UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

United States

Securities and Exchange Commission

Washington, D.C. 20549

_________________

FORM 10-Q

_________________

[X] 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.For the Quarterly Period Ended June 30, 2020

[  ] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

[X] For the Three Months Ending Ended June 30, 2020

[  ] Transition Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934

For the Transition Period from __________ to __________

Commission File Number: 00028723

HANNOVER HOUSE, INC.

(Exact name of registrant as specified in its charter)

_________________

Wyoming000-2872391-190697391-1609973

(State or Other Jurisdictionother jurisdiction of

incorporation or organization)

(Commission

(I.R.S. Employer

of Incorporation or Organization)File

Identification Number)

Identification No.)

1428 Chester Street, Springdale,

355 N. College Ave. Suite 4

Fayetteville, AR 72764
72701

(Address of Principal Executive Offices) (Zip Code)principal executive offices and zip code)

479-751-4500

(818) 481-5277

(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)

_________________

This company’s Securities are not yet registered under Section 12(g) of the Exchange Act

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ] No [X]

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 precedingpast 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[X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405(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[X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 if Regulation S-K (229.405 of this Chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-Q or any amendments to this Form 10-Q. Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o[  ]Accelerated filer o[  ]
Non-accelerated filer o[  ] (Do not check if a smaller reporting company)Smaller reporting company þ[X]

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

 

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)The aggregate market value of the Securities Exchange Actvoting stock and non-voting common equity on March 31, 2020 (consisting of 1934 subsequentCommon Stock, $0.0001 par value per share) held by non-affiliates was approximately $8,591,314 based upon the most recent sales price of $0.012 for such Common Stock on April 8, 2020. As of March 31, 2020 there were 811,529,996 shares of Common Stock in issue (of which 95,587,152 were subject to the distributionRule 144 sale restrictions); additionally as of securities underMarch 31, 2020 there were 4-million shares of Series “A” shares at a plan confirmed bypar value of $.0001 each, which shares carry a court.     Yes  1000-to-1 voting authority and a 100-to-1 conversion option into Common Stock.

As of June 30, 2020o,      No  þ

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock,our Common Stock was:

a. Total Common Stock Shares in issue as of the latest practicable date. June 30, 2020: 811,529,996

The Company’s stock is traded on the OTC “Pinksheets” Marketsb. Above Shares Restricted from Sale 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:Rule 144: 95,587,152

a.Total Common Stock Shares in issue as of September 30, 2015: 754,843,404*
b.Above Shares Restricted from Sale: 103,860,595*

 

TOTAL COMMON STOCK SHARES IN MARKET: 650,982,809*715,942,844

 

c.Series “A” Preferred Shares: 3,000,000

c. Series “A” Preferred Shares: 4,000,000

 

Shareholders of Record: 2,018205 (Standard Registrar count)

 

Total Beneficial Shareholders: 344338 (Broadridge, ICS count)

 

Total Authorized Common Stock Shares: 800,000,000900,000,000

Total Authorized Series "A"“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.DOCUMENTS INCORPORATED BY REFERENCE: None

 

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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TABLE OF CONTENTS

 

  
Page
PART I.  FINANCIAL INFORMATIONI: 
   
Item 1.Business3
Item 1A.ITEM 1.  FINANCIAL STATEMENTS
Consolidated Statements of Income and Retained Earnings5
Consolidated General and Administrative ExpensesRisk Factors6
Item 1B.Unresolved Staff Comments9
Item 2.PropertiesConsolidated Balance Sheets7 - 89
Item 3.Legal Proceedings9
Item 4.Shareholders’ Equity & Statement of Cash Flows / Sales DetailMine Safety Disclosures9 – 11

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS12
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK16
ITEM 4.  CONTROLS AND PROCEDURES17
   
PART II.  OTHER INFORMATIONII: 
   
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities10
Item 6.ITEM 1.       Selected Financial DataLEGAL PROCEEDINGS10
Item 7.17Management’s Discussion and Analysis of Financial Condition and Results of Operations11
Item 7A.Quantitative and Qualitative Disclosures About Market Risk13
Item 8.Financial Statements and Supplementary Data13
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure13
Item 9A.Controls and Procedures13
Item 9B.Other Information14
   
PART III: 
 ITEM 1A.RISK FACTORS
Item 10.Directors, Executive Officers and Corporate Governance15
Item 11.Executive Compensation16
Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters17
Item 13.Certain Relationships and Related Transactions, and Director Independence17
Item 14.Principal Accounting Fees and Services18
   
PART IV: 
 ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item 15.Exhibits, Financial Statement Schedules18
   
SIGNATURESITEM 3.DEFAULTS UPON SENIOR SECURITIES18
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS18
ITEM 5.      OTHER INFORMATION18 – 20
ITEM 6.       EXHIBITS21
SIGNATURES22 – 2319
   
FINANCIAL STATEMENTSF-1

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

 

Page 3

FORWARD-LOOKING STATEMENTS

This disclosure statementThe discussion contained in this 10-Q under the Securities Exchange Act of 1934, as amended, contains “forward-looking statements” withinforward-looking statements that involve risks and uncertainties. The issuer’s actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the meaningfuture, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “the Company believes,” “management believes” and similar language, including those set forth in the discussions under “Notes to Financial Statements” and “Management’s Discussion and Analysis or Plan of Operation” as well as those discussed elsewhere in this Form 10-Q. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. Statements contained in this Form 10-Q that are not historical facts are forward-looking statements that are subject to the “safe harbor” created by 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.

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PART I

 

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.ITEM 1. BUSINESS

 

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.Issuer’s Business, Products and Services

 

Page 4

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

Page 6

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

 Page 8

Page 9

HANNOVER HOUSE, INC.

