Hannover House Inc (HHSE)

[MIKEY501]

Here are a few of the options HHSE insiders have to sale shares:

1. Fred and Eric have had a 10(b)5-1Trading Plan in effect previously regarding their shares. They may have a new one currently as well. SADLY, the SEC law does NOT require them to disclose whether they do or not. Further, even if they chose to disclose their current trading plan (THE SEC
HIGHLY RECOMMENDS TOO), they are not required to disclose the terms of it either. In the past, Fred and Eric chose not to disclose they had a 10(b)5-1Trading Plan until after the fact, and further, they never chose to disclose to shareholders what the exact terms of the plan were ie....share price requirements etc etc. The conclusion here is in the past they had created and filed one and chose not to tell shareholders until a further date, and when they did finally disclose it, the exact terms of it were not disclosed. They had not put it in their filings until after they had already removed the legends and quietly submitted the paperwork to the SEC. It was not until they decided to change/cancel the plan that it finally came out in filings what they were doing behind the scenes.

2. Eric and Fred have control shares. There is a plethora of options available to them to make those shares exempt from the registration requirements. A majority of OTC and Pink stocks use these loop holes and exemptions to sell their shares quietly without shareholders realizing what is happening until after the fact. Happens every single day many times over in the OTC. Another exemption available to them is rule 144, which allows them to sell unregistered shares but with some limitations. They could qualify for this exemption because they have held the shares over a year and have current information with OTC. Since the o/s of HHSE is apx 600m, they could each sell right now about 6m shares this qtr.

All they need to do is instruct their transfer agent to take those shares off restriction (THEY ALREADY DID THIS), mail the SEC a form 144, and give their broker the shares to sell. (they previously said they use Spencer Edwards as a broker) Heres the kicker, the SEC DOES NOT REQUIRE form 144 to be filed electronically with SEC’s EDGAR database!!! Therefore; it can be months before shareholders find out insiders were selling shares thru exemption rule 144!

There is a whole bunch of other tricks insiders can use to sell their shares without anyone noticing till much later. One of my favorites is what us professionals investors call "THE GIFT". Its a huge loophole in the SEC rules whereby the holders will "GIFT" (cough cough) the shares to someone and as long as those shares were already held for one year they can get the restricted legend removed and into the float they go. Lots of crooked CEOs pull this trick using their wifes or kids.

In the end, its all SHUCK AND JIVE!