UPDATE: DECEMBER 16, 2014 - Approximately ten weeks ago, when the above Blog was posted, HHSE managers believed that the filing of the Form 10 was only a few weeks away, and that its completion would signal a rise in the PPS and general financial health of the company. Now, in retrospect, it's quite clear that the Form 10 project was substantially more difficult and time consuming that expected. In response to the company's urgent need to create a financing structure for the fulfillment of record video presales (including "On Any Sunday", "American Justice", "Dinosaurs of the Jurassic" and "Asalto Al Cine"), the immediate closing of a debt transaction to benefit the National Bank of California and Fantastic Films required that a financing be closed now, in December, and prior to the filing of the Form 10 Registration Statement. While the above blog was true and reasonable at the time it was first published - circumstances over the following ten weeks required that HHSE managers make decisions based on new realities, that were in the best interests of the Company's health (even, if such choices were contrary to earlier goals and statements). We could have stuck to the earlier goal of no new debt conversions - certainly this was the preference of management - but doing so would have jeopardize the manufacturing and fulfillment of Q1 sales. Business must be capable of adjusting to changing circumstances. Otherwise, it's like trying to fight a battle on the field, and then ignoring an unforeseen airstrike because the original attack plan did not anticipate airstrikes. Perhaps some would praise that said managers "stuck to the plan" - but if the end result is defeat, which is the wiser strategy?
To avoid future shareholder conflicts which might arise in the face of changing circumstances, HHSE will hereafter be more circumspect in disclosing "predictions" of future and ever-changing events.
We have struggled with the mutually exclusive goals of being open and transparent with the conflicting reality that HHSE must be capable of quickly adjusting to changing circumstances. Did we know that the Form 10 would take MONTHS rather than weeks to complete? No. Did we know that our new release pre-orders would greatly exceed our manufacturing credit access, and require new financing? No. Did we know that a resolution of the NB Cal debt would be required by all new lenders? No. None of those things were known - although we were certainly hopeful for big preorders. The bashers would like for HHSE to go out of business, but we won't oblige them. As circumstances change, the HHSE managers must make prudent and reasonable decisions that are in the best interests of the Company. But then the bashers get to call us "liars" because we deviated from a plan or goal published months earlier. Of course they would do that. They don't want HHSE to survive and thrive. They would rather we NOT make smart decisions based on changing realities to that they can post "liar-liar-pants-on-fire!" The correct and logical response to our debt transaction today would have been, "good move to protect the Q1 shipments, but we wish it didn't have to happen right now." HHSE managers agree.
SO, blog postings will no longer discuss anticipated future events - unless required under pubco disclosure rules. This won't stop the bashers from grasping frantically to find something to criticize, it's their stated goal to do so. But it will avoid upsetting our legitimate shareholders, and it is to those persons that we owe our loyalty.
