hhse officers reduce salary to $1 (one dollar ).

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As of January 1, 2016, Parkinson has reduced his annual salary to one (1) US Dollar per year , until such time that the Company’s Registration Statement (and applicable supporting documents of the Audits and updated Film Library evaluation report) have been fully accepted by the Securities and Exchange Commission.

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As of January 1, 2016, Shefte agreed to reduce his annual salary to one (1) US Dollar per year, until such time that the Company’s Registration Statement (and applicable supporting documents of the Audits and updated Film Library evaluation report) have been fully accepted by the Securities and Exchange Commission.

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Form 10-12(g) Registration Filing, including 2-years of full-year audits and a revised and updated Film Library Valuation Report will be submitted to the S.E.C. in the near-term future, subject to the completion of the new Film Library Valuation (it should be noted that Company is seeking to obtain a lowered valuation than the initial figure determined by the new Library Evaluators, which contains sales forecasts for titles greater than Company Management’s estimates. It is Company’s position that a Library Valuation that is significantly higher than forecasts based on Company’s existing, internal self-distribution apparatus, could elevate shareholder expectations higher than management’s more conservative forecasts. While the higher sales values provided by the first Library Valuation report have as a premise the assumption that HHSE will align itself with one of the Major Studios in the coming year, there can be no assurance that such a deal will occur, and as such, management feels that the current Film Library Valuation should reflect existing distribution channels and revenues, and conform closer to management’s estimated current value of $28-mm . A review of sales activities at the Cannes Film Festival and Marche du Film (held in May, 2016,subsequent to the current reporting period), will be included in a telephonic discussion on May 25 with the Film Library valuation supplier, with the goal of reaching a mutual consensus as to a value that is both realistic within the industry, and obtainable based on Company’s current distribution apparatus.

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