Thursday, January 29, 2015
Nice Film Industry / Press Article on HHSE's Upcoming "THE ALGERIAN"
The topic of terrorist Sleeper Cells has never been more timely - and the press reaction to HHSE's upcoming "THE ALGERIAN" is already generating a LOT of coverage. Below is a reprint from the FEBRUARY (2015) edition of FILM: THE MAGAZINE (London). Hannover House has acquired the Worldwide exclusive distribution rights to the film. Through a joint-sales venture with THE LITTLE FILM COMPANY, this title will commence sales and licensing next week at the European Film Market (EFM) in Berlin. HHSE will release the film to theatres this Spring (precise release date still being coordinated with key theatre chains, to counter-program against major studio titles).
Wednesday, January 28, 2015
HHSE Leads Chart for Entertainment Stock Value!
Graham Financial Services, Inc., 2014 year-end analysis of 11-publicly traded Entertainment Stocks shows HHSE as the leading value.
HHSE COMMENTARY: We thank Paul Graham and Graham Financial Services for providing this annual summary of entertainment stocks. HHSE Management has received some emails from shareholders asking "why" the Company posted this chart, and why today, specifically? The answer is simple: we thought the chart was noteworthy and pretty clearly demonstrates, in hard numbers, that the stock is trading well below industry standards.
The Company acknowledges that HHSE is the only one of the above stocks trading on the OTC: Pinksheets exchange, and this could factor heavily in its current pricing. The Company also acknowledges that until the shares are listed on a higher exchange (which occurs following the current Form 10 filing), that some potential investors will not buy shares.
In respect of the Form 10 filing, the timing of today's post could be applauded, or criticized. Posting now, or posting later, would result in some shareholders being displeased either way.
Friday, January 23, 2015
Out of the door>> HHSE Records Record SALES with January Shipments!
Good morning HHSE Friends & Followers - In response to the Company's earlier announcement that January was shaping up into a RECORD month for the Company's core (DVD / Blu-Ray) business, some shareholders have asked for a breakdown of titles and placements.
Unlike some of the prior HHSE blog posts and forecasts, the information below are not "projections" of upcoming activities... but an actual out-of-the-door summation of shipments thus far for this month! SEVEN DVD titles (plus BluRay formats for "American Justice" and "Gabrielle"), makes for NINE new items shipping in a single month!
How does this compare to the TOTAL of new releases in 2013? How about 2014? The answer is impressive. HHSE had a total of EIGHT new titles in ALL of 2013, and FOUR new DVDs in ALL of 2014 (along with three books and one audio CD for a total of eight new releases).
So our January, 2015 product flow already EQUALS OR EXCEEDS the total of all product flow for each of the prior two years!
Is this an anomaly? Are those HHSE guys going to go on a six-month vacation now?
NO! New title releases already in preorder / solicitation for shipments* over the the next few months include:
FEBRUARY: Reach, Midnight Horror Show, Pappa Cap Urban Six Pack, The Weather Station
MARCH - Flesh for the Beast: Tsukiko's Curse, Of Sentimental Value, Vengeance II, The Congregation, Grim, Next Up
APRIL - Dinosaurs of the Jurassic, Doonby, Susie's Hope, On Angel's Wings, Red Dirt Rising, The Honeymoon,
MAY - Silent No More, Salvation, Surf Party: Summer Unleashed, Brutal Colors, Live at the Foxes Den, Frankenstein: Day of the Beast
PLUS - The Company, along with supplier-studio labels from Medallion Releasing, will be repricing and re-releasing TWENTY-THREE (23) ADDITIONAL ITEMS during this same time frame, priced for the WALMART, TARGET and BEST BUY Budget DVD Bins.
... Add in four SIGNIFICANT theatrical release titles this spring - which will add to a line up for SUMMER and early FALL - and it's easy to see that HHSE and Medallion are positioned to have about EIGHTY (80) titles during 2015... more than TEN-TIMES the revenue generating number of releases than each of the past two years! This rapid expansion of the Company's release slate is due to a variety of factors, not the least of which is the organization of Medallion Releasing - the recruitment of supplier studios to add these titles (all of which - and many more - are also part of the Company's VODwiz collection), and a focus on building the core business and core revenues so that the Company can thrive, grow and pay its obligations from revenues.
WATCH US GROW!
* Shipment month is usually a few weeks before "on sale" street dates
Unlike some of the prior HHSE blog posts and forecasts, the information below are not "projections" of upcoming activities... but an actual out-of-the-door summation of shipments thus far for this month! SEVEN DVD titles (plus BluRay formats for "American Justice" and "Gabrielle"), makes for NINE new items shipping in a single month!
How does this compare to the TOTAL of new releases in 2013? How about 2014? The answer is impressive. HHSE had a total of EIGHT new titles in ALL of 2013, and FOUR new DVDs in ALL of 2014 (along with three books and one audio CD for a total of eight new releases).
So our January, 2015 product flow already EQUALS OR EXCEEDS the total of all product flow for each of the prior two years!
Is this an anomaly? Are those HHSE guys going to go on a six-month vacation now?
NO! New title releases already in preorder / solicitation for shipments* over the the next few months include:
FEBRUARY: Reach, Midnight Horror Show, Pappa Cap Urban Six Pack, The Weather Station
MARCH - Flesh for the Beast: Tsukiko's Curse, Of Sentimental Value, Vengeance II, The Congregation, Grim, Next Up
APRIL - Dinosaurs of the Jurassic, Doonby, Susie's Hope, On Angel's Wings, Red Dirt Rising, The Honeymoon,
MAY - Silent No More, Salvation, Surf Party: Summer Unleashed, Brutal Colors, Live at the Foxes Den, Frankenstein: Day of the Beast
PLUS - The Company, along with supplier-studio labels from Medallion Releasing, will be repricing and re-releasing TWENTY-THREE (23) ADDITIONAL ITEMS during this same time frame, priced for the WALMART, TARGET and BEST BUY Budget DVD Bins.
