Hannover House, Inc. - Quarter Report: 2015 September (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2015

Hannover House, Inc.

(Exact name of registrant as specified in its charter)

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1428 Chester Street, Springdale, AR 72764
(Address of Principal Executive Offices) (Zip Code)

479-751-4500
(Registrant’s telephone number, including area code)

f/k/a "Target Development Group, Inc."

f/k/a "Mindset Interactive Corp."

330 Clematis Street, Suite 217, West Palm Beach, Florida 33401 (561) 514-0936
(Former name or former address and former fiscal year, if changed since last report)

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  o     No  þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  o     No  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  o     No  þ

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes  o     No  þ

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 

The Company’s stock is traded on the OTC “Pinksheets” Markets under the trading symbol: HHSE. The Cusip number for the Company is: 410686 101. The following is true and correct, per our transfer agent, as of and at the period ending on September 30, 2015:

TOTAL COMMON STOCK SHARES IN MARKET: 650,982,809*

Shareholders of Record: 2,018 (Standard Registrar count)

Total Beneficial Shareholders: 344 (Broadridge, ICS count)

Total Authorized Common Stock Shares: 800,000,000

Total Authorized Series "A" Preferred Shares: 10,000,000

* Share count includes 10-mm restricted stock shares issued as collateral to TCA Global Master Fund, which are subject to return to treasury stock. Share count also includes the issuance by Transfer Agent during the current reporting period of a block of approximately 9,854,147 common stock shares to Blackbridge Capital, which Company has demonstrated to have been issued in error by the Transfer Agent, and which occured without meritorious basis. Company has engaged litigation counsel to pursue its rights and remedies in recovering these shares or obtaining financial consideration.

The Transfer Agent for the Company’s stock is:

Standard Registrar & Transfer Company, Inc.

12528 South 1840 East

Draper, UT 84020

Tel. 801-571-8844 / Fax 801-571-2551

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FORWARD-LOOKING STATEMENTS

This disclosure statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases you can identify forward-looking statements by terms such as “may”, “intend”, “will”, “could”, “would”, “expects”, “believe”, “estimate”, or the negative of these terms, and similar expressions intended to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Also, these forward-looking statements present our estimates and assumptions only as of the date of this disclosure statement. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this disclosure statement.

Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films, budget overruns, limitations imposed by our credit facilities, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, and technological changes and other trends affecting the entertainment industry.

PART I — FINANCIAL INFORMATION

The Company's Financial Statements for the three-month period ending September 30, 2015 are contained within the following pages. In compliance with regulations governing FORM 10-Q reports, the information contained within these financial statements is unaudited.

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HANNOVER HOUSE, INC.

CONSOLIDATED STATEMENT OF INCOME & RETAINED EARNINGS

FOR THE THREE-MONTH PERIOD ENDING SEPT. 30, 2015 (UNAUDITED)

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HANNOVER HOUSE, INC.

CONSOLIDATED GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE THREE MONTHS ENDING 9-30-2015

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HANNOVER HOUSE, INC.

Consolidated Balance Sheet / As of Sept. 30, 2015 (Unaudited)

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HANNOVER HOUSE, INC.

Consolidated Balance Sheet / As of Sept. 30, 2015 (Unaudited) / continued 

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HANNOVER HOUSE, INC.

Change In Shareholder’s Equity

For the Three Month Period Ending September 30, 2015

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HANNOVER HOUSE, INC.

Sales by MEDIA and Ranked by Top 15 Titles During Q3, 2015

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited interim consolidated financial statements and related notes to the unaudited interim consolidated financial statements included elsewhere in this report. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These forward-looking statements are based largely on our current expectations and are subject to a number of uncertainties and risks including the Risk Factors identified in our Annual OTC Markets filing for the year ending December 31, 2014. Actual results could differ materially from these forward-looking statements. Hannover House, Inc. is sometimes referred to herein as "we," "us," "our" and the "Company."

The nature of the issuer’s business is driven by the operating entity, Hannover House, which is a full-service producer and distributor of entertainment products (i.e., feature films for theatrical, video, television and international distribution, and a publisher of books).

Hannover House, Inc., is a Wyoming Corporation. Truman Press, Inc., d/b/a “Hannover House” is an Arkansas Corporation.