Change In Shareholder’s Equity

For the Three Month Period Ending September 30, 2015

Page 10

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, whichCompany is a full-service producermedia production and distributor of entertainment products(i.e.,distribution enterprise, involved in book publishing, feature films for theatrical,film and 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 offeature films and videos to Video-On-Demandthrough various media platforms and television, as well as book publishing (including printed editions and electronic “E-Book” formats).territories worldwide.

 

FILMS & VIDEOS – Most of the film and video titles thatWholly-owned subsidiaries 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(for handling non-Hannover House and Target Development Group, Inc.producer clients), 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 Guildbook publishing activities, and productions),as well as VODWIZ, Inc.(to act as the special purpose video-on-demand portal venture), andcorporate signatory for compliance purposes with the Screen Actors Guild. Both Medallion Releasing, Inc and Bookworks, Inc. are Arkansas domiciled corporations. Income and costs from these two subsidiaries are incorporated into the Company’s consolidated financial statements.

A.Describe the issuers’ principal products or services, and their markets

Company publishes fiction and non-fiction books; Company’s media distribution includes the release of films to theatres, home video, digital streaming formats, television outlets and international licensors. Company is working with Vodwiz, Inc. (which has secured non-affiliate private funding) for the multi-studio sales venture).development and launch of a new digital streaming site to be named “MyFlix.” The business model for MyFlix is to consolidate feature films and television series programming owned by a wide range of studios and content owners, into a single destination digital streaming site.

The revenue model for MyFlix will be to pay third-party streaming and billing costs off the top and divide remaining revenues on a fifty-fifty basis between the program suppliers and with Vodwiz / MyFlix. Consumers visiting the MyFlix website (or accessing the service through mobile APPS or over-the-top devices such as Roku, AppleTV or hardware installed APPS) Eachcan purchase movies or TV episodes on a “per transaction basis” (ala Amazon) or alternatively, can open a monthly subscription with MyFlix for unlimited access to approximately half of the corporate entities files separate income tax returnsprogramming otherwise available for per-transaction access. As of the date of this filing, forty-three program suppliers, collectively representing over 12,000 titles, had agreed to participate in the MyFlix service, which would position the site as number two only to Amazon in terms of total programming.

The growth of digital streaming services – both as a general market trend and more recently as a preferred media for home access of entertainment products during the COVID-19 pandemic - has created both a boom and bust in the independent film sectors. Consumers are less likely now to purchase DVDs of unknown movies knowing that the same ten-dollar cost could cover a month’s subscription to a service such as Netflix with over 1,000 titles at any given time. As other studios scramble to open “studio specific” streaming services, Hannover House believes that the federal government and respective statesVodwiz / MyFlix model is more like the successful Walmart retail strategy of registration; however, financial statements and reports, asoffering a wider selection of January 1, 2010, referprogramming at everyday low prices. Hannover House has an option to purchase Vodwiz, subject to the combinedachievement of obtainable corporate benchmarks which include the filing of the Form 10 Registration and consolidated resultsthe resolution or dismissal of all entities. four foreign judgments for which the Company has meritorious defenses and legal strategies to oppose.

3

Hannover House, Inc. iswas originally incorporated in California in September, 1993 under the publicly-traded entity for all operating divisions.name of Truman Press, Inc., d/b/dba “Hannover House.” The company reincorporated Truman Press, Inc. in the State of Arkansas and operated the company privately until December, 2009 at which time a merger occurred with Wyoming-domiciled Target Development Group, Inc., formerly trading on the OTC Pinksheets under the ticker symbol TDGI. Truman Press, Inc., dba “Hannover House” became the effective surviving entity of the merger with Target Development Group, Inc., and in 2011, the company’s petition to the Financial Industry Regulatory Agency (FINRA) for an official corporate name change and ticker symbol change was approved after a lengthy analysis of the company’s history and activities. At that time, the company’s name was officially certified as “Hannover House, Inc.” and the trading ticker symbol was changed to “HHSE.” A similarly named entity (“Hannover House, Inc.”) was registered many years earlier (2005) in Arkansas, but immediately abandoned within less than thirty (30) days from initial registration, due to a change in the Arkansas film incentives program which no longer provided special benefits to Arkansas-based entities. The 2005 Arkansas filing does not now, nor ever has existed as an operating company. Efforts by the actual and operating Hannover House, Inc. (of Wyoming) to expunge the records of the abandoned Arkansas filing have not succeeded. However, there is substantial public record evidencing that Hannover House, Inc., is the operating, Wyoming corporation, and releasing division entity for all consumer products. Bookworks,that no reasonable parties could possibly confuse the robust, publicly-traded Hannover House, Inc., iswith the similarly named, but non-operating entity abandoned as an Arkansas filing more than 15 years ago.

Hannover House, Inc. has released over four hundred titles to the USA Home Video markets since taking on video product distribution activities s in 2002. Some of the better known home video releases include: “TWELVE” from director Joel Schumacher - starring Curtis “50-Cent” Jackson, Zoe Kravitz, Emma Roberts and Kiefer Sutherland; “GRAND CHAMPION” - starring Bruce Willis, Julia Roberts and George Strait; “SAVAGE LAND” – starring Graham Greene, Corbin Bernsen, Vivian Schilling and Charlotte Ross; “TOYS IN THE ATTIC” – starring Forest Whitaker, Joan Cusack and Cary Elwes; and “BONOBOS: BACK TO THE WILD” – starring Luke Evans and Rebecca Hall.

Regarding book publishing, Hannover House has achieved best-seller status on both the fiction and non-fiction charts. The best-selling fiction title has been the suspense-thriller, “QUIETUS” by author Vivian Schilling (with over 100,000 copies in print, including mass market editions from Penguin-Putnam and Onyx Publishers); the best-selling Fiction title to date has been “Blood, Money & Power: How L.B.J. Killed J.F.K.” from attorney Barr McClellan (over 120,000 copies in print, inclusive of mass market editions).