... Add in four SIGNIFICANT theatrical release titles this spring - which will add to a line up for SUMMER and early FALL - and it's easy to see that HHSE and Medallion are positioned to have about EIGHTY (80) titles during 2015... more than TEN-TIMES the revenue generating number of releases than each of the past two years! This rapid expansion of the Company's release slate is due to a variety of factors, not the least of which is the organization of Medallion Releasing - the recruitment of supplier studios to add these titles (all of which - and many more - are also part of the Company's VODwiz collection), and a focus on building the core business and core revenues so that the Company can thrive, grow and pay its obligations from revenues.
WATCH US GROW!
* Shipment month is usually a few weeks before "on sale" street dates
Thursday, January 22, 2015
Thursday Items
Good Morning HHSE Friends & Followers - First of all, apologies are extended to all shareholders that have emailed Parkinson or Shefte the past few days and not gotten responses. As stated previously, the volume of new release orders - and the operational tasks in getting these manufactured, shipped and delivered on very specific time-frames - has been all consuming. Responding to calls and emails has been challenging.
So much of the Company's business plan for 2015 relies upon cash flow from these new orders, that fulfillment of them has taken priority. We will be back to quicker responses shortly.
Meanwhile, we have been asked to respond to a variety of questions / issues. While longer, more detailed responses are merited (and will be provided), for now, we can provide the following, brief summaries:
1). STATUS OF JSJ SHARES (recent issue that surprised HHSE management) - A resolution of this dispute is being discussed, still not finalized as of this morning.
2). CREDIT LINES - The credit facilities that collectively will finance the Company's new release activities (including theatrical activities) appear on track and solid. Individual details will be released upon approval of each of the three separate parties involved in three separate transactions that comprise the Company's overall needs as specified in the Form 10 filing.
3). FORM 10 DELAYS - Anything standing in the way of this release? Nothing that is not being already addressed, re: Credit Lines. The Form 10 will be released based on the 2012 and 2013 audits. The 2014 audit is not due until May 1st so it does not impact the Form 10 publication.
4). DEBT CONVERSIONS - There have been some predictions among critics that the Company will be pursuing a variety of debt conversions / dilutions. We would remind our shareholders that under the corporate by-laws, the Board of Directors has the authority to REDUCE the total Authorized Share Count (and this was pursued under a "suspension" of shares a few years back). But to INCREASE the statutory A/S requires the approval of a majority of shareholders. We do not feel that the majority of shareholders are in favor of authorizing more than the current 700-mm A/S count. Accordingly, management is statutorily restricted from exceeding the current share count until such time - if ever - that the majority of shareholders votes to approve such an action.
5). SHAREHOLDER'S MEETING - Management is planning to hold the annual shareholder's meeting, rather than issue a written report in lieu of such a meeting. At this time, it is likely to be held in either Los Angeles or Fayetteville, Arkansas - at the end of February. Per corporate by-laws, a formal announcement of date and location of the annual meeting of shareholders is required to be published at least 30-days prior to the meeting.
6). THEATRICAL ITEMS - Yes, HHSE is the distributor for "DARK AWAKENING" - the profoundly chilling new thriller from the executive producer of "THE RING" and the acclaimed visual effects master behind "X-MEN", "STAR TREK" and "OUIJA." Precise release dates and screen counts are being determined in conjunction with the key exhibitors. At present, the Company is looking at an APRIL theatrical date - and an AUGUST home video / VOD date. As the precise dates become locked with the key theatrical chains, this will be announced.
7). VODWIZ - While the management remains philosophically committed to the VODwiz roll-out to consumers, to be clear, this new venture has taken a backseat to the current priorities (shipments, credit lines, form 10 filing and new theatricals). As cash flow for the Company is improving (from the new release activities!), management intends to beef-up some staff to specifically handle the VODwiz consumer roll-out (and the operational steps required to upload all of the titles under contract for the service). Management is limited by the realities of a 24-hour day and the need to prioritize some projects over others - based on time sensitivities.
VIEW THE TRAILER AT: https://www.youtube.com/watch?v=vwPg2R8jNGU
So much of the Company's business plan for 2015 relies upon cash flow from these new orders, that fulfillment of them has taken priority. We will be back to quicker responses shortly.
Meanwhile, we have been asked to respond to a variety of questions / issues. While longer, more detailed responses are merited (and will be provided), for now, we can provide the following, brief summaries:
1). STATUS OF JSJ SHARES (recent issue that surprised HHSE management) - A resolution of this dispute is being discussed, still not finalized as of this morning.
2). CREDIT LINES - The credit facilities that collectively will finance the Company's new release activities (including theatrical activities) appear on track and solid. Individual details will be released upon approval of each of the three separate parties involved in three separate transactions that comprise the Company's overall needs as specified in the Form 10 filing.
3). FORM 10 DELAYS - Anything standing in the way of this release? Nothing that is not being already addressed, re: Credit Lines. The Form 10 will be released based on the 2012 and 2013 audits. The 2014 audit is not due until May 1st so it does not impact the Form 10 publication.
4). DEBT CONVERSIONS - There have been some predictions among critics that the Company will be pursuing a variety of debt conversions / dilutions. We would remind our shareholders that under the corporate by-laws, the Board of Directors has the authority to REDUCE the total Authorized Share Count (and this was pursued under a "suspension" of shares a few years back). But to INCREASE the statutory A/S requires the approval of a majority of shareholders. We do not feel that the majority of shareholders are in favor of authorizing more than the current 700-mm A/S count. Accordingly, management is statutorily restricted from exceeding the current share count until such time - if ever - that the majority of shareholders votes to approve such an action.
5). SHAREHOLDER'S MEETING - Management is planning to hold the annual shareholder's meeting, rather than issue a written report in lieu of such a meeting. At this time, it is likely to be held in either Los Angeles or Fayetteville, Arkansas - at the end of February. Per corporate by-laws, a formal announcement of date and location of the annual meeting of shareholders is required to be published at least 30-days prior to the meeting.
6). THEATRICAL ITEMS - Yes, HHSE is the distributor for "DARK AWAKENING" - the profoundly chilling new thriller from the executive producer of "THE RING" and the acclaimed visual effects master behind "X-MEN", "STAR TREK" and "OUIJA." Precise release dates and screen counts are being determined in conjunction with the key exhibitors. At present, the Company is looking at an APRIL theatrical date - and an AUGUST home video / VOD date. As the precise dates become locked with the key theatrical chains, this will be announced.
