Year-End OTC Filing and more.

Greetings and Happy Monday HHSE friends and new followers - the first piece of news is that our 12-31-2020 year end filing with the OTC Markets will be delayed from posting until Tuesday, pending third party verifications of balance sheet adjustments. Under our new accounting procedures and guidelines (to conform to fully reporting standards), significant items now require third party verifications. We will still be quite early in beating the mandatory year-end filing dates - but wanted to share this update with our shareholders as we had planned to make this 12-31-20 filing as of last Friday.   UPDATE:  Tuesday evening (9:45-pm CST) - we are awaiting return of the converted tables & financials for the SEC Edgar XBRL formatting. This is a requirement of Edgar reporting;  however, it's not a requirement for the OTC Markets.  Accordingly, if this formatting is not ready by tomorrow morning, we will release the 12-31-2020 financials FIRST to the OTC markets (in a PDF form) to be followed by the S.E.C. Edgar filing with the XBRL formatting. Apologies for this delay, but our compliance supplier (M2) is in the midst of a corporate office move this week. UPDATE: Wednesday (noon Central time) - HHSE has been advised that both OTC and SEC Edgar will require the company to add appropriate footnotes of explanation for all material changes to the company's balance sheet which were made as of 12-31-2020 (which include adjustments for verified accounts receivable, payables, capitalized costs, production investments and other assets impacted following audit review activities). We will post the 12-31-2020 year-end report to the OTC Markets as soon as this is complete... possibly later today;  SEC Edgarized version will be released tomorrow. 

Also, as opportunities sometimes arrive unexpectedly, a new and funded feature production manifested this past week for HHSE - which will perfectly bridge the time window open between “Wildfire” and “Belle Starr.” The concept and package are superb, and we feel very confident in the film’s commercial prospects. It’s more evidence of the saying that “the harder you work, the luckier you get.” 

And lastly, congratulations to our friend ISAAC CHUNG, writer-director of “Minari” - on being a Golden Globe winner Sunday night. Isaac and his team were shooting side-by-side in Eastern Oklahoma while HHSE was making “Wildfire” with Snowy Morning, Inc. We even shared some of the same crew members and suppliers. It’s great to see the good guys winning! 

More coming soon...

The Big Short > The Big Squeeze... and a righteous victory over stock manipulators

Greetings HHSE Friends & Followers - For years now, HHSE has been a proven cash-cow for short-sellers and those engaged in  “boxing” the bid-ask spread with trade strategies and computer algorithms. This has been fertile grounds for those near (or past) the line of stock trading legalities... as their strategy only collapses if the buying pressure for HHSE significantly increases, or if the spread is minimized when the PPS is over $.02 / share.  

About two weeks ago, HHSE stock began to experience a 10-fold increase in daily volume and a PPS improvement of more than 80%.  This new interest in HHSE is being fueled by a myriad of market and “real-world” factors, including excitement for the company's new filings and the launch of the MyFlix multi-studio platform (at a moment when streaming services are a consumer rage).

Unfortunately, as is often the case in the market, when some shareholders flourish, others may flounder... and the recent buying volume of 45-mm shares in a short time frame proved that the "box strategy" to suppress HHSE can be defeated. 

This is somewhat reminiscent of what has occurred recently with GAMESTOP and AMC Entertainment - two stocks where the naysayers and manipulators had previously flourished by spreading a foundation of falsehoods and "sky is falling" predictions while short-selling the equity.  Fortunately, this "Big Lie" was seen in its truth as a being a "Big Short" (see charts below) - and a cavalry of independent traders turned it into the "Big Squeeze."  Short sellers were forced to cover their negative bets, and indie traders made billions as a result. 

 

Now, HHSE is facing new pressure from these professional naysayers. No, it's not any pressure from the obvious falsehoods of the "sky is falling" by trying to equate the personal financial reorganization of one of the officers as being somehow impactful or the same for the company (see further information below).  

No, the short-sellers have gotten more desperate than simply using their tired misinformation campaign.  The short-sellers are in a panic to protect their bet - which Sage investors have told HHSE that they calculate the total short position to be in excess of ONE-HUNDRED-MILLION (100,000,000) HHSE shares.  The recent PPS improvement and buying volume for HHSE proves that the short-sellers could be easily squeezed and forced to cover at $.05 or higher.  So, they are having to step-up their game.  But if success is the best revenge, a suggested new effort by HHSE LONGS and new buyers to squeeze the naysayers into covering HHSE at a premium seems like a great way to start this year. 

HHSE is now informed that absurd misinformation has been fed to E-Trade and TD Ameritrade against HHSE, as a move to suppress the accessibility to new buyers for the stock.  A formal complaint has already been filed with E-Trade, and a new complaint will be posted today with TD Ameritrade - as HHSE has received a full bill-of-health from the Securities and Exchange Commission to show that no "real world" rationale exists for these trading platforms to put forward obstacles to ON-LINE buying (HHSE).  Essentially, both trading platforms are currently requiring that ON-LINE buyers for HHSE "call in to place an order with a broker" as opposed to the simpler / faster method of electronic self-service. The net effect is to stifle buying, while encouraging selling... an obvious advantage to the short-sellers.

