Friday, October 29, 2021

More Legal Victories for HHSE - Clearing Path to Form 10

Dear HHSE Friends & Followers - The "Lazo fraud" claim against HHSE and others - filed in May of this year - was never seen as any sort of legitimately grounded action. However, because it named HHSE, other divisions and CEO Eric Parkinson, it was still an item of "stink" on the legal disclosure table of our Form 10 registration.  Accordingly, we are happy that this "nuisance lawsuit" was DISMISSED by order of the Federal Court Judge on Wednesday.


When this baseless action was filed in May, the HHSE short-sellers gleefully boasted that "the sky is falling" and that "failure Parkinson is a fraud," along with their customary post equivalents of monkeys flinging dung. Accordingly - since these naysayers saw the Lazo fraud lawsuit as so horribly damaging and as a material threat to HHSE - we gave them two days to announce that "they were wrong" and to admit that the case had no merit and was dismissed by the judge. 


Apparently, all four of these HHSE naysayers are on holiday this week... so we will go ahead and update our legitimate shareholders with the court filing below.


In other legal and Form 10 matters - the DAISY WINTERS litigation is the company's last actual case to oppose, and L.A. attorney Daniel J.Y. King informs us that this is occurring prior to the Nov. 5 cut-off date.


HHSE doesn't always hit our legal resolution target dates, but we do get it done, every time... and what we list on this blog as the expected outcome is always based in fact.

Stay tuned...





Tuesday, October 26, 2021

Are you ready for some good news?

Dear HHSE Friends & Followers - apologies for being non-communicative for the past couple of days.  But we have a good reason for this distraction.  HHSE is finalizing the biggest financial (dollar-value) deal in the company's 28-year history.  This is a venture which will dramatically increase the company's revenues, bottom line and visibility.  The news of this venture will be released via a joint-announcement with "the other party" which could occur as soon as this Friday.  UPDATE: The company that we are venturing with is a top media / entertainment entity ranking in the upper echelon of the Fortune 500. We are discovering that the procedures for press release review and approvals are significantly slower than at HHSE. As a result, it is not likely that the news of this venture will be released today...


After 2-years of fighting to remove the fraudulent legal claims against HHSE - and generally struggling to hold it all together - it's VERY EXCITING and INVIGORATING to be focused back on the big revenue issues and activities.


Stay Tuned!





Friday, October 22, 2021

Update on HHSE Legal Resolutions

 Greetings HHSE Friends - As requested, here is a quick summary of legal activities during the past week that are part of the company's path to registration.


1).  LEWIN MATTER - HHSE complied with and satisfied the required benchmarks set for Oct. 22, and is on track for the long-term resolution and settlement of this matter.


2).  UPTONE - There is a hearing on Monday (Oct. 25) as set by the HHSE attorney, in order to dispute issues with that foreign default.  We will update this blog with a summary of the Monday hearing by Monday night.  UPDATE:  Attorney Daniel King left a message for Parkinson on Monday of a procedural issue that will move the date of the Monday hearing, "all good, will explain later."  


3).  ELITE ENTERTAINMENT - Although "Satisfied in Full" in 2014, the recording of this Acknowledgment of Satisfaction of Judgment" was never filed with the Arkansas courts... and HHSE was advised to complete this task in order to further evidence the completion of that former dispute.  The filing in Washington County, Arkansas was made yesterday (Oct 21).

https://images.arcourts.gov/IMAGESimg/CK_Image.Present2?DMS_ID=37E5FCA1550BCE279852FDB08FDB865F0AB970F319DD3256E91E13AB73D8A18FFB27CFB838599917399C35F9BF21A1ED23CC5B392A48FE8E3227AC1C78F45E7C&i_url=https://images.arcourts.gov/IMAGESimg


4).   DAISY WINTERS - L.A. Counsel is still preparing the motions for this matter, so this filing is not yet released.




 





Friday, October 15, 2021

MyFlix and HHSE Registration Updates

Dear HHSE Friends & Followers - What an amazing moment-in-time we are now witnessing! 

The North American Film Industry is in the middle of the greatest paradigm shift since the invention of the VCR.  None of the "old rules" apply anymore and the new media markets are in many ways comparable to the Oklahoma Land Rush of 1889.  