Hannover House, Inc., f/k/a Target Development Group, Inc. (which was also formerly known as "Mindset Interactive Corp.") was registered as a corporation in Wyoming on January 29, 2009. Truman Press, Inc., d/b/a “Hannover House” was registered as a corporation in California on September 15, 1993, and re-registered in Arkansas effective June 2008. The Ecklan Corporation, registered on March 25, 1998, in the State of Texas, was the predecessor entity to Target Development Group, Inc.

The Company, Hannover House, Inc., as well as Truman Press, Inc., d/b/a “Hannover House” each have an effective fiscal year-end date of December 31.

Neither the Company, Hannover House, Inc., nor the operating entity, Truman Press, Inc., d/b/a “Hannover House” have ever been in bankruptcy. To the best of management’s knowledge, no predecessor entity has ever been in bankruptcy.

Effective January 1, 2010, Target Development Group, Inc., acquired all of the shares of Truman Press, Inc., d/b/a “Hannover House” in a stock-swap agreement. The details of this acquisition venture are described in detail within the information statement posted on the OTC Markets Disclosure Statement of December 14, 2009.

Over the past four years, the Company has defaulted on several loan or credit obligations, but none representing a material event to the Company or falling outside of the ordinary course of business. As previously disclosed through the Company's filings with the OTC Markets, the Company had incurred debt relating to the theatrical releasing costs of the film "Twelve" (debt obligations were accrued with Andersons, AOL, Bedrock Ventures, 42 West, Technicolor, Tribune Ent. and others). As of September 31, 2014 the Company had reduced the cumulative total of the outstanding debt balances for this film from an original gross of $4.2-million (inclusive of obligations to the production company / licensor), down to less than $812,000 as of this reporting period. Other significant obligations of the Company include "P&A" for the release of the film, "Hounddog" (Weinreb loan), "P&A" for the release of "All's Faire In Love" (NBCal Loan), producer / licensor obligations to Interstar Releasing, Fantastic Films and E.E. Smith, all of which are itemized or otherwise included within the Company's financials.

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As of 9-30-2015, there were no further changes of “control”.

As of 9-30-2015, there were no increases of 10% or more of the same class of outstanding equity securities.

During the quarterly reporting period ending 9-30-2015, the Company issued a total of 31,031,291 shares of stock. Additionally, and without legal basis, authorization or prior notification to Company, Standard Registrar & Transfer Co., Inc., issued 9,854,147 shares to Blackbridge Capital, which is the subject of a pending legal action for recover of shares or proceeds. The authorized and legitimate new issuances consisted of a total of 15,972,128 shares issued to Magna Investments, in a debt conversion transaction to reduce the balance owed to TCA Global Master Fund; and 15,089,163 to Blackbridge Capital in consideration of debt reductions for National Bank of California loan balance.

The Company has not experienced any delisting of the issuer’s securities. As of the 9-30-2015, there were no current, past, pending or threatened legal proceedings or administrative actions that could have a material effect on the issuer’s business, financial condition or operations other than those items specifically described hereunder or otherwise disclosed in OTC Markets Filings. As of 9-30-2015 and remaining true through the date of this filing, there were no past or pending trading suspensions by a securities regulator. The legal proceedings, whether past, pending or threatened, all fall under the guidelines of being within the ordinary course of business, and are disclosed in detail in this filing or incorporated within previously filed disclosures with the OTC Markets.

Business of Issuer -- The SIC Codes most closely conforming to the Company’s business activities are: 7822 (Services – Motion Picture & Video Tape Distribution) and 2731 (Books: Publishing). The Company is currently operating. At no time has the Company ever been a “shell company” as defined in the guidelines.

Through the operating entity of “Hannover House,” the Company is actively involved with the production, acquisition and distribution of entertainment products into the USA and Canadian markets, including theatrical films, home video releases, rights licenses of films and videos to Video-On-Demand platforms and television, as well as book publishing (including printed editions and electronic “E-Book” formats).

FILMS & VIDEOS – Most of the film and video titles that are distributed by the Company are “acquired” or otherwise licensed from third-party suppliers, often production companies or media companies seeking to expand their income and market reach through a relationship with Hannover House or through the company’s recently formed multi-studio sales cooperative, Medallion Releasing, Inc. Some of the properties distributed by the Company are “sales agency” ventures, in which the Company performs certain sales & marketing functions on behalf of the owners of the properties, as opposed to having the Company actually purchase or otherwise license rights into the property. In 2010 with the merger of Hannover House and Target Development Group, Inc., the Company began moving away from “sales agency” ventures and pursuing actual rights-licensing / acquisition structures for new titles being released under the Hannover House label, as this form of licensing arrangement can ultimately be more lucrative for the company. Most of the titles being distributed by the Medallion Releasing division are under sales agency agreements, ranging from 15% to 50% revenue splits with the program suppliers and outside labels.