The company has also released thirty-two feature films to theatres, beginning in 2008 with “HOUNDDOG a special purpose entity established for the servicing of bookdramatic feature starring Dakota Fanning, and publishing ventures,two top performing feature documentaries, “TURTLE: THE INCREDIBLE JOURNEY” (2011) and more recently, used for Screen Actors Guild productions.ON ANY SUNDAY: THE NEXT CHAPTER” (2014).

Employees

 

As of 9-30-2015June 30, 2020, the Company had two full-time employees and remaining true throughone full-time, short-term employee. The full-time employees were Eric F. Parkinson (CEO and SECY), and D. Frederick Shefte (PRESIDENT), each working on an unsalaried basis. The one full-time, short-term employee is Randall Blanton, working as interim Chief Financial Officer (CFO) for a period of between ninety (90) and one-hundred-eighty (180) days or until such time that the company has obtained Directors and Officer’s Liability Insurance (“D&O”) coverage, at which time, Mr. Blanton’s short-term affiliation will be converted into a full-time employment status with a term of at least one (1) year. During the interim process, Mr. Blanton is being paid as an outside contractor at the monthly rate of four-thousand dollars (USD $4,000).

Issuer’s Facilities

As of the date of this filing, the Company does not foresee any probable or existing governmental regulationshold a direct lease on offices; however, as having an adverse or material impacta trade-out for marketing services with Vodwiz, Inc., Company has been granted occupancy of offices at 355 N. College Ave., Suite N, Fayetteville, AR, 72701, consisting of approx. 1,380 square feet, including four executive offices, a conference room, two bathrooms and a kitchen. For purposes of accounting and revenue and expense recognition, Company is accruing costs of $2,050 per month for office space value, and matching this sum with a ledger entry for marketing services.

Available Information

Issuer utilizes M2 Compliance Corporation to file reports and other disclosures electronically with the operations.U.S. Securities and Exchange Commission (SEC) for information statements, financial reports as well as for the upcoming Form 10 Registration statement. The company’s financials and other disclosures may also be found on the OTC Markets website, at www.OTCMarkets.com/HHSE.

4

Officers, Directors, and Control Persons

Name of Officer/Director and Control Person Affiliation with Company (e.g. Officer/Director/Owner of more than 5%) Residential Address (City / State Only) Number of shares owned  Share type/class Ownership Percentage of Class Outstanding  Note
Eric Parkinson Officer / Director Fayetteville, AR  43,141,649  Common Stock  5.32% Rule 144 Restrictions
Eric Parkinson Officer / Director Fayetteville, AR  2,400,000  Series “A” Preferred  60% 1000-to-1 Voting Value; 100-to-1 conversion
Don Frederick Shefte Officer / Director Fayetteville, AR  31,487,546  Common Stock  3.88% Rule 144 Restrictions
Don Frederick Shefte Officer / Director Fayetteville, AR  1,600,000  Series “A” Preferred  40% 1000-to-1 Voting Value; 100-to-1 conversion

 

During calendar year 2009 (and specifically limited to activities for Truman Press, Inc., d/b/the applicable reporting period, officer D. Frederick Shefte completed a “Hannover House”), the Company invested approximately $15,000 on activities that could be characterized as ‘research and development.’ During the calendar yeardissolution of 2010, andmarriage with Diana Shefte; 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), “Dinosaursterms 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 Legenddivorce settlement, the officer (affiliate) shares beneficially owned by D. Frederick Shefte as listed in the above table, will eventually be transferred to Diana Shefte, under the specific sale restriction rules governing the disposition of Belle Starr” (Historic-Action-Western), “True Freshman” (Sports-Christian-Feature), “Over The Edge” (action-adventure),andPrimate” (sci-fi-creature-feature).A previously announced development project, “Wild Oats” has been licensedaffiliate-owned shares 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.

Page 14

The nature of products and services offered:Rule 144.

 

A.The principal productsPlease identify whether any of the Company, and their respective markets are:persons listed above have, in the past 10 years, been the subject of:

 

 i.1.Theatrical films – released to theatresA conviction in the United Statesa criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);

Not Applicable

 

 ii.2.Home Video Products (DVDs, Blu-Rays, Digital Copies) – released to video specialty retailers, mass-merchandisers, bookstores, schools, libraries and rental outlets (including kiosks)The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in the United States and Canada;any type of business, securities, commodities, or banking activities;  

Not Applicable

 

 iii.3.Video-On-Demand releases – filmsA finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and videos offered for direct ‘in-home viewing’ by consumers viaExchange Commission, the Commodity Futures Trading Commission, or a varietystate securities regulator of service providers.a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or

Not Applicable

 

 iv.Books and E-Books – sold through bookstores, schools, libraries, internet retailers and streamed through a variety of e-Book platforms.

B.4.The primary distribution methods usedentry of an order by the Company for all consumer product goods can be categorized as: “two-step wholesale” distribution (wherein the Company sells its products to an authorized wholesale distributor, which in turn, resells the products to retailersa self-regulatory organization that permanently or consumers) and “direct distribution” wherein the Company sells its products directly to consumerstemporarily barred, suspended, or directly to the end-user retailer.

C.The Company has announced, and included in previously published disclosures, a listing of some of the principal, upcoming theatrical films that will also be released onto home video formats.

D.Competitive Position – The Company competes for theatrical screens and retail (home video) shelf space against seven (7) Major Studio suppliers and approximately eight (8) independent studio suppliers. While all of the Major Studio competitors operate their own (in-house) home video distribution divisions, only three of the independent studio suppliers operate both theatrically and in the home video markets. Operating a home video releasing label “in-house” provides the Company with an advantage in the solicitation of titles for acquisition, as well as provides greater control over the Company’s cash-flow and corporate goals.

