReport
required that they eliminate Edgar reporting and only handle press release
distribution. Accordingly, the Form 8
that we wanted to have posted on Tuesday by MacReport needed to be submitted to
a different Edgar filing service. This
required the reissuance of new CCC access to supplement the CIK filing details
for our entity. So this has created an
unexpected delay in getting the Form 8 (below)
onto Edgar. But it’s “in process” we’re
told.
Final issue
to address today: some shareholders have asked WHY the International Division
and booth presence at Cannes is under MEDALLION RELEASING and not HANNOVER
HOUSE? This is due to perception issues
for our product suppliers. For instance,
HHSE is handling the International Rights to VALLEY INN, but we’re not handling
the domestic home video or the television rights. To avoid market confusion, it’s simpler to
list INTERNATIONAL titles under Medallion (instead of under Hannover House - even though the rights are contracted with Hannover House, to be released "By Hannover House or an affilate or division of Hannover House, including but not limited to Medallion Releasing, Inc.). This is so that companies like Monarch Entertainment or
Cinedigm don’t appear to be overshadowed by a company (Hannover House) that also competes with them in the North American
market for new release title acquisitions. It’s
politics – and courtesy. A possible
comparison would be to look back when DISNEY created TOUCHSTONE Pictures: some
titles made MORE SENSE to be handled by a company NOT named Disney.
DAILY
BLOG UPDATES FROM CANNES – You will want to see what’s happening here… JUST
WATCH!!
*UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
_________________
FORM 8-K
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2016
_______________________________
Hannover House, Inc.
(Exact name of registrant as specified in its charter)
_________________
Wyoming
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000-28723
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91-1906973
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation or Organization)
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File Number)
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Identification No.)
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1428 Chester Street, Springdale, AR 72764(Address of Principal Executive Offices) (Zip Code)
479-751-4500(Registrant’s telephone number, including area code)
f/k/a "Target Development Group, Inc."
f/k/a "Mindset Interactive Corp."
330 Clematis Street, Suite 217, West Palm Beach, Florida 33401 (561) 514-0936(Former name or former address and former fiscal year, if changed since last report)
_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
x
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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SECTION 8 — OTHER EVENTS FOR REGISTRANT
Item 8.01 - Other Events – INTERNATIONAL SALES ACTIVITIES
Management hereby discloses the execution of a variety of new agreements governing the representation rights granted to Company for a multitude of new releases, catalog titles and current productions that will be announced as of May 11, 2016 at the Cannes Film Festival and Marche du Film – including through a two-page (Center-Spread) ad layout in the Official Cannes Film Festival Market Guide / Le Film Francais, for distribution to all registered attendees at this year’s Cannes Festival and Market. The following titles are listed and described in abbreviated form for the purposes of providing shareholder disclosure. Additional information on most of these new ventures, titles and productions will be released by Management over the next two weeks of the Cannes’ market through the Company’s blog-site, and through title-specific news announcements.
MAJOR PRODUCTIONS
a). KRAFTROC – Company has contracted with Atlantic Film Studios for the production and distribution of a feature length musical film. Under the terms of the agreement, Atlantic shall be responsible for raising the production funds, estimated at $3.5-mm USD. “Kraftroc” was originally developed as a film for Michael Jackson, who was working with the principal producer, Elliott Straite (“Dr. Freeze”) prior to Jackson’s sudden and untimely death in 2009. The film chronicles the story of a team of interplanetary travelers, sent to Earth by Captain EO and challenged to spread enlightenment through music. Although visual images voice recordings of Michael Jackson are part the existing materials for KRAFTROC, there is no assurance that the trustees governing the Michael Jackson Estate will authorize such uses. Regardless, Atlantic is proceeding with the production and has already commenced principal photography. Company will be presenting a promo reel at the Cannes market and offering international rights licensors the opportunity to buy the film for their applicable territories & media.
