Amended Monthly Operating Reports

As previously disclosed, on February 2, 2016 (the “Petition Date”), Hancock Fabrics, Inc. (“Hancock”) and all of Hancock’s direct and indirect subsidiaries (collectively with Hancock, the “Debtors ”) filed voluntary petitions for relief under c hapter 11 of t itle 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”, and the filings therein, the “Chapter 11 Filings ”). The chapter 11 c ases (the “Chapter 11 Cases ”) are being jointly administered under the caption “In re Hancock Fabrics, Inc., et al.” Case No. 16-10296.

During the pendency of the Chapter 11 Cases, Hancock has adopted a modified reporting program with respect to its reporting obligations under federal securities laws. In lieu of filing annual reports on Form 10-K and quarterly reports on Form 10-Q, each month Hancock will file with the Securities and Exchange Commission a current report on Form 8-K that will have attached to it the monthly financial report required to be filed with the Bankruptcy Court.

The Debtors previously filed their monthly operating report for the period beginning February 2, 2016 and ending February 27, 2016 (the “February Monthly Operating Report”) and their monthly operating report for the period beginning February 28, 2016 and ending April 2, 2016 (the “March Monthly Operating Report”) with the Bankruptcy Court, as previously disclosed. The Debtors have additionally filed their monthly operating report for the period beginning April 3, 2016 and ending April 30, 2016 (the “April Monthly Operating Report”) with the Bankruptcy Court. The April Monthly Operating Report is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Based on discussions with the United States Trustee overseeing the Chapter 11 Cases, the Debtors revised the previously filed February Monthly Operating Report and the previously filed March Monthly Operating Report to adjust certain intercompany allocations and filed the revised February Monthly Operating Report (the “Revised February Monthly Operating Report”) and the revised March Monthly Operating Report (the “Revised March Monthly Operating Report” and, together with the April Monthly Operating Report and the Revised February Monthly Operating Report, the “Monthly Operating Reports”) with the Bankruptcy Court. The Revised February Monthly Operating Report and the Revised March Monthly Operating Report are attached hereto as Exhibit 99.2 and Exhibit 99.3, respectively, and are incorporated herein by reference.

Cautionary Note Regarding Monthly Operating Reports

Hancock cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Reports, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of Hancock .  Each of the Monthly Operating Reports is limited in scope, covers a limited time period and has been prepared solely for the purpose of complying with the monthly reporting requirements applicable in the Chapter 11 Cases.  Hancock is not required to publicly update the Monthly Operating Reports to reflect more current facts or estimates or the occurrence of future events, including if the facts, estimates and assumptions upon which any of the Monthly Operating Report are based are erroneous.  The Monthly Operating Reports were not audited or reviewed by independent public accountants, do not contain all of the information and footnotes required by generally accepted accounting principles in the United States, and are subject to future adjustment and reconciliation.  There can be no assurance that, from the perspective of an investor or potential investor in Hancock ’s securities, the Monthly Operating Reports are complete.  The Monthly Operating Reports also contains information for periods which are shorter or otherwise different from those required in Hancock ’s reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”), and such information might not be indicative of Hancock ’s financial condition or operating results for the period that would be reflected in Hancock ’s financial statements or in its reports pursuant to the Exchange Act.  Results set forth in the Monthly Operating Reports should not be viewed as indicative of future results.