7). VODWIZ - While the management remains philosophically committed to the VODwiz roll-out to consumers, to be clear, this new venture has taken a backseat to the current priorities (shipments, credit lines, form 10 filing and new theatricals). As cash flow for the Company is improving (from the new release activities!), management intends to beef-up some staff to specifically handle the VODwiz consumer roll-out (and the operational steps required to upload all of the titles under contract for the service). Management is limited by the realities of a 24-hour day and the need to prioritize some projects over others - based on time sensitivities.
VIEW THE TRAILER AT: https://www.youtube.com/watch?v=vwPg2R8jNGU
Sunday, January 18, 2015
Sunday Thoughts - Pre-MLK Day
Greetings HHSE Friends & Followers - There's so much happening at Hannover House - both from a release standpoint to new ventures and corporate governance - that it can be daunting to follow for some shareholders. Over the past couple of weeks, there have been requests for HHSE to make predictions of Q1 / Q2 revenues, including title-specific forecasts.
As stated previously, we have found that title-specific forecasts can be a dicey subject to predict... so many factors can impact the retail market's receptivity to a title... from street date and pricing, to genre' and packaging. The biggest issue for non-blockbuster DVD and Blu-Ray releases seems to be selecting a release window with the least amount of similarly-themed competition.
Most of the titles that Hannover House distributes are - candidly speaking - titles that the major retailers COULD survive without carrying. Not that we want such an outcome, but that we must admit that shoppers at Best Buy are far less likely to boycott that chain if Best Buy decided NOT to carry "Valley of the Witch" as opposed to Best Buy deciding NOT to carry "The Avengers." The latter had huge box office momentum leading to its home video release; the former example did not. Accordingly, the strategy behind selecting new releases is a delicate dance, and one which must often be adjusted based upon the ever-changing competitive marketplace.
Listed below are FIVE (5) titles that HHSE will be releasing to theatres in the next few months - all of which will hit the home video market in Q3 or Q4. Below these theatricals is a list of SIX (6) titles that are considered to be the "locomotive" major theatrical titles for HHSE for late 2015 and into early 2016. These are much-higher profile titles than the Company has ever previously released... and several are "event-level" releases with the potential impact to elevate the Company's stature substantially.
Below the Theatrical Releases and the Film Productions are FIFTY-TWO (52) video releases that HHSE and / or Medallion Releasing are representing on an exclusive basis for all primary retailers and wholesalers. It's a LOT of product - five of which titles are shipping out RIGHT NOW to key accounts - and this video line up represents a very likely gross revenue target in the realistic-and-obtainable range of $8-mm. This forecast is NOT counting revenues from theatricals, VODwiz, publishing, international and production income - or from the other titles in the catalog (nor from those titles that are already acquired, but not yet listed below). It's a MAJOR leap forward for Hannover House to go from a boutique distributor - with only a handful of titles each year - to being a mini-major independent powerhouse, with 50+ titles in solicitation for the FIRST HALF of 2015. Very exciting times.
One title that you will not see in the listing of exclusive rights below is the Redbull Media House documentary, "ON ANY SUNDAY: THE NEXT CHAPTER." As most of you know, Hannover House released this film to more than 250-theatres, commencing November 7th, and the results were reasonably good (more than $500,000 in box office - very high for a motorsports documentary... # 2 for all time in this subgenre', in fact).
When the movie first opened theatrically, some shareholders began wondering about the film's potential value for HHSE onto Video and streaming media. Some vocal stock "critics" immediately marginalized any likely revenue impact for HHSE, a position with which HHSE managers did not disagree. Accordingly, HHSE did not release any revenue forecasts for this item's prospective video results, because the nature of the agreement with Redbull Media was non-exclusive, and divided the market into several segments (key accounts, specialty accounts, direct-mail, internet and streaming / VOD). The video rights offered to HHSE for this title represented the first time ever for Hannover House (and for Parkinson in 30-years in the home video industry with over 900-titles being released), in which the video rights being granted were "non-exclusive." Redbull made a case for specialty distribution and their own existing infrastructure and prior relationships. This was what was presented, take it or leave it.
After further consideration of the financial impact of taking on partial video rights to this title, HHSE lenders balked at the license fee size relative to the title's likely video revenues. Accordingly, Hannover House will not be representing this title for any form of home video release.
HHSE very much appreciated the opportunity to work with Redbull on the theatrical, and we wish them (and their other distributors) the best of success with the upcoming home video release. The release model for this title does not work for how HHSE is set-up, or for the lenders that would have been required to otherwise advance such a large license fee for rights.
Over then next few business days, HHSE will work with Redbull to move video order commitments over, and thus eliminate the non-exclusive video license fee obligation.
HHSE loves the video distribution business, but we cannot risk working capital, cash flow or debt financing. Not every deal that comes along will make sense for HHSE, and we have learned from prior mistakes (remember "Twelve"?), that paying a big license fee is not always a good idea for the Company.
* * * * *
Big stuff this coming (short) week... stay tuned! *(see bottom of blog)
Onward and Upward in 2015!
* * * * *
HHSE THEATRICAL RELEASES
DARK AWAKENING
THE ALGERIAN
BORRAR DE LA MEMORIA
THE WEATHER STATION
HHSE FEATURE FILM PRODUCTIONS
MOTHER GOOSE: JOURNEY TO UTOPIA
THE LEGEND OF BELLE STARR
THE SUMMONING
SHADOW VISION
CLOWN TOWN
SHUCK & JIVE
(Previously announced titles not currently in solicitation or set for theatrical include: Bonobos, Championship Soccer, Cowboys & Heroes, The Lion Prince, All-American Cowboy Pack, Family Movie Night, Martial Arts Marathon and six more budget re-issues from the HHSE Library).