b). AJA and MOTHER GOOSE – Company has contracted with Silverline Films, Inc. for the full financing of two feature films. “AJA” is a powerful and moving drama with an internationally acclaimed director and a top team of commercially-successful producers on board. Company has pre-approved the casting of John Malkovich or an equivalent stature leading star. Principal photography is planned to commence on or about July 18, 2016 in Savannah, GA. Company has also agreed to co-produce “MOTHER GOOSE: JOURNEY TO UTOPIA” with the production team assembled by Silverline, in consideration for Silverline’s agreement to provide the full financing for the production under terms that are consistent and standard within the industry for feature film financing partners. Key Character Design work has already commenced for this film, along with other qualifying pre-production activities; principal photography on “MOTHER GOOSE: JOURNEY TO UTOPIA” is planned to commence on Sept. 12, with five weeks in Georgia and one week in Ireland. ICM Partners talent, Shirley MacLaine and Samuel L. Jackson have been offered for this film subject to scheduling availabilities; presently, no scheduling conflicts have been presented to Company.
c). DELIRIUM / PATHWAY TO FREEDOM – Company has also contracted with Atlantic Film Studios on two lower budgeted features that Atlantic will finance and produce, with Company handling the worldwide distribution. “DELIRIUM” is a thriller that takes place in an asylum. “PATHWAY TO FREEDOM” is set in the pre-Civil War era and tells the true story of the Underground Railroad organization to help escaping slaves. Both films are planned to be filmed in North Carolina by Atlantic Film Studios later this year.
d). HALLOWEEN PARTY – A fourth feature film from Atlantic Film Studios will also be announced and presented by Company at Cannes. “HALLOWEEN PARTY” is a horror-comedy from actor-producer Dave Sheridan, one of the principal lead stars of the successful “Scary Movie” franchise. Discussions are in motion for the participation in this film by several of the Wayans Brothers, also alumni of “Scary Movie” features. Atlantic is responsible for the financing and production of “Halloween Party” with Company handling the worldwide sales and distribution.
NEW AGREEMENTS FOR EXISTING (COMPLETED) FEATURE FILMS
e). DANCIN’ IT’S ON – Company has contracted with East Side Story, LLC to represent the worldwide / international sales for the above film. Previously, Company performed theatrical and home video releasing services for this youth-dance-appeal film in the USA and Canadian markets.
f). POSSESSION: THE INGLODA WITHIN – Company has contracted with On Ride Entertainment, LLC, to add the worldwide rights to the existing North American venture for this horror film.
g). VALLEY INN – Company has contracted with Valley Inn, LLC, for the representation of all rights outside of North America for this family feature.
h). COOK COUNTY – Company has contracted with Greenwood Films, LLC to add the worldwide rights to the existing North American venture for this acclaimed drama.
i). HOMELESS BILLIONAIRE – Company has contracted with Fraydun Productions, LLC for the worldwide rights to this romantic comedy, including North American theatrical (which launches on June 17).
j). BLUES FOR WILLADEAN – Company has contracted with Kestrel Films, LLC to add the International Rights to the current North American sales and distribution representation agreement for this critically praised drama.
k). GABRIELLE and BRUTAL COLORS – Company has contracted with Royal Blue Pictures to add the international markets to the existing distribution pacts in North America for these two horror-thrillers.
l). THE DOLL and HALLUCINOGEN – Company has contracted with Sahara Vision Productions for the worldwide representation of these two, newly completed features. “The Doll” will be supported with an Official Cannes Market Screening.
m). ENCOUNTER – Company has agreed with Sahara Vision Productions to add the worldwide / international sales rights for “Encounter” to the existing distribution pact in North America for this sci-fi / horror feature.
n). DARK AWAKENING – Company has agreed with Atlantic & Pacific Pictures and The Little Film Company to a venture in which both Company and The Little Film Company will jointly represent “Dark Awakening” to international buyers.
o). AMERICA UNITED: IN SUPPORT OF OUR TROOPS – This ABC TV Primetime special features top musical acts and comedians, and has been contracted by Company with Freedom Partners, LLC for worldwide rights.
