Good morning HHSE Friends - as most of you know, Hannover House has not issued any shares in over a year, and we do not have any plans to issue any more shares. That said, both Parkinson and Shefte have the "option" to call on the reissuance of surrendered shares... yet there are no additional Authorized Shares still available under the existing share structure at 800-mm. Accordingly, and under advice of counsel to avoid an S.E.C. comment on our Form 10, we have INCREASED the "authorized" shares from 800-mm to 900-mm. However, this is NOT because we are issuing shares to ourselves or any other entity. This move has been taken to create the "availability" of shares in the event that the existing reissue rights are exercised. As those in the know will recognize, as officers and managers, Parkinson and Shefte are restricted from selling shares, except in special circumstances and in small quantities. So there is no benefit to either Parkinson or Shefte in "calling upon" the reissue option to receive back shares that were previously surrendered into treasury. Regardless, the Form 10 advisor has instructed us that the absence of availability will create a comment / issue with the Form 10.
For any short-sellers that might get all excited and think "ooohh... there's going to be some cheap shares soon," we have bad news for you. Having the "availability" of shares does not mean that we're going to break our streak and issue more. "Debt Conversion" deals are functionally impossible to do anymore under the enhanced compliance restrictions recently mandated by the S.E.C.... and HHSE has been managing our payables adequately without doing any debt-conversions for the past 15-months. Additionally, and notably, neither Parkinson nor Shefte have any way to benefit from the issuance of previously surrendered shares... in fact, the reissuance of shares to Parkinson and Shefte may trigger personal tax liabilities. Accordingly, this filing move to create A/S 'availability' will not create any dilution of trading shares into the marketplace.