* Footnote: Communications and Disclosure to Shareholders can be a challenging task to balance, and it's clearly impossible to ever please all shareholders. Today, some shareholders asked HHSE to remove the "Big stuff..." line in yesterday's blog, and instead, "just do it." Others said, "No, put it back in" because mom's cooking smells good. With respect to other posts, some have DEMANDED that HHSE use this blog to rebut the absurd criticisms of one particular chat board poster... and others have DEMANDED that we NOT rebut his misrepresentations "because it's not dignified to respond to an anonymous poster who refuses to proudly stand behind such statements." As there's no way to please everyone, HHSE will continue to ride the line in balancing the issues of disclosure / non-disclosure in this blog and other forums.
HHSE - MEDALLION - VIDEO TITLES IN CURRENT SOLICITATION / PRE-SALES
As stated previously, we have found that title-specific forecasts can be a dicey subject to predict... so many factors can impact the retail market's receptivity to a title... from street date and pricing, to genre' and packaging. The biggest issue for non-blockbuster DVD and Blu-Ray releases seems to be selecting a release window with the least amount of similarly-themed competition.
Most of the titles that Hannover House distributes are - candidly speaking - titles that the major retailers COULD survive without carrying. Not that we want such an outcome, but that we must admit that shoppers at Best Buy are far less likely to boycott that chain if Best Buy decided NOT to carry "Valley of the Witch" as opposed to Best Buy deciding NOT to carry "The Avengers." The latter had huge box office momentum leading to its home video release; the former example did not. Accordingly, the strategy behind selecting new releases is a delicate dance, and one which must often be adjusted based upon the ever-changing competitive marketplace.
Listed below are FIVE (5) titles that HHSE will be releasing to theatres in the next few months - all of which will hit the home video market in Q3 or Q4. Below these theatricals is a list of SIX (6) titles that are considered to be the "locomotive" major theatrical titles for HHSE for late 2015 and into early 2016. These are much-higher profile titles than the Company has ever previously released... and several are "event-level" releases with the potential impact to elevate the Company's stature substantially.
Below the Theatrical Releases and the Film Productions are FIFTY-TWO (52) video releases that HHSE and / or Medallion Releasing are representing on an exclusive basis for all primary retailers and wholesalers. It's a LOT of product - five of which titles are shipping out RIGHT NOW to key accounts - and this video line up represents a very likely gross revenue target in the realistic-and-obtainable range of $8-mm. This forecast is NOT counting revenues from theatricals, VODwiz, publishing, international and production income - or from the other titles in the catalog (nor from those titles that are already acquired, but not yet listed below). It's a MAJOR leap forward for Hannover House to go from a boutique distributor - with only a handful of titles each year - to being a mini-major independent powerhouse, with 50+ titles in solicitation for the FIRST HALF of 2015. Very exciting times.
One title that you will not see in the listing of exclusive rights below is the Redbull Media House documentary, "ON ANY SUNDAY: THE NEXT CHAPTER." As most of you know, Hannover House released this film to more than 250-theatres, commencing November 7th, and the results were reasonably good (more than $500,000 in box office - very high for a motorsports documentary... # 2 for all time in this subgenre', in fact).
When the movie first opened theatrically, some shareholders began wondering about the film's potential value for HHSE onto Video and streaming media. Some vocal stock "critics" immediately marginalized any likely revenue impact for HHSE, a position with which HHSE managers did not disagree. Accordingly, HHSE did not release any revenue forecasts for this item's prospective video results, because the nature of the agreement with Redbull Media was non-exclusive, and divided the market into several segments (key accounts, specialty accounts, direct-mail, internet and streaming / VOD). The video rights offered to HHSE for this title represented the first time ever for Hannover House (and for Parkinson in 30-years in the home video industry with over 900-titles being released), in which the video rights being granted were "non-exclusive." Redbull made a case for specialty distribution and their own existing infrastructure and prior relationships. This was what was presented, take it or leave it.
After further consideration of the financial impact of taking on partial video rights to this title, HHSE lenders balked at the license fee size relative to the title's likely video revenues. Accordingly, Hannover House will not be representing this title for any form of home video release.
HHSE very much appreciated the opportunity to work with Redbull on the theatrical, and we wish them (and their other distributors) the best of success with the upcoming home video release. The release model for this title does not work for how HHSE is set-up, or for the lenders that would have been required to otherwise advance such a large license fee for rights.
Over then next few business days, HHSE will work with Redbull to move video order commitments over, and thus eliminate the non-exclusive video license fee obligation.
HHSE loves the video distribution business, but we cannot risk working capital, cash flow or debt financing. Not every deal that comes along will make sense for HHSE, and we have learned from prior mistakes (remember "Twelve"?), that paying a big license fee is not always a good idea for the Company.
* * * * *
Big stuff this coming (short) week... stay tuned! *(see bottom of blog)
Onward and Upward in 2015!
* * * * *
HHSE THEATRICAL RELEASES
DARK AWAKENING
THE ALGERIAN
BORRAR DE LA MEMORIA
THE WEATHER STATION
HHSE FEATURE FILM PRODUCTIONS
MOTHER GOOSE: JOURNEY TO UTOPIA
THE LEGEND OF BELLE STARR
THE SUMMONING
SHADOW VISION
CLOWN TOWN
SHUCK & JIVE
(Previously announced titles not currently in solicitation or set for theatrical include: Bonobos, Championship Soccer, Cowboys & Heroes, The Lion Prince, All-American Cowboy Pack, Family Movie Night, Martial Arts Marathon and six more budget re-issues from the HHSE Library).
* Footnote: Communications and Disclosure to Shareholders can be a challenging task to balance, and it's clearly impossible to ever please all shareholders. Today, some shareholders asked HHSE to remove the "Big stuff..." line in yesterday's blog, and instead, "just do it." Others said, "No, put it back in" because mom's cooking smells good. With respect to other posts, some have DEMANDED that HHSE use this blog to rebut the absurd criticisms of one particular chat board poster... and others have DEMANDED that we NOT rebut his misrepresentations "because it's not dignified to respond to an anonymous poster who refuses to proudly stand behind such statements." As there's no way to please everyone, HHSE will continue to ride the line in balancing the issues of disclosure / non-disclosure in this blog and other forums.