If these arbitrary buying hindrances against HHSE are not promptly removed by E-Trade and TD Ameritrade, HHSE will also use its extensive D.C. political connections to seek Congressional and D.O.J. assistance.

In the meantime... it's clear that we have the short sellers running scared.  It's clear that their goal is to HOPE to persuade exhausted longs into selling to them cheap (to cover the short position). And it's clear that solidarity of buyers can beat them at their game... after all, even GAMESTOP is surging yet again on the strength-in-numbers momentum!

As a sage trader once said at one of the  HHSE shareholders meetings:  Stay Long, Stay Strong!  HHSE will prevail!

* * * * *

As mentioned above, some shareholders have asked HHSE why the "creditors list" for the Fred Shefte personal bankruptcy lists a large number of parties who are not now - and in many cases have never been - HHSE creditors.  In speaking with Shefte's personal bankruptcy counsel, he was advised to list ANY parties that he thought could, in theory, eventually choose to file a lawsuit claim against Shefte. Rather than limit the list to actual debts or to parties for which Shefte holds a direct obligation, they instead went back to list items over 14-years old, including fully resolved disputes and parties for which no dispute ever existed. It's an absurdly over-reaching list which does not even acknowledge the 4-year statute of limitations in reaching back in time - and instead lists pretty much anyone Fred Shefte ever spoke with relating to a Hannover House project. 

Now, what is the "real world" impact of Shefte's personal bankruptcy for those actual and current disputes? For HHSE it's a non-issue, excepting for the potentially positive impact of the "one-judgment rule" which may provide a basis for HHSE to be dismissed in some matters.  So when the professional naysayers try (YET AGAIN!) to say that the "sky is falling" (their laughable, ten-year go-to bash), it's just more nonsense designed to try to discourage the one-thing that will KILL their position:  buying pressure. 

As for the Fred Shefte owned officer-affiliate shares of HHSE, a simple review of the rules, laws and regulations governing the sale restrictions for 144 shares will show that these shares cannot be liquidated in a bankruptcy. There is a mountain of S.E.C. rulings and court precedents to show that officer-owned shares - which are by law restricted from sale - cannot be sold, pledged, assigned, hypothecated or in any way transferred outside of the limitations of Rule 144 of the Securities and Exchange Act of 1933. The professional naysayers suggesting that Shefte's shares will be sold under the bankruptcy are trying to imply that his 6.5-million shares will be flooding into the open, consumer market. This is not the case and it would not be legal under Federal Securities Laws. If it were legal, public company officers would print themselves billions of shares of stock and use it as currency to pay personal debts. It's just another absurd lie from a stock manipulator to suggest otherwise. 

Don't buy into more of their "Big Lies" to cover their "Big Short."  Those professional naysayers need to be chased away...

ONWARD!

Marketplace Paradigm Shift Impacts Critical Timing for HHSE & Major Studios

 Greetings HHSE Friends & Followers - the broadcast of the Superbowl earlier this month resulted in a surprise to many in the entertainment industry, with the MARCH 2021 announcement of a "Paramount" branded streaming service. Most insiders knew that this move was previously not expected for several more years, due to the limited library of Paramount titles not already under license to existing services, or to affiliate Viacom entity CBS (via CBS All Access). 

But we are not living in last year's marketplace... and the ongoing impact of COVID functionally shutting down movie theatres as a revenue stream has forced a quick rethinking of strategies for all of the major studios.  DISNEY, WARNER and UNIVERSAL have already blazed a path towards improved profitability by restructuring the theatrical release windows previously held for the exhibition industry... instead now launching "day-and-date" (or very shortened theatrical first-look windows), before digital streaming onto their own, proprietary studio labels.  

As mentioned in prior blogs here, DISNEY stepped up first with the live action MULAN skipping theatres and ultimately generating over $300-million in direct-to-consumer digital revenues (while incurring NO theatrical P&A expenses and not having to endure "splitting of the box office revenues" with the theatres).

More recently, Universal partnered with Netflix (International) to squeeze the Christmas theatrical release date for the Tom Hank's "NEWS OF THE WORLD" into a 3-week race to digital streaming... again to realize far greater bottom line results than sums projected if the film had been handled through traditional release windows in a non-Covid marketplace.  The third paradigm Earthquake was triggered with the Warner Brothers announcement of simultaneous theatrical release openings with premieres on their HBO Max streaming division.  SO - in today's marketplace (with functionally no theatrical revenues as the locomotive for a film's income stream), it's not a surprise that Paramount would be inclined to accelerate its launch of a studio-branded streaming service. 