OTHER TITLES BEING SOLD OR OFFERED AT THE CANNES MARKET:
THE ALGERIAN – Action – Political Thriller;
CLOWN TOWN – Sci-Fi Horror (development);
DINOSAURS OF THE JURASSIC – Educational Documentary;
FUTURE SHOCK – Sci-Fi Thriller;
GRAND CHAMPION – Family / Drama;
LEGEND OF BELLE STARR – Western (development);
MELTDOWN – Action-Adventure (development);
OUTLAWS: THE LEGEND OF O.B. TAGGART – Western;
REQUIEM FOR THE DAMNED – Horror-Thriller;
SAMURAI: THE LAST WARRIOR – Martial Arts / Documentary;
SAVAGE LAND – Family Western;
SHADOW VISION – Sci-Fi / Horror (development);
SHUCK & JIVE – Urban Drama (development);
TEEN YOGA – Exercise / Self-Help;
TRUE FRESHMEN – Sports (development);
ZOMBIE WARZ: FALLS THE SHADOW – Sci-Fi / Thriller;
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: May 10, 2016
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Hannover House, Inc.
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By
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/s/ Eric F. Parkinson
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*************************************************************************
Monday, April 25, 2016
CANNES Title Brochure - available to all Shareholders upon request
Good Morning HHSE Friends & Followers - The Hannover House - Medallion line up for CANNES / MARCHE DU FILM this year features over thirty titles, including multiple NEW ANNOUNCEMENTS, plus FOUR official theatrical screenings and significant press & media outreach. For the convenience of our international rights licensors and buyers, the HHSE-Medallion product line-up has been compiled into an attractive, 28-page brochure. We are offering to mail copies of this brochure to shareholders (upon request), which will be mailed out on or about May 9th (two-days before the first day of the Festival and the launch of formal press announcements).
If you would like to receive a copy of the Cannes Marche Du Filme brochure from Hannover House-Medallion, please send an email with your mailing address to:
Desiree@HannoverHouse.com
It's hard to not be extremely impressed with this line-up... and we're proud of the stature of some of these impressive new releases. HHSE has struggled for years in the lower-budgeted realms, and finally has a slate of the level of mini-major releases that should elevate the company's stature, revenues and awareness.
If you would like to receive a copy of the Cannes Marche Du Filme brochure from Hannover House-Medallion, please send an email with your mailing address to:
Desiree@HannoverHouse.com
It's hard to not be extremely impressed with this line-up... and we're proud of the stature of some of these impressive new releases. HHSE has struggled for years in the lower-budgeted realms, and finally has a slate of the level of mini-major releases that should elevate the company's stature, revenues and awareness.
Wednesday, April 13, 2016
Walmart adds HHSE's "BRUTAL COLORS" to Summer New Release Promotion!
"BRUTAL COLORS" - an intense thriller from director Michael Conroy ("Gabrielle"), has been added by Walmart to the Summer New Release DVD assortment. The initial on-sale street date will be Tuesday, July 5 and the placement will be set at approximately 3,590 locations in U.S. stores.
Other major retailers supporting this title and summer initial release date include Best Buy, Family Video and Hastings. The title has also been submitted for consideration by Redbox and Netflix, with no determination yet made.
The Hannover House catalog / Film & TV Properties Library has grown to over 300 active titles since 2010, with approximately thirty (30) new titles being added each year - inclusive of higher-end theatrical releases, direct-to-video releases, multi-title assortments and original programming.
Other major retailers supporting this title and summer initial release date include Best Buy, Family Video and Hastings. The title has also been submitted for consideration by Redbox and Netflix, with no determination yet made.
The Hannover House catalog / Film & TV Properties Library has grown to over 300 active titles since 2010, with approximately thirty (30) new titles being added each year - inclusive of higher-end theatrical releases, direct-to-video releases, multi-title assortments and original programming.