HHSE - MEDALLION - VIDEO TITLES IN CURRENT SOLICITATION / PRE-SALES
Saturday, January 17, 2015
Saturday, Jan. 17 - Various updates
Greetings HHSE Followers - per prior commitments and as requested by some shareholders, here are some updates on a variety of key matters.
1). RECENT SHARE ISSUANCE - HHSE received an email with five document attachments (prior agreements and their interpretations thereof), with respect to the issuance of shares to JSJ last week that the Company was otherwise unaware of and did not authorize. The review of these documents will occur this weekend, and steps will be made to reconcile the dispute with JSJ and with Standard Registrar.
2) FORM 10 FILING - HHSE management has received much criticism regarding the "missed deadlines" for filing of the Form 10 Registration statement. Not hitting target dates has been met with gleeful exuberance by one specific HHSE critic, who has speculated on a wide variety of increasingly absurd reasons for the delay.
To be clear, here is the status:
a). HHSE completed a very detailed Form 10 Registration document weeks ago.
b). The Registration contained several core values and goals for the Company, the most crucial of which was to NOT issue new shares for debt reductions, but instead, to generate far greater revenues and use these to retire old debts.
c). To go from 6 new release titles in 2014 to 42 new release titles in 2015 (of which 26 are already in solicitation), requires substantial, upfront marketing expenditures for mastering, packaging, promotions and ads. It also requires substantial DVD and Blu-Ray replication expenditures and freight costs.
d). To meet these substantial revenue growth goals, the Company needs access to new capital. NOT debt capital (which goes to third parties and does not benefit the Company for new activities), but NEW capital for marketing & releasing costs.
e). The FORM 10 assumes that the Company will have sufficient funding to meet the ambitious release slate and to pay off old debts WITHOUT having to resort to the widely unpopular debt conversion transactions.
f). In late December, the Company closed (signed) agreements for three separate fundings which collectively meet all of the Company's goals and needs for the greatly enhanced release slate and new growth plans.
g). The first of these was slated to "fund" 11 days ago. The stated reason this did not fund in a timely manner was a concern for the attorney for this particular lender that some "old" U.C.C. liens were still on file against HHSE, despite these old loans having been paid off and evidenced as same. This was a surprising concern to HHSE since the terms of this funding did not relate to "old" catalog titles for HHSE, and would not be impacted if any of these old liens were exercised (if they were still valid, which they are not). As the need for immediate shipment of new titles could not wait for such issues any longer, HHSE instead structured a credit agreement with the lab directly, details which will be disclosed in a Form 8 filing next week. The need for this first element of the funding was replaced, and the Company has sent a termination notice to the lender.
h). The other two funding arrangements provide capital for new theatrical releases (including several "much larger" releases); however, no unusual demands or delays have been presented to suggest that these will not occur.
i). There is also a fourth major funding arrangement - specifically for the $12-mm "MOTHER GOOSE" project. But the cash flows and debt reduction schedules included in the Form 10 do not rely upon any revenues from "MOTHER GOOSE" to meet corporate targets.
j). If the Company files the Form 10 WITH all credit arrangements detailed, then this details a very clear road-map to great success and growth WITHOUT any need for old debts to be converted into shares.
k). If the Company files the Form 10 WITHOUT all credit arrangements assured, then the roadmap is less certain... the number of releases the Company could fund without outside capital is limited, and the patience of old creditors to wait for payments from smaller revenue income is less certain. There is only one person who would gleefully wish that the Company filed a Form 10 that included all of the mandatory disclosures and disclaimers about the Company's limitations under a tight-cash situation.
l). Shefte returns from L.A. Monday night. Over the next few days, a determination will be made as to the Company's confidence in the other funding structures - in order to enable the Form 10 with the credit arrangements to be published.
To avoid further criticism about "missing deadlines", there we be no further predictions of specific hours and days that the Form 10 will be released. We'll just DO IT and then everyone can see it. Our previous policy of being extremely open with information and internal goals, has been widely criticized because target dates cannot always be controlled solely by HHSE plans.
* * * * *
1). RECENT SHARE ISSUANCE - HHSE received an email with five document attachments (prior agreements and their interpretations thereof), with respect to the issuance of shares to JSJ last week that the Company was otherwise unaware of and did not authorize. The review of these documents will occur this weekend, and steps will be made to reconcile the dispute with JSJ and with Standard Registrar.
2) FORM 10 FILING - HHSE management has received much criticism regarding the "missed deadlines" for filing of the Form 10 Registration statement. Not hitting target dates has been met with gleeful exuberance by one specific HHSE critic, who has speculated on a wide variety of increasingly absurd reasons for the delay.
To be clear, here is the status:
a). HHSE completed a very detailed Form 10 Registration document weeks ago.
b). The Registration contained several core values and goals for the Company, the most crucial of which was to NOT issue new shares for debt reductions, but instead, to generate far greater revenues and use these to retire old debts.
c). To go from 6 new release titles in 2014 to 42 new release titles in 2015 (of which 26 are already in solicitation), requires substantial, upfront marketing expenditures for mastering, packaging, promotions and ads. It also requires substantial DVD and Blu-Ray replication expenditures and freight costs.
d). To meet these substantial revenue growth goals, the Company needs access to new capital. NOT debt capital (which goes to third parties and does not benefit the Company for new activities), but NEW capital for marketing & releasing costs.
e). The FORM 10 assumes that the Company will have sufficient funding to meet the ambitious release slate and to pay off old debts WITHOUT having to resort to the widely unpopular debt conversion transactions.
f). In late December, the Company closed (signed) agreements for three separate fundings which collectively meet all of the Company's goals and needs for the greatly enhanced release slate and new growth plans.
g). The first of these was slated to "fund" 11 days ago. The stated reason this did not fund in a timely manner was a concern for the attorney for this particular lender that some "old" U.C.C. liens were still on file against HHSE, despite these old loans having been paid off and evidenced as same. This was a surprising concern to HHSE since the terms of this funding did not relate to "old" catalog titles for HHSE, and would not be impacted if any of these old liens were exercised (if they were still valid, which they are not). As the need for immediate shipment of new titles could not wait for such issues any longer, HHSE instead structured a credit agreement with the lab directly, details which will be disclosed in a Form 8 filing next week. The need for this first element of the funding was replaced, and the Company has sent a termination notice to the lender.
