Form 10 / Audit Issue Updates

Greetings HHSE Friends & Followers - There's some exciting news to share with respect to HHSE facilitated productions (including COWBOYS OF CANNABIS and THE LEGEND OF BELLE STARR).  But the subject of most shareholder inquiries has been "what is the status of Form 10" and filings.  In this respect, we will share with you information on the filings, and save the project updates for later.

There were three issues posited by the Auditors that the company is already working to resolve. 

Firstly, the company's prior recognition of on-boarding and mastering costs for MyFlix titles as REVENUES are better off being reversed out of the 2020 and 2021 income reports - and then recategorized as "contingent receivables." This is because the enforcement / collection of said mastering costs cannot occur until after the MyFlix site has been launched. This observation will require that HHSE re-submit the 2020 year-end report to the OTC (and obtain a revised attorney opinion letter for 12-31-2020).  The year-end for 2021 was purposely not yet filed with the OTC markets as we wanted to await any such comments or observations.

Next, the balance sheet detail of payables (both current and long-term) need to be reconciled with revised balances (especially with respect to judgment settlements);  settlements need to be evidenced as "performing" and not just "as agreed."

Finally, we were advised that the Audit Letter supporting the Form 10 CANNOT ignore the valuation of the company's film library.  Hannover House had requested that the auditors opine on all issues except the film library - due to the stale aging of the 2010 report, as well as marketplace paradigms that have replaced DVD sales with streaming revenues. One or two years ago, a registration filing with the library value being excluded from the auditor's opinion may have passed review. But the more stringent S.E.C. rules on OTC issuers - and stricter PCAOB guidelines - no longer enable such a choice.  Accordingly, HHSE has moved to immediately get a qualified Film & Television Library Valuation Report completed - which we are told will take ten (10) days or less. HHSE will then incorporate the updated Library Valuation letter into the existing Form 10 and the auditors can complete their opinion letter.  

While it's still possible that these steps will be completed prior to March 11 (the date of the HHSE Shareholders Meeting), we have decided to delay the Shareholder's Meeting by ONE (1) week - to March 18, 2022.

Our goal is to file the registration as quickly as possible - but to take all reasonable steps to assure that comments from the S.E.C. are minimized so that the company is recognized as a fully-reporting entity. Stricter rules and PCAOB guidelines have made it harder for issuers to meet these standards. But we are complying and working to achieve this corporate goal.

Thanks again to our loyal longs who have endured many challenges with HHSE over the years. The news is not always peachy-fun, but we're getting the job done. Next Up?  Exciting programming / production news that will help move MyFlix to the next level.

Fantastic Development on WILDFIRE Elevates Feature & Creates Additional Revenue Stream

Greetings HHSE Friends & Followers - The HHSE facilitated and supported production of "WILDFIRE: The Legend of the Cherokee Ghost Horse" continues in a positive trajectory through its post-production. 

But some great news regarding the Soundtrack has finally transpired.  Multiple-Grammy Nominee and co-Executive Producer of this film, MICHAEL MARTIN MURPHEY, has agreed to record an entire soundtrack album for the movie, including the remake of his #1 worldwide hit, "Wildfire."  The new version of "Wildfire" features a duet with "The Voice" winner and our film star CHEVEL SHEPHERD, the music video for which is slated to premiere on CMT this spring. 

"Murph" as his friends call him, already has SIX gold-certified albums and a dozen top 40 hits. Having his compositional skills and solid musicians as support for the film's soundtrack will elevate the stature of this creative element and provide HHSE with a retail item (the Soundtrack CD) as a bonus revenue stream.  

Soundtrack albums are often throw-aways with feature films. But when major artists and original material dominates, such items can be huge sellers in their own right, as well as major contributor's to a film's profile and success. Case in point: the soundtrack album to "O Brother, Where Art Thou?" sold over 8-million units, hit # 1 on the Billboard charts and won "Album of the Year" Grammy in 2002.  Not bad!

Meanwhile, editing and final assembly of the WILDFIRE feature forges ahead, under the direction of Jon McCallum. Pleased to say that the final result is exceeding our greatest expectations.  