Tuesday, April 12, 2016
UNION BOUND - Opens Friday, April 22 from Hannover House
Dear HHSE Friends - The Civil War drama, UNION BOUND, opens in theatres in major USA markets next Friday (April 22). Consumer support includes WEBSITE promotions on high traffic websites, plus cable TV ads, social media and mainstream publicity. Overall, the marketing campaign is expected to deliver over 200-million consumer impressions. Pictured below are some SCREEN GRABS from current or recent website campaigns, ads and promotions!
To View the Trailer, go to: www.UnionBoundTheMovie.com
Go HHSE!!
To View the Trailer, go to: www.UnionBoundTheMovie.com
Go HHSE!!
Friday, April 1, 2016
Comments & Questions - Post "SH MEETING" Take-Away...
Good Morning HHSE Friends & Followers - The Hannover House Shareholder's Live Streaming presentation yesterday afternoon has sparked a volume of follow-up questions and comments that require further response. By far, a statement made by Fred Shefte has generated the greatest level of shareholder concern or confusion.
1). STATUS OF AUDIT - WHAT IS THE REALISTIC TIMING?
After an update was provided by Eric Parkinson on the status of the Audits, Film Library Valuation and Form 10 Registration - Shefte added some additional comments that were clearly, at best, misunderstood or at worst, simply erroneous.
Shefte stated (correctly) that the auditors told us that the full process would take 60-days.
What Shefte neglected to say, was that the process commenced after the satisfactory completion of our second interview and the auditor's private investigator's report into the Company and officers (which items and final interview were completed in February).
Shefte then stated something to the effect that "it would have happened today, but we told them not to come in" (which was a reference to the HHSE warehouse crew being in the midst of packing / fulfilling a significant order of 108,000 DVD units that have a pending shipment date).
What Shefte neglected to clearly communicate was that the auditors requested to come into the HHSE offices as of YESTERDAY, to start the PHYSICAL INVENTORY COUNT of products and equipment. While it's correct to state that the inventory verification step has not yet started, it's not correct that the overall audit process has not yet started. As for yesterday's requested site visitation, HHSE managers determined that it would be chaotic to have them counting pallets in the middle of us live-streaming a Shareholder's Meeting and asking them to maneuver around the 108,000 DVD unit order that is currently blocking aisles and obscuring access to count products.
The full 2014 Financials and first three quarters of 2015 financials were delivered to the auditors over a month ago, following the final agreement and mutual acceptance of the engagement. Yes, at that time, HHSE was told that the entire process will likely take 60-days for completion, but not 60-days from NOW, because the process is already well underway.
As previously blogged, HHSE has been told that certain steps will minimize the auditor's notes on the Form 10, and HHSE would be required to conform to certain standards in order to receive limited footnotes from the auditors - and likely - limited commentary from the S.E.C. review of the Form 10-12(g). Those "recommendations" include:
a). Updated Film Library Report;
b). 2015 Tax Returns; and
c). Internal Procedures / Controls under Sarbanes-Oxley Act 404 Guidelines.
Over the past few weeks, HHSE completed the management tables elements for the updated Film Library Report (worksheets and presentation), and this item is already under third party review for a current valuation. Also, over the past few weeks, HHSE has begun assembly of a Controls Procedures Workbook for all operational and financial steps and strategies pursued by the Company. Lastly, the completion of the 2015 Tax Returns can only now commence, due to the timing of the year-end results (which took longer than management had hoped for due to the need to verify key third party payables and judgment balances).
The 60-day process with our auditors is well underway - and we are confident that the Form 10-12(g) will be filed prior to the Company's jaw-dropping line-up of major titles and major stars are revealed at Cannes. As will be demonstrated within the Auditor's Report portion of the Form 10, the commencement of date of the audit review and process will show the February (2016) timeline.