h). The other two funding arrangements provide capital for new theatrical releases (including several "much larger" releases); however, no unusual demands or delays have been presented to suggest that these will not occur.
i). There is also a fourth major funding arrangement - specifically for the $12-mm "MOTHER GOOSE" project. But the cash flows and debt reduction schedules included in the Form 10 do not rely upon any revenues from "MOTHER GOOSE" to meet corporate targets.
j). If the Company files the Form 10 WITH all credit arrangements detailed, then this details a very clear road-map to great success and growth WITHOUT any need for old debts to be converted into shares.
k). If the Company files the Form 10 WITHOUT all credit arrangements assured, then the roadmap is less certain... the number of releases the Company could fund without outside capital is limited, and the patience of old creditors to wait for payments from smaller revenue income is less certain. There is only one person who would gleefully wish that the Company filed a Form 10 that included all of the mandatory disclosures and disclaimers about the Company's limitations under a tight-cash situation.
l). Shefte returns from L.A. Monday night. Over the next few days, a determination will be made as to the Company's confidence in the other funding structures - in order to enable the Form 10 with the credit arrangements to be published.
To avoid further criticism about "missing deadlines", there we be no further predictions of specific hours and days that the Form 10 will be released. We'll just DO IT and then everyone can see it. Our previous policy of being extremely open with information and internal goals, has been widely criticized because target dates cannot always be controlled solely by HHSE plans.
* * * * *
Thursday, January 15, 2015
Thursday AM - Updates
Greetings - shipments are underway, which have been completely demanding of management attention and energy (sales are the Company's life's blood, and videos are street-date sensitive).
Meanwhile, here's some super brief updates per shareholder email requests:
1). Share Structure - UNCHANGED. Company is NOT diluting, or doing debt conversions, and the officers are not selling. It's all chat-room nonsense. Transfer Agency is NOT "gagged" - although last month, there was a requirement for requests to be sent via email, which resulted in a slight delay while the identity of the emailer was being cross-checked against known manipulators. The email procedure was lifted after sufficient inquiries were tracked. UPDATE- noon CST - we've just been informed that Standard Registrar issued the JSJ shares (from the previously announced transaction) TWICE, which is a shock to us, and is being addressed immediately. HHSE will resolve this situation and update on this matter today. UPDATE: 9:00 pm CST - An error has occurred with respect to shares issued to JSJ. But the details are still undetermined as to where and how a mistake occurred due to the Company's inability to reach JSJ today to inquire as to how they could circumvent HHSE and request a share issuance directly from Standard Registrar. These items have always required Company and Board approval before the T.A. will act. At this time, after reviewing the documents with JSJ, HHSE cannot find a basis for any additional share issuances; but we will defer a final determination until after a consultation and review with JSJ. It is possible that JSJ is entitled to shares; if this is the case, and they can support this position, then HHSE will have erred in stating this morning that the share structure was unchanged. Although, to be clear, as of this morning's post, an unchanged share structure was certainly the Company's sincere belief. This situation will be further reviewed, resolved and posted on tomorrow (Friday).
2). Credit Lines - While the documents for the first of three credit facilities for HHSE were signed 10 days ago, the initial funding from this facility has not yet been released. The issue has to do with compliance in removing pre-existing (but no longer valid) U.C.C. liens. This is being resolved; Shefte is in Los Angeles this week, among other meetings, to get one of the prior security interest lien holder to get their filing "satisfaction" on record. The compliance of removing the U.C.C.s will activate the credit lines and enable the Company to file the Form 10 version that is preferred.
3). Titles / Shipments - The line-up of new titles / new orders / and confirmed skus at Mass Merchants for HHSE / Medallion titles is unprecedented. Details will be released when we're past the current shipping-fulfillment issues.
Meanwhile, here's some super brief updates per shareholder email requests:
1). Share Structure - UNCHANGED. Company is NOT diluting, or doing debt conversions, and the officers are not selling. It's all chat-room nonsense. Transfer Agency is NOT "gagged" - although last month, there was a requirement for requests to be sent via email, which resulted in a slight delay while the identity of the emailer was being cross-checked against known manipulators. The email procedure was lifted after sufficient inquiries were tracked. UPDATE- noon CST - we've just been informed that Standard Registrar issued the JSJ shares (from the previously announced transaction) TWICE, which is a shock to us, and is being addressed immediately. HHSE will resolve this situation and update on this matter today. UPDATE: 9:00 pm CST - An error has occurred with respect to shares issued to JSJ. But the details are still undetermined as to where and how a mistake occurred due to the Company's inability to reach JSJ today to inquire as to how they could circumvent HHSE and request a share issuance directly from Standard Registrar. These items have always required Company and Board approval before the T.A. will act. At this time, after reviewing the documents with JSJ, HHSE cannot find a basis for any additional share issuances; but we will defer a final determination until after a consultation and review with JSJ. It is possible that JSJ is entitled to shares; if this is the case, and they can support this position, then HHSE will have erred in stating this morning that the share structure was unchanged. Although, to be clear, as of this morning's post, an unchanged share structure was certainly the Company's sincere belief. This situation will be further reviewed, resolved and posted on tomorrow (Friday).
2). Credit Lines - While the documents for the first of three credit facilities for HHSE were signed 10 days ago, the initial funding from this facility has not yet been released. The issue has to do with compliance in removing pre-existing (but no longer valid) U.C.C. liens. This is being resolved; Shefte is in Los Angeles this week, among other meetings, to get one of the prior security interest lien holder to get their filing "satisfaction" on record. The compliance of removing the U.C.C.s will activate the credit lines and enable the Company to file the Form 10 version that is preferred.
3). Titles / Shipments - The line-up of new titles / new orders / and confirmed skus at Mass Merchants for HHSE / Medallion titles is unprecedented. Details will be released when we're past the current shipping-fulfillment issues.
Monday, January 12, 2015
Recent Video Hits make for Budget Bin Blockbusters!