BOOKS / E-BOOKS – The Company remains active in the acquisition and licensing of publishing rights to printed books and e-Books. The gross margins earned by the Company in the release of Books are generally much higher than the margins derived from the release of Film and Video properties; however, the upside revenue potential for books is usually not as high as the potential for Films. So the Company seeks to maintain a balance in its release slate of high-margin book properties, with high-revenue Film and Video properties.

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The use of the term "Company" refers to the combined entities, as reported on a consolidated basis, of Hannover House, Inc., Truman Press, Inc., d/b/a “Hannover House” and Bookworks, Inc. (a special purpose entity utilized for Screen Actors Guild activities and productions), as well as VODWIZ, Inc. (the special purpose video-on-demand portal venture), and Medallion Releasing, Inc. (the multi-studio sales venture). Each of the corporate entities files separate income tax returns with the federal government and respective states of registration; however, financial statements and reports, as of January 1, 2010, refer to the combined and consolidated results of all entities. Hannover House, Inc. is the publicly-traded entity for all operating divisions. Truman Press, Inc., d/b/a “Hannover House” is the operating and releasing division entity for all consumer products. Bookworks, Inc., is a special purpose entity established for the servicing of book and publishing ventures, and more recently, used for Screen Actors Guild productions.

As of 9-30-2015 and remaining true through the date of this filing, the Company does not foresee any probable or existing governmental regulations as having an adverse or material impact to the operations.

During calendar year 2009 (and specifically limited to activities for Truman Press, Inc., d/b/a “Hannover House”), the Company invested approximately $15,000 on activities that could be characterized as ‘research and development.’ During the calendar year of 2010, and under the consolidated reporting of all entities, the Company invested approximately $20,000 on projects and activities that could be characterized as ‘research and development.’ During the calendar year of 2011 and under consolidated reporting of all entities, the Company invested approximately $166,000 on projects and activities that could be characterized as ‘research and development.’ (specifically, the production of feature film / video products). During 2012, the Company invested approximately $287,114 on production projects / R&D assignable; during 2013, the Company made no new investments in production or activities that would be R&D assignable. The company has been involved in some feature film productions during 2014 and the first quarter of 2015, including development, pre-production and post-production work on “Bonobos: Back to the Wild” (nature docudrama), “Mother Goose: Journey to Utopia” (live-action fantasy adventure), “Dinosaurs of the Jurassic” (Documentary), “Shadow Vision” (Sci-Fi Thriller), “The Summoning” (Horror-Thriller), “Shuck and Jive” (Urban Drama) and “Clown Town” (Horror). The Company is also working on structuring financing and distribution ventures for three additional features, “Extreme Operative” (action-adventure), “Dog and Pony Show” (Family-Animal Adventure), “Bridge To Redemption” (Action-Thriller), “The Legend of Belle Starr” (Historic-Action-Western), “True Freshman” (Sports-Christian-Feature), “Over The Edge” (action-adventure), and “Primate” (sci-fi-creature-feature). A previously announced development project, “Wild Oats” has been licensed under a distribution pact between the production company and The Weinstein Company, for which Hannover House is both credited and a profit participant. Production on “Wild Oats” is completed, and stars Shirley MacLaine, Demi Moore and Jessica Lange. The film was directed by Andy Tennant (director of studio megahits “Ever After”, “Sweet Home Alabama” and “Hitch” – all of which surpassed $100-mm in domestic USA Box Office proceeds). The company feels that its participation in facilitating the production of these and other higher-end titles generates many benefits: longer license periods (usually perpetuity), greater revenue opportunities (including international rights), and higher-end titles to serve as locomotives to elevate the company’s stature with theatrical exhibition chains and video mass merchants which can help with catalog and secondary title placements.

The Company has not incurred any non-negligible costs relating to compliance with environmental laws, whether to federal, state or local. As of 9-30-2015, the Company had 12 full-time employees, positions were: CEO, President, VP Sales, Director of Sales, Director of Promotions, Production Manager, Bookkeeper, Film Booker, Receptionist, Technical Services, Publicity Assistant and Warehouse Manager.