All of these factors - and the shifting paradigm of how consumers are viewing entertainment - are driving the industry and market enthusiasm for the upcoming MyFlix service and launch. The right place and right time are now, here, and with MyFlix. So, this is further validation of our current HHSE path.

Hold tight... and chill the champagne (metaphorically).

OTHER ITEMS OF INTEREST:

Over the past two weeks, shareholder emails have posed additional questions and items of interest, which we will attempt to address below.

1).  NEW RELEASE ITEMS (PHYSICAL HOME VIDEO)  - yes, despite the primary focus for the company moving to MYFLIX, the slate of BluRay and other home video releases mentioned last Fall will still be proceeding. The delay has been market-driven, as the key retailers that are still successful with physical BluRay and DVD sales (e.g., Best Buy and Target as the primary retailers) are still in slow-mode for adding secondary titles.  We have been told that shelf-space and new release receptivity will being to open up this summer... and the slate of seven HHSE titles that have functionally been on hold (for about 18-months thus far), will begin to see retail light at that time.  Again, this is all part of the COVID driven retail issues.  Industry statistics are showing a rebound for some aspects of the physical home video market (especially BluRay), as pride-of-ownership and the quality-of-experience available on a BluRay (vs most streaming options) is beginning to make a come-back. 

2).  FRED SHEFTE - Stock Shares - late last year, HHSE President D. Frederick Shefte completed his divorce proceedings with Diana Shefte, including the communal division of his restricted officer / affiliate stock shares in HHSE. Earlier this month (Feb. 8), Shefte filed for personal bankruptcy, and listed as an asset his remaining HHSE Stock Shares, with the caveat that Rule 144 sale restrictions - and the inability to place physical (printed) share certificates of officer-affiliate stock with known USA brokerages - renders these affiliate shares functionally worthless to the estate. Shefte's attorney (Stanley Bond) has informed HHSE that the Trustee has expressed an unwillingness to challenge the S.E.C. laws in an attempt to violate Rule 144 sale prohibitions, especially in light of the barriers governing both physical share certificates and officer-affiliate sale restrictions. Accordingly, it is HHSE's strong belief that Shefte's personal bankruptcy filing will have no negative impact on the company or the disposition of his shares. With Shefte's health status and home situation remaining tentative, he made the decision to reduce his personal stress by discharging himself from legal disputes - and in the process, improving HHSE's defenses in some disputed, foreign matters impacted under the "one-judgment" rules. 

3).  IMPROVING HHSE PPS IMPACTS S-1 OFFERING - The recent improvement in both volume and pricing of HHSE common stock shares in the public market has generated concerns among some HHSE shareholders about our S-1 share offerings.  The intent of the S-1 is to raise funds for the expansion and marketing of MyFlix (along with a provision for 30% of proceeds to be utilized for existing payables and debt management). As currently drafted, the three S-1 stock sale tranche's are each at 50-million shares, with the first at $.03 (e.g., $1.5-mm), the second at $.05 (e.g., $2.5-mm) and the final at $.08 (e.g., $4-mm) - as these share prices were structured to be a "premium to current market prices." With the recent improvement in HHSE pricing, $.03 is no longer likely to be a premium price - and may, in fact (in days), be a discounted price to the trajectory of HHSE share prices at this time. Accordingly, a revision is anticipated in the pricing levels for the S-1 and this would result in a reduction of total S-1 shares being offered being reduced from 150-mm total to a more likely level of 100-mm or slightly less. A revision of the S-1 offering will be posted in the next few days to the S.E.C. via a Form 8 statement, as prior formal notification to the market is recommended by counsel. 

4).  HHSE YEAR END - AND F10 - The HHSE annual filings for the OTC markets will be released this week, as they have already been incorporated within the F10 Registration. This will be the last OTC markets disclosure filing as all future financial disclosures will be posted first to S.E.C. Edgar. HHSE has been advised to continue making required OTC filings during the 60-day S.E.C. review period; however, this advice renders this week's 12-31-2020 OTC filing as the last. Revenue results were negligible for 12-31-2020 - due to the various factors of COVID-related retail shut-downs, ongoing theatre closures, post-production status for "WILDFIRE" and the imminent launch of the MyFlix site... all of which items now show significant activities for Q1 (and Q2, with respect to the physical home videos and theatre openings).

5).  PRAYERS & BEST WISHES FOR SEN. ROBERT DOLE -  HHSE C.E.O. Eric Parkinson asks that we keep Sen. Robert Dole in our thoughts and prayers as he commences chemotherapy today for Stage IV lung cancer. Senator Dole has lived an admirable and productive life of 97-years, and is a long-time and family friend for the Parkinson's (clear back to his first political race in Kansas). Eric Parkinson was also a co-Chair of the west coast fund-raising team for Senator Dole's 1996 Presidential race, including a record-breaking fund-raising event for the movie industry held at the Century Plaza Hotel in Los Angeles. Godspeed for a recovery and more years earned for this great man...