1). BERLIN / EFM MARKET
a). Sales Status for International Licenses; Meetings were held with buyers representing fourteen key territories, with a primary focus being on licenses for the recently completed feature, THE RIOT ACT. Sales have been consummated in three of these territories, with "offers" expected from six additional markets. There is an outreach campaign in motion to reach buyers from another 40+ territories for which Berlinale' meetings did not occur.
b). New Programming Acquisitions; The company acquired the USA Distribution rights to four commercial titles at Berlin. In order to best position these films, the formal announcements for each will be individually released and tied-into the company's strategic schedule.
c). Financing Partners ("Meltdown" and "Mother Goose"); It could jeopardize the current negotiations and documentation process to provide information on major film financing at this time. However, "deals" were made regarding the financing of "MELTDOWN" at USD $12-mm and "MOTHER GOOSE: JOURNEY TO UTOPIA" at USD $5-mm. Both of these films fulfill one of the key aspects of the HHSE "modified business model" - which calls for a modest number of LOCOMOTIVE level tent-pole features per year, and a modest number of "specialty cinema" features (but NO more "B-minus" indie horror type films) - and the focus on the launch of the MyFlix streaming site.
d). New MyFlix Supplier Studios; Fourteen (14) new supplier-studio partners have agreed to support the launch of MyFlix at EFM. These suppliers collectively represent an additional 800+ titles; as per the existing policy with MyFlix supplier partners, each will be announced individually and formally via a wire-services press announcement.
2). CORPORATE ENDEAVORS
a). Status of Year-End (2018), Audits & Form 10; authorized to publicly state that this important corporate filing is "on schedule."
b). Analysis of S-1 Venture and impact to HHSE; HHSE has been contacted by multiple venture capital partners, investors and funds expressing their support of buying significant positions into HHSE following the filing for the Form 10 and S-1. There is a total of USD $8-mm potentially available to the company under the S-1 offering, through block offerings of new issues at $.03, $.05 and $.08 per share. A modest "test" of HHSE pricing resistance occurred last July whebn a relatively modest amount of buying pressure about $120,000 (8-mm shares) was conducted last July by one major investor, which buying pressure caused the HHSE stock price to literally DOUBLE in only a few days... accordingly, there is a reasonable basis to anticipate that buying pressure of $1.5-mm initially (i.e., 50-mm S-1 shares at $.03 each) would likely result in a much higher PPS than $.03 / share if purchased on the open market. Therefore the S-1 block pricing - which is CURRENTLY a premium to today's market price of shares - is still a much better deal for these major purchasers than if the same dollar volume were run through the open market. Additionally, as is the structure of a S-1 Registration, the net sales proceeds go to the issuer (HHSE) for corporate uses and endeavors... whereas stocks traded on the open market benefit only the direct participants of a particular trade transaction. The second block of S-1 shares is 50-mm at $.05 each, and the third and final block of shares is another 50-mm at $.08 each. HHSE feels that the first block of shares is likely to sell very quickly based upon current inquiries... and that these proceeds will be very helpful in building momentum and consumer participation for the MyFlix venture, as well as for general operations and some payables management.
c). Update on Shareholder's Meeting (April 5, Chicago); It should be noted that the April 5 meeting at the Hyatt Regency Chicago will actually start at 3-pm Central Time. The prior announcement listed 2-pm Central Time, which could result in a trading advantage for attendees during regular market hours. Accordingly, by starting the meeting at 3-pm, any "news" of a previously non-public nature can be posted to all shareholders over the weekend, prior to the opening of the next market day of trading.
d). HHSE Stock Buy-Back / Return to Treasury. In a private and direct transaction, HHSE has just completed the purchase / buy-back of 500,000 common stock shares at $.013. These shares will be returned to treasury, and removed from the current issuance summaries.
3). LEGAL ISSUES & UPDATES
a). "Stay" Motions in foreign / sister state judgments; With Parkinson now back from the Berlin / EFM market, the filings to "stay" all actions in the cases of dubious foreign judgments will be promptly filed in the Washington County Courts in Arkansas. These include: LEWIN, JSJ and BEDROCK. There remains no collection efforts in Arkansas by ORIGIN (Texas) at this time, reducing the urgency to address this particular matter. REVISED (UPDATED 2-20-2019 at 5:45-pm Central). Shareholders have asked for updates / clarifications about two legal issues: The Crimson case (L.A. Superior Court) and a new Bedrock filing (Washington County, Arkansas). The Crimson case has been DISMISSED and there is no "status conference" tomorrow or trial next week; accordingly, we did not feel it merited mentioning in the blog today. With respect to BEDROCK, an unaffiliated third-party garnishee (Regal Entertainment) has filed a motion for dismissal of the Bedrock levy, on the basis of excusable neglect and non-affiliation. Again, because this was not a filing that impacted HHSE's position (and pending motion for dismissal), we did not feel it merited mentioning in this blog today.