2). HOW WILL HHSE BE ASSURED THAT THE FINANCIALS ON THE FORM 10 ARE NOT "STALE" BY S.E.C. RULES?
In engaging the new auditors, HHSE has made a long-term commitment that is not limited simply to the 2014 and 2015 years and a Form 10 auditor's letter / report. We have asked the auditors to become a long-term member of the company's compliance and reporting team. As such, we have already included within the scope of services a Quarterly "review" of all 10-Q reports - which will make future year-end audits a far faster and simpler process. It has been determined that the Q1 results COULD also be subjected to the higher standards of "audit" as opposed to "review" if necessary, and that this additional step would be pursued if - and only if - something occurs that looks to jeopardize the planned Form 10 filing (which HHSE wants to occur prior to the Cannes Film Festival in May). The 2015 audit will go "stale" under S.E.C. rules at some point in mid-May (the precise date is subject to interpretations of guidelines). If the Form 10 is not filed by this S.E.C. "stale" financials date, then the Q1 results will be added to the Form 10 filing so that the financials meet the 135-day aging requirement. The Form 10 must contain the two, most recent years of full audited results... AND... the most recent ending period cannot be older than 135 days "aged".
So, unless an asteroid strikes Los Angeles and wipes out the firm that is review the Film Library Valuation company... or if Parkinson and Shefte are abducted by outer-space aliens and restrained from completing the SOX 404 report... or if the auditing company's building is sucked into a sinkhole... or any other such unforeseen (and extraordinarily unlikely) circumstance... then the HHSE Form 10 will include 2014, 2015 AND the full audited Q1, 2016 financials . Otherwise, we're on track. HHSE MANAGEMENT HAVE MADE THE COMMITMENT THAT THE COMPANY WILL NOT miss the filing of the Form 10 in the next few weeks. The CANNES title line up of high-profile productions is TRANSFORMATIVE and is the "Lionsgate" moment to take this company to heights that even the most optimistic of longs have not dreamed. We have made the commitment to make certain that the Company's shares are fully registered - to correspond with that time that the world's media and the world's major investment community - are looking directly at HHSE.
3). WHY ISN'T HHSE PROMOTING THE STOCK PPS NOW THROUGH I.R.?
As stated in the meeting, HHSE has spent tens-of-thousands of dollars over the past five years, hiring a wide range of "promoters" to help spread the word about the Company's achievements and opportunities - with the expectation that these activities will draw in new shareholders and ultimately impact the PPS. While these prior efforts HAVE generated results, the sustainability has never been long, as the charts show only a "spike" in PPS change after I.R. We have determined that sustained PPS growth is unlikely to occur UNTIL the Company files the Form 10.
HHSE is the only publicly-traded, full-service entertainment distributor whose shares are NOT yet fully registered. Accordingly, the PPS is suffering a horrible penalty of only trading at 3.2X Price-Earnings Ratio.... when the P/E for this market sector is 22X. There are a lot of major entertainment investor groups that have contacted HHSE with various opportunities for investment capital, growth opportunities and more. But without fail, the present lack of registration and auditing procedures stalls such deals. Fortunately, we are only a few weeks away from achieving this level of "Compliance Credibility." There is a widespread expectation that the HHSE PPS will jump rapidly following the Form 10 filing - and if this is contemporaneously timed with the major title reveals at Cannes - management believes that there are going to be some VERY, VERY HAPPY Shareholders at that time. And of course, the implementation of I.R. / P.R. to the investment community might finally make sense for that time frame as well.
