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STOCK BUY BACKS - HHSE has made direct purchase agreements with three, non-affiliated shareholders, to purchase 1.2-million shares at $.01 each. These shares will be retired into treasury stock. As long as the share price remains artificially low, we will continue to buy shares and retire them to treasury, as cash permits. The Company had to delay the process of buying back shares due to the loss of cash flow from the bankruptcy of Alchemy / Anderson, and the non-bankruptcy cram-down of Allegro Music Group. While the financial woes of those two wholesalers did impact cash flowing into HHSE, it was most notable for optional issues, such as stock buy-back opportunities, as the Company has otherwise managed it's operations and payables through other cash flow means. It is also notable that HHSE has not issued a single share of stock in over a year (for any purpose), and that the two principal managers (Parkinson and Shefte) have not sold any shares in three years. As a non-reporting entity, HHSE is not required to file a Form 8 regarding the stock buy-back... but we will disclose this in our upcoming year-end filings and the Form 10 registration.

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