b). General Response / Reaction to false narrative and chat board silliness; As has been proven in four prior court cases, Producers that "invent" false claims of monies due - despite clear accounting evidence to the contrary - have never once prevailed. It came to HHSE's attention that a representative of Royal Blue Pictures ("Gabrielle" and "Brutal Colors") has made false and disparaging comments on a stock chat board, which incorrectly state that HHSE owes them money. As per the terms of the contracts, this producer (and any other) are entitled to royalties on ACTUAL sales, not on the value of gross shipments before returns and costs. When a title like "BRUTAL COLORS" gets an order from Walmart for 20,000 units... that does NOT mean that $140,000 is now DUE to the producer, despite that figure being the value of the units multiplied by the average wholesale price. What it means is that this is a STARTING point... which will be reduced by virtue of UNSOLD / RETURNED units, manufacturing costs, freight, HHSE sales fee on "net" units sold and other marketing costs. In the case of "Brutal Colors" which had a greater than 75% "returns" rate for unsold shipments, the net monies are <negative> (meaning that the total costs to place the units exceeded the actual "net" purchase revenues of units by consumers). The corporate decision to STOP selling "micro-budgeted" horror films is borne by the dual realities that: 1). Such titles are NO LONGER commercially viable; and 2). The Producers of such titles tend to be inexperienced and often delusional. The new business model for HHSE - involving only higher-end features for production, and specialized "art" cinema fare for targeted release - circumvent both issues of sales viability and supplier sophistication. If the representative of Royal Blue Pictures persists in making false and damaging claims against HHSE on the stock chat-boards, we will pursue our rights and remedies for damages as well as judicial declaration for repayment of the funds that HHSE invested in the marketing of "Brutal Colors."
4). MYFLIX SPECIFIC NEWS
The right idea at the right time! If ever affirmation were needed as to the viability of the MyFlix venture, it was delivered quite enthusiastically at the Berlin / EFM market. Fourteen out of Fifteen supplier meetings resulted in a "yes, we want to participate" - with only ONE supplier saying, "no, we are keeping our titles available ONLY on our own streaming platform" (which, in that particular case, their streaming site has only 110 titles... which is hardly a solid motivation for a consumer to buy a monthly subscription - in HHSE's opinion!). What is CLEAR to those on the front lines is that DIGITAL STREAMING is the new medium for delivery of MOST entertainment... and is growing exponentially each year. "Physical" DVDs, BluRays and UltraHD discs are only working now for MAJOR THEATRICAL TITLES or SPECIALIZED RELEASES. The former "impulse" DVD business of a Walmart consumer (for instance) seeing an attractive DVD box and saying, "heck, $9.96 is a fair price!" are pretty much over... now that these same shoppers recognize that $10 bucks will get them a full MONTH of programming on Netflix, with over 1,200 titles... HHSE is adapting by doing what NO OTHER MEDIA COMPANY has done: consolidating almost EVERY indie supplier (and a few Major Studios) into a one-stop streaming site: MyFlix. We are quite confident that this is going to be the huge locomotive that pulls through everything else at HHSE!
The POTTSDAMER PLATZ in Central Berlin is sort of "ground zero" for the EFM and Berlinale' Festival. All of the theatres showing films are located in the Pottsdamer Platz area... which prior to the fall of the Berlin Wall in 1989, was a large "rubble" field from World War II damage.
All sorts of movers-and-shakers were in attendance at the EFM, with 22-representatives from AMAZON and 45-representatives from NETFLIX adding a "streaming" vibe to the event!
Many world premieres were held at EFM, including this Japanese drama, 37 Seconds, which won multiple prizes at the Festival:
https://www.japantimes.co.jp/culture/2019/02/17/entertainment-news/japanese-director-hikaris-37-seconds-wins-prizes-berlin-film-festival/#.XG2NTaJKiUk
Consumers and the public could buy tickets to some EFM Screenings at the Arkaden Mall located in the heart of Pottsdamer Platz.
The iconic tower at Alexander Platz was about 2.8-miles east of Pottsdamer Platz and the EFM.
Berlin is abundant with museums, history and iconic sites, including this partially destroyed church (damaged from World War II bombings)
The Infamous BRANDENBURG GATE is located on the eastern edge of the enormous Teagarden Park in central Berlin... and marked one of the more inconic sites of the former BERLIN WALL and revolution to tear it down in 1989.
HHSE CEO Eric Parkinson was an invited VIP participant to the "EFP European Shooting Stars" roundtables during EFM. This was a forum with TEN (10) rapidly rising stars from countries throughout Europe, that had 10-minutes of discussion with some of the world's top producers, directors and casting directors.
Despite freezing rain on most days, Consumers flocked to catch glimpses of major stars and the excitement of Berlinale - some are pictured here getting a family shot by a local Polizei.
The primary location for EFM meetings was the GROPIUS BAU building. However, overflow space was also held at the Marriot in Pottsdamer Platz, and "unofficially" most of the major studios held suites at the adjacent Ritz Carlton.
Eric Parkinson of HHSE attended six evening screening events, however, only "EASY LOVE" was chosen as a commercial option for the USA market.
HHSE CEO Eric Parkinson with Inspiration Films' Grant Bradley at the Ritz Carlton (Grant provided financing for "The Pilgrim's Progress" and additional faith-and-family films coming in 2019 / 2020 from Inspiration Films).
The GROPIUS BAU building was the primary EFM host location.
Eric Parkinson / EFM Credentials & Security Badges (one for general access, one as an authorized and accredited Film Buyer).
GROPIUS BAU consists of studio-supplier-seller booths around the central lobby, as well as in a large concentric hallway that encircles the entire building.