E.Materials and Suppliers – The principal service providers to the Company are listed in detail in this disclosure, below. The principal suppliers of new release film and video products include the following production companies and programming sources(listed alphabetically):Allegheny Image Factory; American Family Movies; Associated Television; Atlantic-Pacific Picdtures; Atlas Films; BerVon Entertainment; Cinetic Media; CMD; Daybreak Pictures; Empire Film Group, Inc.; Eurocine International; Gaumont, SA; Green Apple Films; Little Film Company; Origin Motion Pictures; Plaza Entertainment, Inc.; Phoenix Entertainment; Phoenix Releasing Group; Sola-Media, GmbH; Shoreline Entertainment; SND Films; Studio 3 Entertainment; PWI-Veracruz Entertainment and XVIII Entertainment. The principal suppliers of books for the Company to publish include (listed alphabetically): James Danielson, Phil Goodman, Brenda Hancock, Vivian Kaplan, Barr McClellan and Vivian Schilling. The Company sees no shortage of properties available for acquisitionotherwise limited such person’s involvement in any type of the applicable media.

F.

Dependence on Major Customers – Two of the Company's current customers as of 12-31-2014 contributed fifteen percent (15%)business or more to the overall, annualized sales revenues. Wal-Mart Stores, Inc. (inclusive of sales to their SAM’S Clubs division), has been purchasing most of the Company's new release DVD titles. The Company does not see the Wal-Mart market share as an unhealthy dependence on a key customer, as Wal-Mart constitutes a much smaller share of the Company’s overall revenues than for many Major Studios, and the Company does not anticipate that the growth in sales to Wal-Mart Stores, Inc., will grow disproportionately with the Company’s other customers. Medallion Releasing has commenced activities for the international sales and licensing of higher-end properties owned or controlled by the Company, the revenue results for which also exceed the fifteen percent (15%) threshold of total, annualized revenues. The Company does not feel that the rapidly growing sales revenues being realized from the international markets poses an unreasonable or viable threat to operations, as sales are cumulative over multiple licensing agreements for specific territories, media and titles.

securities activities.

 

Response: On October 8, 2019, Company was advised of an order from the Arkansas Securities Commission regarding the issuance of a convertible debt instrument to JSJ Investments, Inc. in 2014, which transaction was not registered with the Arkansas Securities Commission. Company was ordered to not issue any additional convertible debt instruments from within the State of Arkansas if such instruments are not registered within the State of Arkansas Securities Commission. Company was advised on a call with the Commission on October 10, 2019 that this policy in Arkansas is effective until such time that the Company is otherwise a fully reporting and registered with the Securities & Exchange Commission. Company has requested an appeal and administrative hearing to remove the order on multiple causes of action. The initial step of the appeal process occurred in late November, at which time, a representative of the Arkansas Dept. of Securities concurred that the transaction in question was not with an Arkansas resident or Arkansas entity, and therefore may not be subject to Arkansas Laws. There will be an additional appeal process hearing at such time that the COVID-19 pandemic shut-down of courthouses and non-essential hearings has been lifted. Based upon prior calls with the Arkansas Securities Commission and with appropriate counsel, Company will present the appropriate evidence at this upcoming hearing that should result in a dismissal of the Arkansas C&D order.

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ITEM 1A. RISK FACTORS.

Investors and prospective shareholders should carefully consider the risks described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. The occurrence of any of the following risks could harm our business, financial condition or results of operations.

Risks Related to Our Business

The company’s previous core-business of DVD Distribution is being eroded and replaced with digital streaming media for deliver to consumers.

During the years 2004 through 2008, the company was selling nearly four-million DVD units per year to Walmart Stores, Inc., primarily for the “budget bin” business (at suggested retail prices of $5.00 or less), in addition to a robust new-release business for two or three higher priced DVD titles per month. Beginning with the emergence of the BluRay format, available retail shelf space at Walmart, Target, Best Buy and other major USA retailers began to shrink for independent films. Beginning with the emergence of the Netflix / Amazon Prime models of direct-to-home digital delivery of entertainment, the consumer buying trends have evolved away from DVD and BluRay units in favor of home streaming. While Hannover House is moving its titles into the streaming media – both through multiplatform placements as well as through the planned “MYFLIX” multi-studio site, there can be no assurance that the revenues previously generated by DVD and BluRay physical units will be fully replaced with digital streaming revenues.

The Company needs additional capital for new venture development, new product acquisition, general operations and existing debt management.

The development, production and distribution of original content feature films – as well as the onboarding and launch of the MyFlix streaming portal each demand significant funding resources which exceed the company’s abilities from current revenue levels. To continue with the acquisition (or production) of commercially viable feature film products – and to finance the costs to on-board titles and launch the MyFlix streaming site – Company will be reliant upon outside financing which may not be available. Sources which the Company plans to pursue include the issuance of a S1 stock registration filing to raise up to eight million dollars (USD $8,000,000) for such ventures. Other financing options include the use of international pre-sales and various co-production and state film incentives to provide the capital for high-profile feature film productions. Currently, the Company has no established bank-financing arrangements. Therefore, it is likely that the Company’s future financing need would involve some form of registration offering or a future private offerings of the Hannover House, Inc. equity securities, debt financings, or strategic partnerships and other arrangements with corporate partners.

We may incur significant costs to ensure compliance with corporate governance and accounting requirements.

With the Company’s impending registration through the Securities and Exchange Commission, the enhanced level of compliance and disclosure – including audit and review requirements – may result in a strain on the Company’s resources. New operational procedures will need to be implemented and maintained, to comply with the Company’s public company reporting requirements, including operational compliance under the Sarbanes-Oxley Act of 2002, and other rules implemented by the SEC. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.