4). ANGRY SHAREHOLDERS ARE THREATENING TO SELL BECAUSE HHSE HAS NOT YET RE-FILED THE FORM 10
One shareholder emailed that the SH Presentation was "a bunch of excuses." This comment ignores that the Company achieved RECORD REVENUES, RECORD PROFITS, massive DEBT REDUCTIONS and NO NEW STOCK EQUITY Transactions for the past eight months. Clearly, this individual - and possibly others - are single-issue shareholders. "If the Form 10 is not filed by the SH Meeting, then I'm selling my HHSE Shares." That's certainly the prerogative of any shareholder... to make an emotional decision to their own detriment. But, it is management's belief that selling shares NOW will create massive regret in just a few weeks time. Some shareholders are going to benefit wildly if:
* The filing of the Form 10 brings HHSE to industry P/E levels (6-X higher than current PPS trading);
* The Cannes major titles and stars generate X-millions in new sales for HHSE / MEDALLION;
* The momentum enables HHSE to "close" the funding and strategic partnerships that have been circling the Company for over a year; and,
* The consumer launch of VODWIZ is simultaneously launched, and quite realistically with 6,500+ titles ready to stream live to consumers this summer;
Shareholders are people, and people can be emotional. Accordingly, it would not be surprising if some shareholder's decided to throw-in-the-towel over the next few days because "we're not there yet." We get it. Target goal dates were not achieved, it's happened before, there always seems to be some unforeseen issue arise. We see how some Shareholders could grow weary. So what happens if someone decides to sell? Well, if they bought shares for more than $.01 each, that person will lose money on the sale....sort of a "self-inflicted wound" that only hurts them, and makes someone else very happy when the above achievements simultaneously occur. Selling shares now does not in any way "punish" HHSE management or impact the Company's operations. There are NO STOCK issuances in motion or even PLANNED. The Company is not selling shares and the management are not selling shares. Selling shares right NOW, just a few weeks from the "Lionsgate" A-HA moment for HHSE would be in management's opinion a move of "stupidity on an epic scale." But it's always a shareholder's prerogative to sell - or buy - whenever they want to, and for whatever reason they select. For every angry seller that hurts themselves by selling how.. there will be a super-happy (and arguably much smarter) shareholder taking their place.
The corporate achievements and major title growth are not years or months into the future. They are just a matter of weeks. So HHSE management advises shareholders to make whatever decision they feel is best suited for their needs or mood.
Despite having a record year of sales and profits in 2015, the HHSE stock PPS has still not seen much growth in recent months. Will this change with the achievement of the above benchmarks? Management certainly thinks so. But we don't control the market's reaction, so it's always possible that the stock price will not see a major and sustainable growth. It's the risk and evaluation that shareholder's need to make when selecting stocks for investment. Management's opinion is that HHSE stock SHOULD be trading at $.10 or higher. Management is taking the steps to make this pricing justifiable within the market. Will it occur? Only time will tell... but we won't have to wait long to find out.
1). STATUS OF AUDIT - WHAT IS THE REALISTIC TIMING?
After an update was provided by Eric Parkinson on the status of the Audits, Film Library Valuation and Form 10 Registration - Shefte added some additional comments that were clearly, at best, misunderstood or at worst, simply erroneous.
Shefte stated (correctly) that the auditors told us that the full process would take 60-days.
What Shefte neglected to say, was that the process commenced after the satisfactory completion of our second interview and the auditor's private investigator's report into the Company and officers (which items and final interview were completed in February).
Shefte then stated something to the effect that "it would have happened today, but we told them not to come in" (which was a reference to the HHSE warehouse crew being in the midst of packing / fulfilling a significant order of 108,000 DVD units that have a pending shipment date).
What Shefte neglected to clearly communicate was that the auditors requested to come into the HHSE offices as of YESTERDAY, to start the PHYSICAL INVENTORY COUNT of products and equipment. While it's correct to state that the inventory verification step has not yet started, it's not correct that the overall audit process has not yet started. As for yesterday's requested site visitation, HHSE managers determined that it would be chaotic to have them counting pallets in the middle of us live-streaming a Shareholder's Meeting and asking them to maneuver around the 108,000 DVD unit order that is currently blocking aisles and obscuring access to count products.
