Abandon Ship! Unraveling HearUSA Part 19

Ship’s log for the HearUSA Enterprise,March-May, 2011.

March 17, 2011:  Siemens moves to exercise its rights as a secured creditor to take over HearUSA in an SEC petition containing the reassuring note that it “plans to continue operating HearUSA’s business, but … make significant changes to make them more profitable…” 

Comment:  It’s about time.

March 16-19, 2011:  Siemens USA President Brian Kinnerk is fired and replaced by acting CEO Scott Davis.

Comment:  One insider says “Brian Kinnerk lost his job for doing the right thing.  It was courageous for a supplier to sue a retailer.”  Another insider says the firing had “nothing to do with the HearUSA situation.” Most likely, it was a mix of both, with HearUSA  scapegoating Kinnerk to make itself look good (see next).

March 17, 2011:    Arcadia Capital Opportunity Master Fund (Florida), owner of 10% owner of HearUSA stock, publicly rejoices at the news of Kinnerk’s “long overdue” departure, which it heralds as a “first step to Improving relationship With HearUSA.” After trashing Siemens for its “destructive strategy …[of ]…hostile and malicious actions against a loyal, long-time business partner,” Arcadia proceeds to urge Siemens  as the “natural buyer” to make a “fair and full offer.” 

Comment:   Sounds like the HearUSA PR machine. It also sounds like Arcadia is scared to death that its stock is going in the ditch.

March 17, 2011:  HearUSA files a temporary restraining order against Siemens in the NY State Supreme Court, calling Siemens  “overbearing and inappropriate” in its attempts to “seize” the company.

Comment:   CEO Hansbrough remains at the helm of the ship. Stock sinks to 48.5 cents/share.

April 8, 2011:   CEO Steven Hanbrough sells 10,753 (7%) of his shares.

Comment:  Or maybe he’s left the helm and put the President in charge….

April 8, 2011:  President Gino Chouinord sells 5,974 (7%) of his shares.

Comment:  Or maybe Steve and Gino have left the helm and put the CFO in charge ….

April 8, 2011:  CFO Frank Punal sells 3584 (12%) of his stock.

Comment:  Is anybody left on deck? Do these guys know something we don’t?  Has the SEC noticed all those Form 4s today?

April 22, 2011.  10% Owner Arcadia sells 23,000 of its 4.5 million shares.

Comment:  Arcadia missed the April 8th memo.

May 9, 2011.   HearUSA & HEARx are busy debuting their Official Twitter Page.

Comment: Woohoo.  Impeccable timing — Arcadia must be relieved.

May 13, 2011.  Tweet:  “Happy Friday 13th friends. Any weekend plans?

Comment:  Are they kidding?  These guys definitely know something we don’t.

May 16, 2011: Hear-USA says it is out of money and files for bankruptcy in Florida, AMEX stops the stock’s trading at $0.34/share.

Comment:  The ship has sunk.

 May 17, 2011. Tweet:  “How are you celebrating May is Better Hearing Month?”

Comment:  Better than you are.

May 17, 2001:  CFO Frank Punal signs notification to the SEC (Form 12b-25) that HearUSA’s quarterly report  could not be filed on time and that “Losses are expected to substantially increase for the recording of goodwill impairment losses. “

Comment:  And that’s all he wrote.

Going Going… Gone!

May 16, 2011:  HearUSA says it plans to stay open and continue meeting payroll.

Comment:  Good!  Better Tweet that to employees.

May 19, 2011:  HearUSA says it may do mass layoffs.

Comment:  OK forget the Tweet.

About Holly Hosford-Dunn

Holly Hosford-Dunn, PhD, graduated with a BA and MA in Communication Disorders from New Mexico State, completed a PhD in Hearing Sciences at Stanford, and did post-docs at Max Planck Institute (Germany) and Eaton-Peabody Auditory Physiology Lab (Boston). Post-education, she directed the Stanford University Audiology Clinic; developed multi-office private practices in Arizona; authored/edited numerous text books, chapters, journals, and articles; and taught Marketing, Practice Management, Hearing Science, Auditory Electrophysiology, and Amplification in a variety of academic settings.