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The nature of products and services offered:

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The nature and extent of the issuer’s facilities include a primary office and warehouse combo unit (under lease from Elder Properties, Springdale, AR), comprising approximately 6,000 square feet.

Item 3 Quantitative and Qualitative Disclosures About Market Risk

Investment in the Company's Stock bears similar risks as may exist with other stocks trading on the OTC Markets board. The trading price for Company's Stock Shares can vary significantly based upon a variety of factors unrelated

to the Company's actual value or revenue achievements. On an accrual basis, the Company is generating profits each

quarter, with regular DVD and Blu-Ray product sales supplemented with long-term receivables for Subscription Video-On-Demand and Television sales. However, on a cash-flow basis, the Company's cash resources are often strained by immediate and long-term debt obligations. Some investors and shareholders have expressed discomfort with the Company's persistently tight cash position, which has been the result of balancing ongoing operational needs with debt management and new release activities against product cash flows. Conversely, many shareholders have also expressed resistance to the concept of issuing equity shares under "debt conversion" structures, which would relieve much of the cash-flow burdens but would result in a dilution of shareholder equity. Accordingly, management has worked to find the best balance of maximizing shareholder value and return, while minimizing equity dilution activities. There can be no assurance that ongoing cash flow from product sales will, by itself, be sufficient to meet the Company's combined operational, debt-management and growth needs. To address the Company's cash position, management has initiated an agreement with an Accounts Receivable-based lender, to accelerate cash flow from current product sales and thus facilitate faster growth into new areas (such as the Company's "VODwiz.com" streaming venture), as well as to provide working capital to enable the Company's Film and Television Rights Library to be more efficiently exploited.

While there are no material threats at present to the Company's ongoing viability, there can be no assurance that the majority of long-term creditors will continue to comply with debt reduction and installment payment agreements. And while the Company continues to generate DVD and Blu-Ray sales to major retailers (and Video-On-Demand contracts through the major VOD portals), there can be no assurance that current and past sales performance will continue into the future. The remedies available to the Company for continued viability and growth are revenues from product sales and licenses, credit arrangements (both with lenders and suppliers) and stock-equity opportunities (ranging from shelf-registration of new shares to "debt-conversion" ventures to alleviate the cash-flow burden from older, qualifying payables). Investment in the Company's Stock Shares bears significant risks, as well as significant upside potential. The "Price-Earnings Ratio" for publicly-traded entertainment stocks in the Company's area of activity results in an average P/E rate of 22-times. The current P/E ratio for Company's (Hannover House's) is 3.1, based on an annualized projection of the current reporting period. This extremely low P/E rate for Hannover House shares relative to the other publicly traded companies operating in the same business sector, suggests that the shares are currently trading at a price that is undervalued by a factor of approximately 6-times when compared to the industry average.

Item 4. Controls and Procedures - Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of September 30, 2015, the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and President of the effectiveness of our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures continued to be effective as of September 30, 2015 .

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Item 4T. Controls and Procedures

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d) of the Exchange Act, the Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, also evaluated whether any changes occurred to the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, such control. Based on that evaluation, there has been no such change during the period covered by this report.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings. As of September 30, 2015, the Company was involved in the following legal matters for which ongoing court activities / filings or adjudicated status were still pending:

1). TCA GLOBAL MASTER FUND – The previously disclosed balance due to TCA Global from Company, was the subject of a Florida Courts judgement issued during Q3, 2015. The Company noted that the court filings from the attorneys for TCA contained several demonstrably erroneous statements, including the wrong balances due to TCA, and misstatements that TCA had been unable to secure payment via “debt conversion” transactions (which had been occurring regularly throughout the prior year). Rather than spend significant legal fees to rebut and contest the statement errors, Company decided instead to pay off the proper balance, in order to enjoy the benefits of the release of the UCC Security Interest and the return of the 10-million “collateral” shares of Company’s stock that were issued to TCA back in May of 2013. As of the date of this filing, the balance due to TCA has been reduced to approximately $61,000, and is expected to be paid in full during the month of December.

2). STANDARD REGISTRAR – The Company has engaged George B. Morton, Esq., to pursue an action to collect back from Standard Registrar an issuance of approximately 9.8-mm shares that were released by Standard to Blackbridge Capital in mid-September without legal basis or authorization. The value of the shares at the date of issue was approximately $61,000, which sum falls below the jurisdiction under Federal Court rules; accordingly, the original plan to file in US Federal Court in California has been modified to file as a civil court action in Arkansas.