Below are a few images and video clips from the production and post-production - as we approach the finish line on this first significant feature film produced with the support of Hannover House!

ABOVE:  Editor JON McCALLUM presents HHSE with some scene assemblies from the August-Sept. 2021 footage for "WILDFIRE."

ABOVE:  Music Industry Legend and Hit-Maker MICHAEL MARTIN MURPHEY performs a new version of his # 1 worldwide hit "WILDFIRE" with film co-star CHEVEL SHEPHERD - filmed at the Cherokee County Fairgrounds, Park Hill, Oklahoma. In addition to performing a role in the movie, Murph is now working on a full and original motion picture soundtrack release. (Bottom Image:  "Fishing with Buddies Scene" featuring Michael Martin Murphey, Yellowstone star Mo Brings Plenty and Highlander star Adrian Paul - camera operator in foreground is Andrew Parke). 

CHEVEL SHEPHERD receives instructions on "stunt fall" sequence in which her character falls off a 20-foot ledge and receives a traumatic head injury. This scene refers to the song "WILDFIRE" in which the young girl chases after her horse who has escaped during a storm. In our movie version, the storm is lightning and strong winds, which spook the horse and Chevel's character chases after WILDFIRE into the woods where she ultimately falls off the ledge. Her fall was atop inflated stunt bags, but this shot (ABOVE) was her approach to the edge of the ledge, where she is protected form falling through a belt apparatus that is unseen by the camera below. 

Care was taken for Chevel's head injury to match the wound from prior scenes in which she was rescued by UDELI (played by Moses Brings Plenty).

Due to COVID concerns, the Screen Actors Guild would not allow the "WILDFIRE" Hospital scenes to be shot at the Cherokee Nation Hastings Hospital (due to active patients and exposure concerns). Fortunately, located right next door to the hospital is the OSU Center for Health Sciences "Teaching Hospital." This state-of-the-art facility was ideal for shooting our scenes as we had full access and no COVID concerns. 

https://medicine.okstate.edu/hastings/index.html

Pictured ABOVE:  MIKE GARNER, Senior Manager of Video Production for CHEROKEE NATION BUSINESS portrays Dr. Hoskin in the film. He is joined by TAYLOR PEDIGO as the Orderly, while real-life doctor SAMANTHA BRAY watches from the video village with 1st A.C. SACHA THOMAS and Producer CHRIS LARGE (Cherokee Nation). Also pictured above, "Mean Girls Posse" members HARMONY HOLMQUIST and OLIVIA SLATTON-FITE joke with Chevel about her "baby" that was jokingly added to the script (but, of course, not included in the movie).

"Highlander" TV Series star ADRIAN PAUL portrays the "Dad" in WILDFIRE, and nailed the role!  Pictured ABOVE: Director ERIC PARKINSON with actress THESA LOVING (as "Grandma Bette"); Cherokee Nation National Treasure TOMMY WILDCAT visits the dressing rooms for CHEVEL SHEPHERD and ADRIAN PAUL; "Killers of the Flower Moon" Native American star CARA JADE MYERS plays the "Mom" in the film and is seen here with ADRIAN PAUL and RICO SIMONINI ("Frank and Ava") as they contemplate a major business meeting.  Make-up artist SANDY BURFORD takes a break as ADRIAN PAUL studies his lines for the next scene; CHEVEL SHEPHERD sits atop the Elemac Dolly and Geared-Head Camera Support System; Cherokee Nation EMT Medic TRAVIS HOOPER sits on the camera platform while Los Angeles-based Cinematographer ANDY PARKE stands by to shoot. 

HIGHLANDER fans may get a kick out of seeing the car that the producers selected for actor ADRIAN PAUL to drive.  Yes, that's a TOYOTA HIGHLANDER and Yes, it was on purpose!

