Hanover House, Inc. (OTCMKTS:HHSE) Retreats

After a prolonged run up the charts that brought Hanover House, Inc. (OTCMKTS:HHSE) to a close of $0.03 on Monday, the stock took a bit of a timeout yesterday, closing 10% down on volume that was still a lot higher than the average.

HHSE is a company engaged in the movie production and distribution business, along with forays into the book publishing sector. The recent commotion around the stock that sent the price skyward in a little more than a week seems to have started earlier, with HHSE announcing a joint project with another recent OTC favorite – NanoTech Entertainment, Inc. (OTCMKTS:NTEK). The initial announcement concerned the launch of a streaming video-on-demand website that will initially broadcast HHSE‘s movie catalog, with its library being slowly expanded with additional content the company is licensing and intends to license.

The first and most immediate hindrance before the potential success of such a service is the fact that most of the films currently offered by HHSE can easily be classified as B-movies and those among them that have gathered enough votes on the Internet Movie Database to get a median score have been rated pretty low by the audience. Thankfully, the announced few initial titles expanding the catalog have better scores, even if they largely remain in B-land.

To the company’s credit, it had never really been targeted by stock promotions and it seems to be doing ok financially. HHSE‘s latest quarterly report listed the following:

$15 thousand in cash
$2.5 million in current liabilities
$535 thousand in quarterly revenues
$432 thousand in quarterly net profit

Sadly, as of right now, the website that should eventually host the movie streaming service of HHSE is not usable and contains just a placeholder image with what could be the expected layout of the operational site. How and when this will launch is not clear yet.

HHSE‘s descent down the chart could also be tied to the performance of NTEK, as we previously suggested. NTEK took an immediate nose dive right at the open, after a bull rush that saw them climb in leaps and bounds. As NTEK closed Monday nearly 14% down, HHSE may have followed suit, as a large part of the success of their video streaming project depends on cooperation with NTEK.

HHSE is currently trading another 10% down in the early session.