3). STOCK MANIPULATOR’S SUIT – The Company has engaged George B. Morton, Esq., to pursue an action against five known members of an organized stock “bashing” gang that have collectively damaged the Company’s share price by more than $10-million in market capitalization value over the past three years. Due to the size of the damages in this case, the jurisdiction will be the US Federal Court, western district of Arkansas.

A related action to pursue charges for the criminality of the actions taken by these manipulators is also being prepared for this same court venue.

4). BRENDA HANCOCK VS. HANNOVER HOUSE – One of the Company’s “author” clients has filed a lawsuit in Washington County, Arkansas, seeking an early termination of the distribution rights license extended to Hannover House for her book, “One of the Lucky Ones.” The Company had previously agreed to an early termination of the license due to sluggish sales for the book. Accordingly, the Company response (to be filed in early December) will be to seek payment of its legal fees to respond.

5). HANNOVER HOUSE VS. JSJ INVESTMENTS – Company offered to pay JSJ Investments in CASH for a convertible note, based upon the clear language in the note which stated the legal interest rate of 17% plus the principal. JSJ refused to accept the cash and demanded to “convert” the obligation into freely trading shares at a greater than fifty-percent discount to current market pricing. It is Company’s position that the note clearly has a procedure for the payment of the principal and interest in cash, and that the “conversion” option only applied in the event of a default on the note. The representative for JSJ communicated that it is their position that they are entitled to massively discounted shares, and that the cash payment language was merely a formality, and never an actual option. Company’s response to that position is to let the court decide what is legal under the law, recognizing the usury rate caps for lenders and the presupposition that the note was entered into by both parties in good faith.

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Item 1A. Risk Factors

Other than as set forth in this FORM 10-Q filing, there are no specific risk factors relating to the Company's securities that are not universally applicable to other equities trading on the OTC Markets.

Key Man / Principals - The Company is reliant upon the continued employment and work performance of the two, principal managers, Eric Parkinson (CEO) and D. Frederick Shefte (President). As an accommodation to benefit the Company's cash flow, both Parkinson and Shefte have been deferring a majority of their salaries. Additionally, as has been required by many third-party program suppliers, Parkinson has often been listed as a "key man" to the rights licenses or sales venture agreements for specific acquisitions, due to his successful home video sales track record. Additionally, the engagement of Tom Sims as VP of Sales for both Hannover House, Inc. and Medallion Releasing, Inc., makes him into an important and key man employee. The cessation of employment by any of these principals could have a material and negative impact on the Company, as current cash flows would not facilitate the hiring of comparably qualified executives, and the loss of Parkinson as "key man" could result in multiple title agreement cancellations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable to Issuer.

Item 3. Defaults Upon Senior Securities

Not applicable to Issuer, although a previously active credit arrangement with TCA Global Master Fund has since been terminated by mutual consent.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable to Issuer.

Item 5. Other Information.

Additional Information required by the OTC Markets that is not (necessarily) required under S.E.C. reporting guidelines:

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(OTC MARKETS “GUIDELINES FOR CURRENT REPORTING STATUS” - PART D / MANAGEMENT STRUCTURE AND FINANCIAL INFORMATION

Item 11 (A-1 through A–6) – The name of the Chief Executive Officer, members of the board of directors, as well as control persons are:

B.                 Legal / Disciplinary History. Neither of the board of directors members has been involved in any form of criminal conviction or proceeding or named as a defendant in a pending criminal proceeding; neither director has been suspended, vacated or otherwise barred from any involvement in securities, commodities or banking activities; neither director has been affected by a finding or judgment by a court of competent jurisdiction, the Securities and Exchange Commission, the Commodity Futures Trade Commission or a state securities regulator of a violation of federal or state securities or commodities laws; neither director has received an order by a self-regulatory organization that permanently or temporarily bars or limits such person’s involvement in securities activities.

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C.                 Disclosure of Family Relationships – There are no family relationships existing between or among either of the Board of Directors, or any other officers, directors, or beneficial owners of more than five percent (5%) of any of the class of the issuer’s equity securities.

D.                 Disclosure of Related Party Transactions – The Company was not involved in any Related Party Transactions valued at $120,000 or more, or valued at more than one percent of the issuer’s total assets at year-end for its last three fiscal years.