Grandma's dinner table is the setting for three separate scenes and over 8-pages of important dialogue in WILDFIRE. Accordingly, actors needed to change their clothes for each set-up while the art department changed out the food being served.  Pictured ABOVE, over-the-shoulder shot of the filming activities; the primary Camera Team is pictured (left-to-right), DAVID HUFF, SACHA THOMAS, ANDREW PARKE and JOSH IRWIN;  (bottom left) MAJOR DODGE SENIOR (portraying rancher Fred Jones in the movie) is joined by CHEVEL SHEPHERD and his real-life son, MAJOR DODGE IV (who portrays bratty little brother Austin). Next, CHEVEL and MAJOR JR look skeptically at the dinner plates as the food had not been warm for several hours!  Lastly, our Script Supervisor and Clapper Girl HALEY ZEGA joins Chevel and Major Jr. for the beginning of the scene, in which Grandma enters with a new meal.

WILDFIRE: The Legend of the Cherokee Ghost Horse 

was produced by SNOWY MORNING, INC. in association with HANNOVER HOUSE and MYFLIX.

WILDFIRE is NATIVE STRONG!

CHRIS LARGE - Producer (Cherokee Nation)

MOSES BRINGS PLENTY - Actor (Lakota-Sioux)

CARA JADE MAYERS - Actress (Wichita Tribe)

MARIAH DAVIS - Actress (Choctaw Nation)

OLIVIA SLATTON-FITE - Actress (Cherokee Nation)

PHOENIX GHOST - Actor (Zuni - Hualapai Nations)

TOMMY WILDCAT - Actor (Cherokee Nation)

MIKE GARNER - Actor (Cherokee Nation)

CHOOGIE KINGFISHER - Actor (Cherokee Nation)

TYARA NOON THOMAS - Actress (Cherokee Nation)

HARLEY RASKEY - Actress (Cherokee Nation)

KELLY PREWITT - Actress (Cherokee Nation)

And last but not least, no visitors to TAHLEQUAH, OKLAHOMA are official UNTIL they've had the amazing and enormous Chicken-Fried-Chicken sandwich at DEL RANCHO CAFE!  Pictured above, WILDFIRE Director ERIC PARKINSON with actors PHOENIX GHOST and KELLY PREWITT and location sound recordist and editor JON McCALLUM

 

Further Settlement / Resolution Status in HHSE (Pre-Form 10) Matters

Good Afternoon HHSE Friends & Followers - Over the past few years, The Hinds Law Firm (formerly known as "Hinds-Shankman" when they were handling some cases for Hannover House), had been sending invoices and demands to the company's prior address (at 300 N. College in Fayetteville).  At some point, these demands turned into a lawsuit and their declaration documentation states that they properly served the parties (at the wrong addresses).  In any event, when former HHSE President Fred Shefte filed for personal bankruptcy in February of 2021, the issue of a disputed balance with this L.A. law firm became known due to their visible presence in Mr. Shefte's case.

Hannover House was notified early last month that the Hinds-Shankman claim was scheduled to be converted into a properly matured default judgment. Accordingly, Hannover House sent a response to the court - and to James Hinds - which resulted in a delay of this  certification and sparked direct communications between the parties.  

Accordingly, we are pleased to announce that a settlement has been made - and that the litigation matter will be promptly closed. The settlement terms require that HHSE pay monthly installments (that work within the company's current cash flows), but that the overall amount is substantially less than the default balance would have been. 

As HHSE continues to work towards a successful future with MYFLIX as the revenue locomotive (and feature productions as a complementary cash-flow source), we are pleased to clean up prior disputes from the 2016 - 2018 time period in which the indie film marketplace imploded. Those following HHSE closely will recall that the initial decline in the indie DVD market in 2015 - 2016 was offset by implementing "theatrical releases" which elevated a title's stature and enabled qualification for lucrative Netflix licenses. But as both of those benefits changed from "it's a theatrical release" pitch to "what level of box office did it achieve" questions from buyers, the full transition into streaming became self-evident as the path that the market now requires.  

Unlike the 20+ other indie suppliers that did NOT survive the paradigm shift and collapse of the DVD market, HHSE is grateful that we have endured, we have evolved, and we have resolved nearly all of the prior disputes that arose during those tumultuous years. MyFlix looks poised for great success, and we are honored to have an army of loyal shareholders and dozens of program rights owners (controlling over 15,000 titles!) that have stuck with us to help make this happen!

Go HHSE / Go MyFlix... this is the path to our success!