The full 2014 Financials and first three quarters of 2015 financials were delivered to the auditors over a month ago, following the final agreement and mutual acceptance of the engagement. Yes, at that time, HHSE was told that the entire process will likely take 60-days for completion, but not 60-days from NOW, because the process is already well underway.
As previously blogged, HHSE has been told that certain steps will minimize the auditor's notes on the Form 10, and HHSE would be required to conform to certain standards in order to receive limited footnotes from the auditors - and likely - limited commentary from the S.E.C. review of the Form 10-12(g). Those "recommendations" include:
a). Updated Film Library Report;
b). 2015 Tax Returns; and
c). Internal Procedures / Controls under Sarbanes-Oxley Act 404 Guidelines.
Over the past few weeks, HHSE completed the management tables elements for the updated Film Library Report (worksheets and presentation), and this item is already under third party review for a current valuation. Also, over the past few weeks, HHSE has begun assembly of a Controls Procedures Workbook for all operational and financial steps and strategies pursued by the Company. Lastly, the completion of the 2015 Tax Returns can only now commence, due to the timing of the year-end results (which took longer than management had hoped for due to the need to verify key third party payables and judgment balances).
The 60-day process with our auditors is well underway - and we are confident that the Form 10-12(g) will be filed prior to the Company's jaw-dropping line-up of major titles and major stars are revealed at Cannes. As will be demonstrated within the Auditor's Report portion of the Form 10, the commencement of date of the audit review and process will show the February (2016) timeline.
2). HOW WILL HHSE BE ASSURED THAT THE FINANCIALS ON THE FORM 10 ARE NOT "STALE" BY S.E.C. RULES?
In engaging the new auditors, HHSE has made a long-term commitment that is not limited simply to the 2014 and 2015 years and a Form 10 auditor's letter / report. We have asked the auditors to become a long-term member of the company's compliance and reporting team. As such, we have already included within the scope of services a Quarterly "review" of all 10-Q reports - which will make future year-end audits a far faster and simpler process. It has been determined that the Q1 results COULD also be subjected to the higher standards of "audit" as opposed to "review" if necessary, and that this additional step would be pursued if - and only if - something occurs that looks to jeopardize the planned Form 10 filing (which HHSE wants to occur prior to the Cannes Film Festival in May). The 2015 audit will go "stale" under S.E.C. rules at some point in mid-May (the precise date is subject to interpretations of guidelines). If the Form 10 is not filed by this S.E.C. "stale" financials date, then the Q1 results will be added to the Form 10 filing so that the financials meet the 135-day aging requirement. The Form 10 must contain the two, most recent years of full audited results... AND... the most recent ending period cannot be older than 135 days "aged".
So, unless an asteroid strikes Los Angeles and wipes out the firm that is review the Film Library Valuation company... or if Parkinson and Shefte are abducted by outer-space aliens and restrained from completing the SOX 404 report... or if the auditing company's building is sucked into a sinkhole... or any other such unforeseen (and extraordinarily unlikely) circumstance... then the HHSE Form 10 will include 2014, 2015 AND the full audited Q1, 2016 financials . Otherwise, we're on track. HHSE MANAGEMENT HAVE MADE THE COMMITMENT THAT THE COMPANY WILL NOT miss the filing of the Form 10 in the next few weeks. The CANNES title line up of high-profile productions is TRANSFORMATIVE and is the "Lionsgate" moment to take this company to heights that even the most optimistic of longs have not dreamed. We have made the commitment to make certain that the Company's shares are fully registered - to correspond with that time that the world's media and the world's major investment community - are looking directly at HHSE.
3). WHY ISN'T HHSE PROMOTING THE STOCK PPS NOW THROUGH I.R.?
As stated in the meeting, HHSE has spent tens-of-thousands of dollars over the past five years, hiring a wide range of "promoters" to help spread the word about the Company's achievements and opportunities - with the expectation that these activities will draw in new shareholders and ultimately impact the PPS. While these prior efforts HAVE generated results, the sustainability has never been long, as the charts show only a "spike" in PPS change after I.R. We have determined that sustained PPS growth is unlikely to occur UNTIL the Company files the Form 10.