Greetings HHSE Friends & Shareholders - as we move into the heaviest schedule in the Company's history for NEW RELEASE Videos... it's also important to note that the Company is in the midst of its most aggressive push ever for CATALOG SALES, V.O.D. and BUDGET BIN activities.
Listed below are FIVE (5) titles from one of the HHSE - Medallion Supplier Studios (Green Apple Entertainment), that are all being repriced right now for the $5.00 budget bins at WALMART, BEST BUY and TARGET. Each of these five items enjoyed significant sell-thru (and rental) success during their recent, initial DVD releases... and each of these is being released for the first time at these attractive consumer price points.
3 GEEZERS is a comedy starring TIM ALLEN ("The Santa Clause") and J.K. SIMMONS ("Juno") among other notable stars.
JULES VERNE'S MYSTERIOUS ISLAND is a sci-fi / fantasy feature that was a top rated movie last year on the SyFy Channel.
LOVE BEAT THE HELL OUTTA ME is an urban comedy and drama starring TERRENCE HOWARD ("Iron Man") and Glenn Plummer ("Speed").
WAR FLOWERS is a Civil War Action-Adventure, starring CHRISTINA RICCI ("Legend of Sleepy Hollow") and TOM BERENGER ("Platoon").
THE GHOSTS OF ST. AUBIN is an urban themed, supernatural love-story.
With four new supplier labels adding substantial product flow to the HHSE catalog (which is now over 200-titles by itself), the Company's push to create a strong presence each month in the DVD and BluRay "Budget Bins" could become a major revenue source for the next few years.
Listed below are FIVE (5) titles from one of the HHSE - Medallion Supplier Studios (Green Apple Entertainment), that are all being repriced right now for the $5.00 budget bins at WALMART, BEST BUY and TARGET. Each of these five items enjoyed significant sell-thru (and rental) success during their recent, initial DVD releases... and each of these is being released for the first time at these attractive consumer price points.
3 GEEZERS is a comedy starring TIM ALLEN ("The Santa Clause") and J.K. SIMMONS ("Juno") among other notable stars.
JULES VERNE'S MYSTERIOUS ISLAND is a sci-fi / fantasy feature that was a top rated movie last year on the SyFy Channel.
LOVE BEAT THE HELL OUTTA ME is an urban comedy and drama starring TERRENCE HOWARD ("Iron Man") and Glenn Plummer ("Speed").
WAR FLOWERS is a Civil War Action-Adventure, starring CHRISTINA RICCI ("Legend of Sleepy Hollow") and TOM BERENGER ("Platoon").
THE GHOSTS OF ST. AUBIN is an urban themed, supernatural love-story.
With four new supplier labels adding substantial product flow to the HHSE catalog (which is now over 200-titles by itself), the Company's push to create a strong presence each month in the DVD and BluRay "Budget Bins" could become a major revenue source for the next few years.
Friday, January 9, 2015
Friday Updates
Good morning HHSE friends and followers - here are a few updates of issues that Shareholders have asked about in the past day or two, presented here in no specific order:
1). CREDIT LINE - Agreements with lenders for three separate components of specific financing have been completed. One component is for a film licensing loan, secured against title specific receivables. A Second component is a blanket accounts receivable loan secured against new releases not previously covered by prior title specific security interests. The Third and final component is a theatrical services venture which provides operating overhead for the company in exchange for preferential fee structures and recoupment positioning on specific (upcoming / not-yet-announced) theatrical titles. As stated previously, details of these funding ventures are included in the Form 10 registration filing.
2). PRIORITY PROJECTS - Over the past few months, HHSE managers have been extraordinarily busy with a long list of projects - any one of which arguably could be considered a "priority" and "full-time" task. Ventures that have taken-up management time over the prior few months include:
a). Theatrical Release of "ON ANY SUNDAY" - obtaining, and holding, theatre screens for a motorsports documentary around Thanksgiving proved quite challenging and time-consuming;
b). Preparations for 26 Video Releases - the Q1 - through May 2015 video schedule required the mastering, packaging, announcements, solicitation and fulfillment of more video releases than the Company released in the prior two calendar years;
c). Form 10 Registration & Audits - The drafting and review of this voluminous registration statement was a daunting and time-consuming task. The level of detail, disclosure and disclaimers required far exceeds OTC market drafting requirements, requiring multiple drafts and redrafts. Fortunately, this is a one-time event, creating a mega registration for a 20+ year operating company.
d). Pursuit and Closing of Credit & Funding Ventures - The new release activities required substantial out-of-pocket costs for preparation. In order to maintain the new pace being established, the Company sought out the various credit funding opportunities as described above. Again, the volume of paperwork required for each funding venture was significant - and the time required was substantial.
e). Production & Pre-Productions for Locomotive Titles - With five announced production projects in various stages of pre-production, production or post-production, time and energy have also been required to maintain this momentum.
3). NEXT-UP PROJECTS - With the heaviest workload for the January DVD/BluRay shipments now underway - and the Form 10 document completed - the Company priorities can now be shifted back to: a). The VODWIZ launch; b). The Spring and Summer Theatricals; c). The Film Production Slate; and d). Strategic growth through continued expansion of the Company's core business.
The past few months have been manic... the workload at a frantic pace, and frankly, too much for too few to handle sustainably. The cash flow from the current (record!) sales of core video products will enable HHSE to seek a few, top-shelf managers to handle divisional activities that require full-time focus. The sales results that Tom Sims and his sales support staff have begun to generate is proof that competent managers handling VODWIZ, Productions, Corporate Governance and Theatrical are each merited and are each likely to elevate the Company to a new level of revenues and efficiencies.
Deadlines - even self-imposed and voluntary ones - should not be missed (or, perhaps, not announced); but even the world's most competent managers are still limited to functioning within a 24-hour day, and as such, even the best are limited in their ability to handle everything under the sun on their own or with a limited staff.