Our future success is substantially dependent on the performance and continued service of Eric Parkinson, our Chief Executive Officer.

We are presently substantially dependent on the experience, abilities, industry relationships and continued services of Eric F. Parkinson, our Chief Executive Officer. The loss of Mr. Parkinson’s services would be highly detrimental to the Company’s ongoing and future business, and his replacement with an executive with Mr. Parkinson’s level of experience and prior success in the entertainment distribution industry could be prohibitively expensive.

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G.The Company does not own or control any patents, franchise or concessions. The licenses and royalty agreements fall under the category of being part of the ordinary course of business.

 

H.The company does not need any government approvals of principal products or services.

 

The natureOur future growth will require the recruitment of additional qualified employees, and extentthere is no assurance that we will be able to find such employees on acceptable terms.

To accommodate our future growth, we will need to increase the depth and experience of our employees and management team. Our future success will depend to a large degree upon the active participation of our key officers and employees. There is no assurance that we will be able to employ additional qualified persons on acceptable terms. Lack of qualified employees will adversely affect our business development.

Risks Related to Our Common Stock

Investors / Shareholders may experience a dilution of ownership interest because of the issuer’s facilitiesfuture issuance of additional shares of our common stock and our preferred stock.

In the future, Hannover House, Inc. may issue authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. The Company is currently authorized to issue an aggregate of 900,000,000 shares of capital stock, but anticipates changing the authorized level of shares to 1-Billion in total (to accommodate the upcoming S1 stock offering which calls for the sale of up to 150-million shares in three stages of 50-million shares each).

The Company may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock are then quoted on the OTC or other quotation system.

Our common stock is subject to the “penny stock” rules of the SEC and the trading volume in our securities is, to date, modest, which can make transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The SEC has adopted Rule 15g-9, which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks; and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (i) obtain financial information and investment experience objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

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The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (i) sets forth the basis on which the broker or dealer made the suitability determination; and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Our stock price may be highly volatile and subject to wide fluctuations due to many factors, including a substantial market overhang.

The market price of our common stock may be highly volatile and subject to wide fluctuations in response to quarterly variations in operating results, announcements of distribution agreements, new affiliations or new products and services by us or our competitors, changes in financial estimates by securities analysts, lack of market acceptance of our products, or other events or factors, including the risk factors described herein. In addition, the stock market in general experiences significant price and volume fluctuations that are often unrelated to a company’s operating performance. As with any public company, we may be subject to securities class action litigation following periods of volatility in the market price of our securities which could result in substantial costs and a diversion of management’s attention and resources.

Company does not expect to pay dividends for some time, which could result in no immediate return on a stock purchase investment.

Hannover House, Inc. has never declared or paid cash dividends on our common stock. We currently intend to retain our earnings, if any, to provide funds for the operation and expansion of our business and, therefore, do not anticipate declaring or paying cash dividends in the foreseeable future. Any payment of future dividends will be at the discretion of the Company’s board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends and other relevant factors of our operations.

Company’s common stock shares are not currently trading “electronically” through the DTCC which can limit an Investor / Shareholder’s placement with brokers (if shares are acquired via “paper certificates”).

As of June 1, 2020 common stock shares of Hannover House, Inc. were approved for electronic clearance and transfer through the Depository Trust Clearing Corporation (DTCC). Shareholders may still request a physical (paper) share certificate if electronic transfer is not preferred.

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ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2. PROPERTY.

The Company owns office furnishings, computers, fixtures and a wide range of motion picture production equipment as are itemized on the Company’s balance sheet. The Company does not own any real estate property, and is sharing offices with Vodwiz, Inc., under a services-barter arrangement.

ITEM 3. LEGAL PROCEEDINGS.

Over the course of operations these past twenty-seven (27) years, from time-to-time the Company has been involved in litigation, most commonly from third-party producers who wish to claim that they are owed more in royalties that the results of their title’s release actually accrued. The total number of lawsuits has been seventeen (17), the majority of which have been resolved in Company’s favor. The Company is not currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. Excepting as specified in the summary below, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect on us. Notwithstanding the above, the Company has summarized all significant legal proceedings or legal judgments below, along with a status on activities regarding the disposition of each. These legal issues are listed alphabetically by the name of the principal adversarial party.

3a). BEDROCK VENTURES v. HANNOVER HOUSE – A California default judgment was entered against the company for approximately $513,098 in 2005, which Bedrock has attempted to enforce through unsuccessful garnishment attempts against some Hannover House customers. Based on Arkansas law, and the meritorious defense that Bedrock was contractually committed to funding the Company for $1.5-mm (which was only partially paid), and the subsequent discovery of fraud by Bedrock involved with the transaction, Company plans to re-open the case for adjudication once the COVID-19 court shut downs are lifted.

3b). DAISY WINTERS v. HANNOVER HOUSE – A California default judgment was entered against Hannover House (amount of award still pending), despite a written agreement to dissolve the venture between the two parties, including Hannover’s full cooperation with the dissolution of rights. Based on Arkansas law and meritorious defenses, Company plans to re-open this case for adjudication in Arkansas once the COVID-19 court shut downs are lifted.

3c). DOGPATCH (Carters A.V.) v. HANNOVER HOUSE – A case has been filed in Arkansas for which Hannover House has meritorious defenses which are likely to prevail upon adjudication. Hannover House has not yet filed its response due to the COVID-19 court house shut down.

3d). GETTING GRACE v. HANNOVER HOUSE – A settlement agreement with this program supplier has been made, but court shut downs have impeded the certification and consummation of this agreement.