So many industry pundits predicted a revenue disaster when release-time windows between theatrical openings and home-streaming started shrinking. But the doom and gloom did not occur - and now a movie like "HALLOWEEN KILLS" can open #1 at the USA Box Office (with an opening weekend gross of $50-million) and launch on the same day direct to homes via Peacock streaming.  Instead of a revenue disaster, the rights holders and studios are now experiencing a revenue bonanza... as streaming revenues are paid almost immediately and do not have the traditional 50-50 (or greater) splits with theatrical exhibitors. More money and faster payment:  it's hard not to love this new media distribution model.


Which brings us to Hannover House and MyFlix.  

The MyFlix multi-studio streaming service combines the best of subscription models with the broad selection and pay-as-you-go options of the transactional sites.  The MyFlix portal also plans to include an educational channel, a gaming channel and a personal-access channel (similar to the YouTube service).  Already, over 40-supplier studios and film libraries representing over 15,000 titles have committed to participate with MyFlix,  Over 2,500 programs have already been fully mastered and formatted.  It's the right business model and the right time.

So, what does HHSE need to do to LAUNCH this site and make the service active, public and revenue positive?

For over two years, HHSE management has been responsive to shareholder enthusiasm to get MyFlix launched as-soon-as-possible.  We have set - and missed - several internally-scheduled launch dates, and always missed for the exact same reason that is unrelated to the merits or status of the MyFlix venture.  It's always been impeded due to the costs to properly launch this service.

HHSE calculates that the company needs about $500,000 in final on-boarding, design, consumer branding and pre-launch costs for MyFlix. The venture will then need about $500,000 more for the initial consumer outreach of publicity, P.R., bartered ads, paid ads and social media. Then, our post-launch activities to keep-the-train-rolling (and hopefully accelerating), will need another $1.5-mm over the six-months following the initial 90-day  cycle (these ongoing funds will be going for continued and enhanced ads, promotions and new title on-boarding costs).  At that point - approximately 9-months from initial launch - MyFlix could and should be cash-flow positive. So, it's a $2.5-mm investment in a venture that could turn into a $100-mm revenue machine. 

This is why the company's focus for more than two years has been on the steps needed in order for the necessary fund-raising to occur. We lost a lot of momentum in 2020 due to COVID shut downs impeding the legal resolutions as well as the sort of face-to-face relationship meetings that are needed when raising significant capital. But over the past six months, most of these obstacles have been removed and the pathway for completion has finally been simplified. 

The high-altitude view of the road map looks simple:

1). File the Form 10 Registration for HHSE;

2).  Use the new "fully-reporting" status as the basis for a S1 Offering to sophisticated investors that prefer to invest in fully-reporting equities.

With respect to item "2" above, HHSE has been in communication with major investors and feels confident that the first-tranche raising of the S1 ($1.5-mm) is fully committed, and that the second tranche ($2.5-mm) is very close to being fully committed. 

With respect to item "1" above, securities counsel for HHSE has advised the company to resolve "legal issues and financial obligations that meet the standards for material impact" in order that the company's registration not be subject to "going concern" issues by the Securities and Exchange Commission.

Three legal disputes were identified as issues requiring that HHSE take action, based on the dollar value of the claims:  Lewin vs. HHSE (N,Y,), UPTONE vs. HHSE (CA Fed) and Daisy Winters / Shuttlewoods vs. HHSE (L.A.). HHSE was informed that the filing of affirmative defenses in these actions would be sufficient to address the "going concern" issue; the filing of the Form 10 registration would not need to be delayed until each matter was actually adjudicated, but only delayed until the filing of legally meritorious responses. 

The Lewin case has now moved into settlement mode; the Uptone case has been filed, and the Daisy Winters filings are in final preparation for filing in California within days. Accordingly, the Form 10 is being updated to reflect the modified status of these items - and will be ready to release upon verification of the final legal response filings (and the acknowledgment of the legal merits of the filings). 