HHSE managers acknowledge that many of our shareholders are frustrated, angry and impatient with respect to the missed date goals in filing the Form 10 registration. HHSE clearly missed-the-mark on how time-consuming and complex that project would prove to be - especially in the midst of all of the other time-consuming and complex projects that have been described above (but which have contributed to re-positioning the company for a great future). While HHSE managers cannot predict the future price of the stock, we can predict and state that the actual activities of the Company are moving in a positively upward trajectory. Each of the corporate governance goals set forth by the Company will be fulfilled, and we hope that the stock price will follow in the logical ascension with the current growth in revenues.
Have a great weekend... meanwhile, here's "teaser art" on a few of the already announced limited-release theatrical titles for this Spring (home videos in Summer / Fall 2015).
1). CREDIT LINE - Agreements with lenders for three separate components of specific financing have been completed. One component is for a film licensing loan, secured against title specific receivables. A Second component is a blanket accounts receivable loan secured against new releases not previously covered by prior title specific security interests. The Third and final component is a theatrical services venture which provides operating overhead for the company in exchange for preferential fee structures and recoupment positioning on specific (upcoming / not-yet-announced) theatrical titles. As stated previously, details of these funding ventures are included in the Form 10 registration filing.
2). PRIORITY PROJECTS - Over the past few months, HHSE managers have been extraordinarily busy with a long list of projects - any one of which arguably could be considered a "priority" and "full-time" task. Ventures that have taken-up management time over the prior few months include:
a). Theatrical Release of "ON ANY SUNDAY" - obtaining, and holding, theatre screens for a motorsports documentary around Thanksgiving proved quite challenging and time-consuming;
b). Preparations for 26 Video Releases - the Q1 - through May 2015 video schedule required the mastering, packaging, announcements, solicitation and fulfillment of more video releases than the Company released in the prior two calendar years;
c). Form 10 Registration & Audits - The drafting and review of this voluminous registration statement was a daunting and time-consuming task. The level of detail, disclosure and disclaimers required far exceeds OTC market drafting requirements, requiring multiple drafts and redrafts. Fortunately, this is a one-time event, creating a mega registration for a 20+ year operating company.
d). Pursuit and Closing of Credit & Funding Ventures - The new release activities required substantial out-of-pocket costs for preparation. In order to maintain the new pace being established, the Company sought out the various credit funding opportunities as described above. Again, the volume of paperwork required for each funding venture was significant - and the time required was substantial.
e). Production & Pre-Productions for Locomotive Titles - With five announced production projects in various stages of pre-production, production or post-production, time and energy have also been required to maintain this momentum.
3). NEXT-UP PROJECTS - With the heaviest workload for the January DVD/BluRay shipments now underway - and the Form 10 document completed - the Company priorities can now be shifted back to: a). The VODWIZ launch; b). The Spring and Summer Theatricals; c). The Film Production Slate; and d). Strategic growth through continued expansion of the Company's core business.
The past few months have been manic... the workload at a frantic pace, and frankly, too much for too few to handle sustainably. The cash flow from the current (record!) sales of core video products will enable HHSE to seek a few, top-shelf managers to handle divisional activities that require full-time focus. The sales results that Tom Sims and his sales support staff have begun to generate is proof that competent managers handling VODWIZ, Productions, Corporate Governance and Theatrical are each merited and are each likely to elevate the Company to a new level of revenues and efficiencies.
Deadlines - even self-imposed and voluntary ones - should not be missed (or, perhaps, not announced); but even the world's most competent managers are still limited to functioning within a 24-hour day, and as such, even the best are limited in their ability to handle everything under the sun on their own or with a limited staff.
HHSE managers acknowledge that many of our shareholders are frustrated, angry and impatient with respect to the missed date goals in filing the Form 10 registration. HHSE clearly missed-the-mark on how time-consuming and complex that project would prove to be - especially in the midst of all of the other time-consuming and complex projects that have been described above (but which have contributed to re-positioning the company for a great future). While HHSE managers cannot predict the future price of the stock, we can predict and state that the actual activities of the Company are moving in a positively upward trajectory. Each of the corporate governance goals set forth by the Company will be fulfilled, and we hope that the stock price will follow in the logical ascension with the current growth in revenues.
Have a great weekend... meanwhile, here's "teaser art" on a few of the already announced limited-release theatrical titles for this Spring (home videos in Summer / Fall 2015).
Thursday, January 8, 2015
Now Shipping! "AMERICAN JUSTICE" - First of Five Major Video Releases!
Good Morning HHSE Friends - Exciting morning already, as the first of the major shipments of our five significant January / February titles is underway. Orders for "American Justice" to Walmart USA, Walmart Canada, Redbox, Family Video and multiple other major accounts have commenced shipment and should be fully completed by Tuesday. "Grand Champion" shipments to Walmart started yesterday, and "Sunshine" and "On Any Sunday" are on track for shipments next week. "Valley of the Witch" and "Asalto Al Cine" are slated for shipment during the week of Jan. 19 - 23.
The manufacturing and fulfillment of these orders is not dependent upon the closure of the Company's recently signed credit line; however, the substantial accounts receivable being generated will definitely improve the Company's financial position.
With respect to the credit line, the documents were fully executed last Tuesday and HHSE is awaiting release of the initial traunch of funding.
SHARE STRUCTURE - No changes, no new issuances. As stated, the Company will advise if any new activities are PLANNED and will be obligated to report if any ACTUAL CHANGES in share structure and the total of shares outstanding has occurred.
VODWIZ LAUNCH and FORM 10 FILING are each still progressing. Cannot specify the precise hour, day, for the publication of each at this moment. Updates tomorrow.
The manufacturing and fulfillment of these orders is not dependent upon the closure of the Company's recently signed credit line; however, the substantial accounts receivable being generated will definitely improve the Company's financial position.
With respect to the credit line, the documents were fully executed last Tuesday and HHSE is awaiting release of the initial traunch of funding.
SHARE STRUCTURE - No changes, no new issuances. As stated, the Company will advise if any new activities are PLANNED and will be obligated to report if any ACTUAL CHANGES in share structure and the total of shares outstanding has occurred.
VODWIZ LAUNCH and FORM 10 FILING are each still progressing. Cannot specify the precise hour, day, for the publication of each at this moment. Updates tomorrow.