3e). HINDS-SHANKMAN v. HANNOVER HOUSE – Company has three causes of meritorious defense which have not yet been pursued due to court house shut downs in California. Although the Plaintiff has filed for a “default.” Counsel and representatives of the court have disclosed that respondents that are impeded from filing a timely response during the court house shut downs will be granted an equal amount of compensatory time to make a response once the courts are reopened.

3f). JSJ v. HANNOVER HOUSE – Company has engaged counsel to move to set-aside the Texas default on the grounds that the notes were fully paid prior to the Plaintiff seeking a judgment.

3g). LEWIN v. HANNOVER HOUSE – This is a foreign (New York) default judgment for which there is no contractual basis whatsoever. Company will seek to have the foreign judgment stayed-from-enforcement at such point in time that the Arkansas courts are re-opened following the COVID-19 shut downs.

3h). ORIGIN RELEASING v. HANNOVER HOUSE – This was a Texas matter that Hannover House defended and ultimately acquiesced and agreed to payment of approx. $250,000 on the basis of a revised accounting of revenues. Subsequent to the agreement to pay this revised sum to Origin Releasing, Hannover House found the original contract which was not “marked-up with hand-written changes” that were the basis for the Origin claim of monies still being due. This significant development provides the basis to re-open the case in Texas, which can be implemented once the COVID-19 court house shut downs are lifted.

3i). SECOND STAR v. HANNOVER HOUSE – Company has not yet filed its response due to the applicable court house being shut-down during the COVID-19 pandemic. Although the Plaintiff has proceeded to file for a “default,” Counsel and representatives of the court have disclosed that respondents that are impeded from filing a timely response during the court house shut downs will be granted an equal amount of compensatory time to make a response once the courts are reopened.

3j). UPTONE (Davis) v. HANNOVER HOUSE – This was a California default judgment for which no service of the summons onto defendants occurred. Accordingly, once the California courts are reopened for business, Hannover House will file to set-aside this judgment and will file the applicable, meritorious responses, including the cross complaint for damages of more than $700,000 resulting from Uptone’s failure to fund the theatrical releasing costs of the movie “Union Bound,” which forced Hannover House to mitigate.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Hannover House, Inc. common stock is quoted on the Over-the-Counter Bulletin Board under the symbol “HHSE.”. The last trade for our common stock prior to the effective date of this filing was at $0.0123 per share on August 14, 2020. The OTC Markets chart summary indicates that the common stock trades at a daily average volume of 627,842 shares, which is a daily trading volume at average prices of approximately $7,722. Accordingly, large dollar volume purchases will have a substantial impact to the price-per-share of Hannover House, Inc. stock, while liquidity is presently limited and a large block of shares for sale could take time to sell. It is management’s belief that the filing of the Form 10 Registration could improve investor / shareholder confidence in the HHSE stock and that this could manifest into both a higher average share price as well as an increase in daily volume.

Holders

As of June 30, 2020, the Company had approximately 205 shareholders of record for its common stock – according to the Company’s stock transfer agent, Standard Registrar and Transfer Co., Inc. An additional pool of shareholders are consolidated under block listings for trade brokers such as E-Trade, Scottrade and TD Ameritrade.

Dividends

Hannover House, Inc. has not declared or paid any dividends on our common stock and the Company intends to retain any future earnings to fund the development and growth of our business. Therefore, we do not anticipate paying dividends on our common stock for the foreseeable future. There are no restrictions on our present ability to pay dividends to stockholders of our common stock, other than those which may be prescribed by Wyoming law.

Equity Compensation Plan and Stock Option Plan Information

The Company, at the current time, has no stock option plan or any equity compensation plans

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

During the period covered by this report (three-month period ending June 30, 2020), the registrant has not issued any securities without registration under the Securities Act of 1933.

Purchases of Equity Securities

During the first and second quarters of the fiscal year to end on December 31, 2020, there were no purchases of the registrant’s common stock by or on behalf of the registrant or any affiliated purchaser.

Transfer Agent

The Company’s transfer agent is Standard Registrar & Transfer Co., Inc., located at 440 E 400 S Suite 200, Salt Lake City, UT 84111

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company still pending full registration, Hannover House, Inc. is not required to include a primary office and warehouse combo unit (under lease from Elder Properties, Springdale, AR), comprising approximately 6,000 square feet.this information in our Annual Report on Form 10-K or in Quarterly Reports on Form 10-Q.

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Item 3 QuantitativeITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

The following discussion of our financial condition and Qualitative Disclosures About Market Risk

Investmentresults of operations should be read in conjunction with our consolidated financial statements and the Company's Stock bears similar risks as may exist withrelated notes and other stocks trading onfinancial information appearing elsewhere in this Annual Report. Readers are also urged to carefully review and consider the OTC Markets board. The trading price for Company's Stock Shares can vary significantly based upon a variety of factors unrelated

various disclosures made by us which attempt 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 muchadvise interested parties of the cash-flow burdens but would resultfactors which affect our business, including without limitation the disclosures made in a dilutionItem 1A of shareholder equity. Accordingly,Part I of this Annual Report under the caption “Risk Factors.”

Results of Operations for the three-month period ended June 30, 2020

The first six months of 2020 were utilized by management has workedprimarily to findcomplete reporting requirements for 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),Company’s forthcoming Form 10 Registration filing, as well as to provide working capital to enable the Company's FilmCompany’s subsequent S1 Registration and Television Rights Library to be more efficiently exploited.

While there are no material threats at present toraising. Additional activities included ongoing supervision of the Company's ongoing viability, there can be no assurance thateditorial process of 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,feature film, “WILDFIRE” as well as significant upside potential. The "Price-Earnings Ratio"on-boarding and mastering work related to the preparation and prelaunch of the consumer streaming site, MyFlix. Revenues for publicly-traded entertainment stocksQ2 were a modest $75,319 of which $69,345 were non-cash journal entries for invoiced services rendered ($54,250), studio royalties ($8,945) and rental-space barter ($6,150).