Back at ground-level, the details and documentation required to properly respond to these legal claims (or the time and resources required to make a settlement), can be all-consuming.  If HHSE focused 24/7 solely on the legal issues, then operational issues (such as MyFlix onboarding, Wildfire post-production and Belle Starr prep - which are essential to show the S.E.C. current activities and revenue generation), would stop. But until the Form 10 and S1 are filed, HHSE does not have the cash resources to hire a big enough staff to handle all projects simultaneously. So, despite management's good intentions and competencies, pretty much everything has been progressing these past few months at 2/3rds of our preferred speed.  

So, when will the Form 10 and S1 be filed? Is it the same day as the filing of the final legal dispute... or is it a few days later, following securities counsel's review of the going concern actions?  Will the 2019 and 2020 audits be sufficient if also supplemented with review statements for recent quarters?  How quickly will the S1 fund since HHSE has already been in communication with funding parties?  When will MyFlix go "LIVE" so that the site / portal and APP can be accessed by consumers?  When will WILDFIRE start to monetize revenues back to HHSE?  How much in production fees will HHSE earn from "Belle Starr" and when will this be paid?  What's the status of "Meltdown?" Can you release the names of the four cable / streaming / broadcast networks that are interested in licensing Season One of "Cowboys of Cannabis?" 

These are all questions that have been posed to HHSE management within the past two weeks by Shareholders. They are all good questions, and we understand the curiosity and excitement among our shareholders for these answers and the applicable timing of these activities.  So, let's jump back to the high-altitude vantage for a clearer view of the roadmap.

1).  Legal Filings & Review of going-concern items.  This triggers...

2).  Form 10 / S1 Filings.  These trigger...

3).  Initial S1 proceeds (Tranche's 1 and 2). These trigger...

4).  MyFlix Consumer Launch - promotion, growth and into positive cash flow.

Item 3, S1 Proceeds also trigger:  enhanced HHSE and MyFlix support staff; up to 30% of new revenues for payables / debt management; development of additional income-generating production ventures. 

HHSE cannot neglect any of these items or issues. Nor can we deviate from the orderly implementation of each without jeopardizing the success of each step.  We know that we cannot properly launch MyFlix without proper funding... and while raising this funding, we must still show current operational viability to minimize S.E.C. commentary on the filings. We recognize and acknowledge that some shareholders have lost patience and that all shareholders wish we were already "there" at the finish line.  In response to the many shareholder questions, what we can pledge is to update this blog over the next few days as the final legal issues are attacked and filed... which triggers the more exciting S.E.C. filings and activities resulting funding and new ventures resulting from the filings. 

We believe that MyFlix and the HHSE model for creating production revenues with the facilitation of locomotive-level titles provide a reliable, two-tiered business model that will maximize revenues and value for our shareholders.  This is not blue-sky hopes:  these are activities and ventures already in motion.  We believe that as awareness of the HHSE / MyFlix business model expands, that the volume and pricing of HHSE shares will reflect this enhanced profile. We see significant rewards for those betting on our success.

Watch this space...













































Monday, October 11, 2021

Update / Status on HHSE Motions in "Daisy Winters" California Case

Good Evening HHSE Friends & Followers - California Litigation Attorney Daniel J.Y. King informs HHSE management that the timeline for filing in the Daisy Winters matter is still a few days away.  Previously, we had hoped for the company's motions to be filed by now.  However - during the past two weeks, King has reviewed the documents and communications regarding the prior settlement agreement, the proof of HHSE's full compliance with those settlement terms, and the subsequent release of the film by different distributors (DVD through Echo Bridge, from former HHSE VP of Sales TOM SIMS), as well as through Amazon Prime / IMDB-TV Streaming. 

In filing an opposition to the default, attorney King will argue the principal, applicable issues (including fully performed settlement), but will also argue issues "in the alternative" - including the mitigating / offset of revenues that the film received from the new distribution ventures.  These additional items require more time for drafting and supporting Exhibits.

Shareholders have been anxiously awaiting an update in this matter - as the DAISY WINTERS dispute is the last of three key legal issues that HHSE Securities Counsel felt should be addressed prior to the filing of the company's Form 10 registration and S1 offering.

Watch this blog space for updates on MyFlix and the registration filings this week...