HHSE is the only publicly-traded, full-service entertainment distributor whose shares are NOT yet fully registered. Accordingly, the PPS is suffering a horrible penalty of only trading at 3.2X Price-Earnings Ratio.... when the P/E for this market sector is 22X. There are a lot of major entertainment investor groups that have contacted HHSE with various opportunities for investment capital, growth opportunities and more. But without fail, the present lack of registration and auditing procedures stalls such deals. Fortunately, we are only a few weeks away from achieving this level of "Compliance Credibility." There is a widespread expectation that the HHSE PPS will jump rapidly following the Form 10 filing - and if this is contemporaneously timed with the major title reveals at Cannes - management believes that there are going to be some VERY, VERY HAPPY Shareholders at that time. And of course, the implementation of I.R. / P.R. to the investment community might finally make sense for that time frame as well.
4). ANGRY SHAREHOLDERS ARE THREATENING TO SELL BECAUSE HHSE HAS NOT YET RE-FILED THE FORM 10
One shareholder emailed that the SH Presentation was "a bunch of excuses." This comment ignores that the Company achieved RECORD REVENUES, RECORD PROFITS, massive DEBT REDUCTIONS and NO NEW STOCK EQUITY Transactions for the past eight months. Clearly, this individual - and possibly others - are single-issue shareholders. "If the Form 10 is not filed by the SH Meeting, then I'm selling my HHSE Shares." That's certainly the prerogative of any shareholder... to make an emotional decision to their own detriment. But, it is management's belief that selling shares NOW will create massive regret in just a few weeks time. Some shareholders are going to benefit wildly if:
* The filing of the Form 10 brings HHSE to industry P/E levels (6-X higher than current PPS trading);
* The Cannes major titles and stars generate X-millions in new sales for HHSE / MEDALLION;
* The momentum enables HHSE to "close" the funding and strategic partnerships that have been circling the Company for over a year; and,
* The consumer launch of VODWIZ is simultaneously launched, and quite realistically with 6,500+ titles ready to stream live to consumers this summer;
Shareholders are people, and people can be emotional. Accordingly, it would not be surprising if some shareholder's decided to throw-in-the-towel over the next few days because "we're not there yet." We get it. Target goal dates were not achieved, it's happened before, there always seems to be some unforeseen issue arise. We see how some Shareholders could grow weary. So what happens if someone decides to sell? Well, if they bought shares for more than $.01 each, that person will lose money on the sale....sort of a "self-inflicted wound" that only hurts them, and makes someone else very happy when the above achievements simultaneously occur. Selling shares now does not in any way "punish" HHSE management or impact the Company's operations. There are NO STOCK issuances in motion or even PLANNED. The Company is not selling shares and the management are not selling shares. Selling shares right NOW, just a few weeks from the "Lionsgate" A-HA moment for HHSE would be in management's opinion a move of "stupidity on an epic scale." But it's always a shareholder's prerogative to sell - or buy - whenever they want to, and for whatever reason they select. For every angry seller that hurts themselves by selling how.. there will be a super-happy (and arguably much smarter) shareholder taking their place.
The corporate achievements and major title growth are not years or months into the future. They are just a matter of weeks. So HHSE management advises shareholders to make whatever decision they feel is best suited for their needs or mood.
Despite having a record year of sales and profits in 2015, the HHSE stock PPS has still not seen much growth in recent months. Will this change with the achievement of the above benchmarks? Management certainly thinks so. But we don't control the market's reaction, so it's always possible that the stock price will not see a major and sustainable growth. It's the risk and evaluation that shareholder's need to make when selecting stocks for investment. Management's opinion is that HHSE stock SHOULD be trading at $.10 or higher. Management is taking the steps to make this pricing justifiable within the market. Will it occur? Only time will tell... but we won't have to wait long to find out.
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