Cost of Revenue

There were not cost-of-goods incurred during Q1 which impacted the G&A or Income Statement for this period.

Gross & Net Profits

For the applicable reporting period, Company posted a Gross Profit of $75,319 which after interest and operational expenses resulted in the Company's areaa net income of activity results$57,870. Due to tax-loss carry forwards, no provision for income taxes has been included in an average P/E ratethis quarterly assessment of 22-times. The current P/E rationet income

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General and Administrative Expenses

General and administrative expenses for Company's (Hannover House's) is 3.1, based on an annualized projection of the current reporting period.period were $9,848. This extremely low P/E rateG&A expense for the period ending 6-30-2020 is lower than in prior quarters due to the waiver of salary from officers and the cessation of travel, entertainment and releasing costs as a result of the COVID-19 impact to the motion picture and video distribution industries, including Hannover House, shares relativeInc.

Interest expense.

Interest expense was $7,601 for the three-month period ended June 20, compared to $7,502 for the three-month period ended March 31, 2019, which represents a modest and predicted rise in the interest expenses due to compounding balances.

Liquidity & Capital Resources

The company had limited and minimal liquidity during the three-month period ended June 30, 2020, which was not problematic due to a cessation of most costs due to the other publicly traded companies operatingCOVID-19 industry shut downs.

As of the June 30, 2020, Company had cash of $1,028, as compared to $4,849 as of March 30, 2020, representing a decrease of $3,821.

This filing includes a summary of Cash Flows for the Company during the applicable reporting period.

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Critical Accounting Policies and Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the same business sector, suggestsUnited States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the sharesassets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are currently trading at a priceconsistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that is undervalued by a factorwe believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of approximately 6-times when compared to the industry average.our financial statements.

 

Item 4. ControlsOur significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and Procedures -results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities”.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to include this information in our Annual Report on Form 10-K or onto Form 10-Q

ITEM 8. FINANCIAL STATEMENTS

Our consolidated financial statements appear in a separate section of this Annual Report on Form 10-Q beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Control Procedures

The term “disclosureCompany’s 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 (i) that information required to be disclosed by a companythe Company in the reports the Company files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (ii) that information required to be disclosed by the Company in the reports 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 the Company’s management, including our Chief Executive Officerits principal executive officer and Chief Financial Officer,principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

As of September 30, 2015,Our principal executive officer and principal financial officer evaluated the endeffectiveness of the period covered by this report,design and operation of our disclosure controls and procedures as of June 30, 2020, and concluded that the Company carried out an evaluation underdisclosure controls and procedures were not effective as a whole, and that the deficiency involving internal controls constituted a material weakness as discussed below.

(b) Management’s Assessment of Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rules 13a-15(f). A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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Under the supervision and with the participation of our Chief Executive Officermanagement, including the principal executive officer and President ofthe principal financial officer, the Company’s management has evaluated 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 effectiveits internal control over financial reporting as of SeptemberNovember 30, 2015, .

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Item 4T. Controls and Procedures

Changesbased on the criteria established in Internala report entitled “Internal Control over Financial Reporting

As required- Integrated Framework issued by Rule 13a-15(d)the Committee of Sponsoring Organizations of the Exchange Act,Treadway Commission” and the Company, underinterpretive guidance issued by the supervision and with the participation ofCommission in Release No. 34-55929. Based on this evaluation, the Company’s management including the Chief Executive Officerhas evaluated and Chief Financial Officer, also evaluated whether any changes occurred toconcluded that the Company’s internal control over financial reporting was ineffective as of November 30, 2015, and identified the following material weaknesses:

There is a lack of accounting personnel with the requisite knowledge of Generally Accepted Accounting Principles in the United States (“GAAP”) and the financial reporting requirements of the U.S. Securities and Exchange Commission.
There are insufficient written policies and procedures to insure the correct application of accounting and financial reporting with respect to the current requirements of GAAP and SEC disclosure requirements.
There is a lack of segregation of duties, in that the Company had not yet segregated, specified and otherwise assigned those specific duties which were to be separately handled respectively by Parkinson (CEO), Shefte (President) and Blanton (acting CFO) during this applicable period.

Notwithstanding the existence of these material weaknesses in our internal control over financial reporting, our management believes that the financial statements included in its reports fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented.

The Company will continue its assessment on a quarterly basis and the Company plans to hire personnel and resources to address these material weaknesses when it is financially able to do so. We believe these issues can be solved by hiring in-house accounting support and plan to do so as soon as we have funds available for this.

This quarterly report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. The Company’s registered public accounting firm was not required to issue an attestation on its internal controls over financial reporting pursuant to temporary rules of the SEC. The Company will continue to evaluate the effectiveness of internal controls and procedures on an on-going basis.

(c) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the period covered by this reportour most recently completed fiscal quarter 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.our internal control over financial reporting.

 

PART II -ITEM 9B. OTHER INFORMATION

 

None.

14

PART III

Item 1. Legal Proceedings.ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACTAs

Directors and Executive Officers

The following table and text sets forth the names and ages of Septemberall our directors and executive officers and our key management personnel as of June 30, 2015,2020. All of our directors serve until the Companynext annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the board of directors, and are elected or appointed to serve until the next board of directors meeting following the annual meeting of stockholders. Also provided is a brief description of the business experience of each director and executive officer and the key management personnel and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws.

