Welcome to the Hannover House Investor Relations Blog

Thursday, November 29, 2012

What's going on with all the absurd I-Hub nonsense?

As stated previously, Hannover House has aspirations for eventually having our shares traded on a "higher" exchange than the OTC-Markets Pinksheets.  In fact, we're told that as a half-step, we'll be automatically elevated a half-step (so to speak) to the OTC-QB simply by posting our financials to Edgar.  But we'd like to shoot for higher, not to disrespect the QB or even the QX.  We'd like to be traded on the BB or higher in part to squelch a lot of the "beyond-bizarre" silliness that sometimes passes for I-Hub posts. 

What's the reason that someone would ignore all facts in order to say that we're not REALLY an entertainment distributor, but are, instead a "Coffee House"?? Can anyone give even a half-ounce of credibility to an anonymous basher who is so obviously delusional that they would make such a claim?  How many shareholders have visited our offices and warehouse over the years, including our receptions held here?  We don't even have a decent coffee maker!  And all this perpetual "sky is falling" nonsense and the vague promises that these idiots "know" something that no one else knows, and "oohhh boy... if you knew then you'd go running, believe me" and "of coarse"  (bozo's cannot even SPELL properly, let alone think clearly).  Look back at the basher posts from more than a year ago, promising imminent demise in the next few days and weeks.  Really??  So if these bashers really think they know something, then why can't they come right out with it!?

The truth is, Hannover House has disclosed all our activities, including the ugly matters of litigation and the potential threats that these could have for the company.  Read the filings.  It's all there, warts and all.  We stand behind our company and filings, and do not hide in the dark like anonymous little basher-boys. 

Fact is, we got into a deep hole 2-years ago with "TWELVE." Bedrock Ventures insisted that we acquire this expensive title and insisted that we go deep into debt to release it, because they had a financing obligation to the company to cover most of these costs.  But they defaulted on the payments to Hannover House, leaving us with the debts.  This has all been disclosed, as have the various creditor and litigation issues that arose from this ill-advised venture. 

So what has the company done about it? First of all, we stopped spending big money on acquisitions, and we stopped spending big money on theatrical P&A.  We refocused the company on direct-to-video titles, and it's proven to be a great cash flow business.  As for Bedrock, Hannover was willing to walk away and write it off as another one of Bedrock's breached ventures, but now we are forced to respond and to fight.  They want back the $500,000 from "Twelve?"  Okay, we're going to fight for the $1-mm that was not funded under the Investment Banking agreement. But we're not going to fight the case on a blog site or I-Hub Board.  Yes, "MeanMe" is an appropriate I-Hub screenname selected by Fotis... but why would he want to bash our stock on I-Hub?

Suddenly, there's a group of "new" names posting to I-Hub / HHSE and inventing anything they can think of to bash our stock and our officers.  Besides Fotis / MeanMe, apparently, "pdgood" has some history with an Arkansas individual that he wants you to think is associated with HHSE.  I guess his contact is not considered a  good guy?  In this bizarro logic, the HH officers and employees are now responsible for anything and everything that happens to all other people that live in the State of Arkansas (population 2.5-million+)??  So if that's the logic, why isn't he writing about the important and successful people our managers really DO have contact and activities with, such as the WALTON and TYSON families among others?  Because all he's spewing is baloney, and it's designed to try to scare low-information traders away from the stock.  But these guys will not win. 

The success of Hannover House is our core business as a growing entertainment distributor -- which activity is unaffected by an artificially depressed PPS.  It's like trying to hold a rubber inner-tube underwater.  At some point, I-Hub readers will learn to completely ignore their anonymous and baseless spewings, and the natural PPS value will be restored.  Hannover House will help it too.  We will meet the uplist requirements very quickly (including the two-years of HT audits), we will fight the Bedrock case, and we will continue to place more-and-more high-margin video releases into retailers such as Wal-Mart, Redbox, and Blockbuster.  Longer-term, we're pursuing high-end titles but without the high-end cost to HHSE (such as arranging $12-mm in off-balance sheet / non-recourse financing for MOTHER GOOSE).

Will it be an easy journey?  Not likely, but far from difficult. We have to make tough management decisions daily to decide how-much of our cash flow to invest in new activities, and how much to use for debt management.  Sometimes we get it wrong, and an impatient creditor files a lawsuit... so we deal those situations as they occur.  But there has to be a balance between using all cash flow for old debt, or using all of the cash flow to generate new sales and growth (and ignoring the old debt).  Shareholders generally want earnings, and this requires new activities.  But they also don't want to see lawsuits.  It's also been communicated to us that paying off aged and impatient debts with "debt conversion" transactions (i.e., issuing new shares), is also an unpopular strategy among shareholders.  So there's always a probability that someone is not going to be 100% happy with whatever decisions are made by HHSE managers.

But through it all, we are open, accessible and we communicate with shareholders.  We are probably among the most accessible public-company managers out there.  We take shareholder calls, we respond to shareholder emails, and we tell it like-it-is.  Even when it's not that pretty.

The bashers wish that we had some dark and scary secrets, but we don't.  The only secret is who are they and what is their agenda?  Call them out on it.  Tell them to stand up for what they do and say... certainly Parkinson and Shefte do not hide in the dark.  But most of all, don't let them kick your asses by stealing from you.  Bashing our stock with false claims, innuendos and the perpetual "sky is falling" routine is no better than a criminal on the street stealing your wallet.  At some point (soon), the political powers-that-be in D.C. are going to pass sweeping reforms to stop all forms of stock manipulation and baseless bashing.  Sooner than you can imagine.  Meanwhile, Hannover is implementing our own response.