E.                  Disclosure of Conflicts of Interest – There are no known conflicts of interest.

(OTC Markets) Item 14 – Beneficial Owners – The total count of Beneficial Owners as reported to the Company by Broadridge ICS (as of Dec. 31, 2014) was 343. As of December 31, 2014 and remaining true through the date of this filing, the Company was aware of only two shareholders controlling directly or beneficially more than five percent (5%) of any class of the issuer’s total authorized equity securities (except as described in Item 14 c) below):

a)                  Eric F. Parkinson (CEO), 1428 Chester St., Springdale, AR 72764 – holding 43,141,649 shares of Common Stock. Parkinson also owns 1,800,000 shares of Series A Preferred Stock. Mr. Parkinson retains a lien to reclaim up to 31.8-million shares from his original allotment of TDGI shares, which were a voluntarily surrendered back to the company’s treasury pending achievement of certain corporate and revenue goals for the company under his direction as C.E.O. During Q2 (2012), Parkinson allocated from his personal holdings a total of 1,800,000 shares of restricted stock, for the benefit of key employees and as additional consideration for a term note extended to the Company by a private investor. Parkinson has an agreement with the Company regarding a performance-based formula for the recapture / replacement of these shares, to occur no sooner than July 1, 2013, but since extended to January, 2016 for re-evaluation.

b)                  Don Frederick Shefte (President), 3741 N. Old Wire Road, Fayetteville, AR 72703 – beneficially owned 31,487,546 shares of Common Stock. Shefte also owns 1,200,000 shares of Series A Preferred Stock. Upon closing of the acquisition of Truman Press, Inc. by Target Development Group, Inc., in January, 2010, the TDGI stock allocation for Shefte was divided with Shefte receiving 50,987,547 shares and each of his two adult children receiving 6,373,443 shares under a pre-existing agreement relating to Shefte’s ownership interested in Truman Press, Inc. Mr. Shefte retains a lien to reclaim up to 5-million shares from his original allotment of

TDGI shares, which were a voluntarily surrendered back to the company’s treasury pending achievement of certain corporate governance goals for the company under his direction as President.

Item 11 A1-A6 – Supplemental Disclosures. i). The Company has completed a Form 10-12(g) Registration Statement. This document is expected to be filed with the Securities & Exchange Commission on or before Jan. 15, 2016, in order to include the full year-end audits for the current year (2015), as well as the newly completed audit for calendar year 2014. Company is prepared to ‘close-out’ the 12-31-2015 period at the close of business on Thursday, Dec. 31, in anticipation of the corporate goal of an expeditious filing of the Form 10 Registration Statement).

ii). Company expects to fully retire the debt balance due to TCA Global Master Fund this calendar year, which will trigger the return of 10-mm shares of common stock issued to TCA in 2013 as partial collateral for a business loan.

iii). Company has recently enacted a change of corporate direction which puts a greater emphasis on theatrical release activities, with the generation of fees for release services as well as from revenue collections.

iv). Company plans to add a total of three (3) new members to the Board of Directors in January, 2016, timed with the activation of Officers & Director’s Liability Coverage and the filing of the Form 10 Registration;

v). Beginning in January, Company, and dependent on factors including the Common Stock PPS at that time, as well as the Company’s status with certain, key creditors, the Company may want to utilize a portion of cash collections to purchase common stock shares “off the open market” and retire said shares back into treasury.

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vi). Company hopes to complete installment payment plans in December for several key creditors, including the Anderson’s (“Twelve P&A Loan”), Michael Weinreb (“Hounddog P&A Loan”), Second Star Investments (“Twelve P&A Loan”), Bedrock Ventures (“Twelve Acquisition Loan”), E.E. Smith (“Boardinghouse Stew”) and Interstar Releasing (“Dawn of the Living Dead” dispute). Management believes that the stronger cash flow being generated from current enhanced theatrical and home video releasing activities can be utilized to reduce or retire the debt burden from these key creditors – all of which have demonstrated patience for several years while the Company has grown.

Item 6. Exhibits

Examples of theatrical one-sheet poster arts for recent, current and upcoming theatrical releases from Company.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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 CERTIFICATION

I, Eric F. Parkinson certify that:

EXHIBITS

EXAMPLE “KEY ART” POSTER IMAGES FOR

CURRENT & UPCOMING HANNOVER HOUSE THEATRICAL RELEASES

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