NameAgeTitleDate of Appointment
Eric F. Parkinson61Director, Chief Executive Officer, and Corporate SecretaryJanuary 24, 2002
Don Frederick Shefte73Director, President & TreasurerJune 1, 2007
Randall Blanton69Interim / Acting CFOFebruary 1, 2020

We do not have a standing audit committee or an audit committee financial expert. We do not have an audit committee financial expert because of the small size of our company and our board of directors at this time, and also because the cost related to retaining a financial expert at this time would be prohibitive.

Eric Parkinson - Director, Chief Executive Officer and Secretary

Eric Parkinson is a film distribution and marketing veteran whose stellar career extends back to his very first # 1 best-selling video, “The 1984 Summer Olympic Highlights” – a production co-venture with ABC Sports. Parkinson has since released over 1,200 titles to the North American home video market, and earned 117 Gold or Platinum Certified hits (titles ranging from “Terminator”, “Platoon”, “The Last Emperor” and “Hoosiers” to less obvious top hits such as “Savage Land”, “Highlander 2”, “The Magic Voyage” and “Little Nemo: Adventures in Slumberland.” Parkinson was a key executive involved with the sale of the Hemdale library into MGM in 1996, which stood for many years as the record top price for a film library sale. Parkinson is also experienced as a producer and executive producer, with credits on more than fifty titles, and his first feature film directoral debut now underway with “Wildfire (2020).”

Don Frederick Shefte – Director, President and Treasurer

Shefte was a JAG officer in the followingNavy before becoming a partner in the prestigious San Diego law firm of Seltzer Caplan. He relocated to N.W. Arkansas in 2001 as a Walmart vendor, and later joined the Bank of Fayetteville as its Senior Trust Officer. At the Bank of Fayetteville, one of Shefte’s principal duties was the collection and distribution of approximately five-million dollars per year from retail and wholesale purchasers of products from the bank’s client, Hannover House. Shefte joined Hannover House in 2007 and has since expanded his legal matters for which ongoing court activitiesand financial expertise to include credits on several feature film productions.

Randall Blanton – Interim / filingsActing Chief Financial Officer

Randy Blanton has over 30-years of experience as a CPA and at the Controller or adjudicated status were still pending:CFO level at multiple major banks throughout the State of Arkansas. Blanton has also been involved with the audit-committees of banks (both in respect of auditing internal operations as well as auditing clients and prospective bank customers).

 

1). TCA GLOBAL MASTER FUND – The previously disclosed balance dueTerm of Office

Our directors are appointed for a one-year term to TCA Globalhold office until the next annual general meeting of our shareholders or until removed from Company, wasoffice in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the subjectboard of a Florida Courts judgement issued during Q3, 2015. The Company noted thatdirectors.

There are no agreements or understandings for any director or officer to resign at the court filings from the attorneys for TCA contained several demonstrably erroneous statements, including the wrong balances due to TCA,request of another person 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 benefitsnone of the releasedirectors or officers is acting on behalf of or will act at the direction of any other person. The activities of each director and officer are material to the operation of the UCC Security Interest andCompany. No other person’s activities are material to the returnoperation 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.Company.

 

2). STANDARD REGISTRARCode of Ethics

The Company has engaged George B. Morton, Esq.,adopted a Code of Ethics applicable to pursueits directors and officers (including its principal executive officer and principal financial officer).

15

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and any beneficial owner of more than 10% of any class of the Company’s equity securities to file reports of ownership and changes in ownership with the SEC and furnish copies of the reports to the Company. Based solely on the Company’s review of copies of such forms and written representations by the Company’s directors and executive officers received by it. As of June 30, 2020, none of the officers effected any changes in their share ownerships that would require such a notification.

ITEM 11. EXECUTIVE COMPENSATION.

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the three-month period ending March 31, 2020.

Executive Compensation

  Current     Stock  Option  All Other    
Name and Principal Position Salary  Bonus  Awards  Awards  Compensation  Total 
Eric F. Parkinson, C.E.O. $       0  $      0  $      0  $       0  $              0  $      0 
                         
D. Frederick Shefte, President $0  $0  $0  $0  $0  $0 

Option Grants

There were no individual grants of stock options to purchase our common stock made or outstanding to the executive officers named in the Summary Compensation Table for the three-month period ending 3-31-2020.

Long-Term Incentive Plan Awards

The Company does not currently have a long-term incentive plan.

Compensation of Directors

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Company’s board of directors has the authority to fix the compensation of directors. No amounts were paid to, or accrued to, directors in such capacity for the three-month period ending 6-30-2020.

Employment Agreements

Currently, we do not have an action to collect back from Standard Registrar an issuanceemployment agreement in place with any of approximately 9.8-mm shares that were released by Standard to Blackbridge Capital in mid-September without legal basis or authorization. our executive officers.

Committees

As the Company’s Board of Directors currently consists of two persons, the Company’s board of directors does not currently have any committees. During the most recently completed fiscal year and reporting quarter, Eric Parkinson and Fred Shefte made all decisions concerning executive officer compensation.

16

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The valuefollowing table presents information concerning the beneficial ownership 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 fileour common stock as of June 30, 2020 by: (i) each of our named executive officers and current directors, (ii) all of our current executive officers and directors as a civil court action in Arkansas.group and (iii) each person we know to be the beneficial owner of 5% of more of our outstanding shares of common stock.

 

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.Executive Stock Ownership

 

Name and Principal Position 

Common

Stock Shares

  

Percentage

of A/S

  

Preferred

Stock Shares

  

Percentage

Of Class

 
Eric F. Parkinson, C.E.O.  43,141,649   5.31%  2,400,000   60%
                 
D. Frederick Shefte, President  31,487,546   3.88%  1,600,000   40%

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.

 

(1)The number of outstanding shares of commons stock of the Company for the purpose of calculating the above percentages is: 811,529,996.
(2)For reporting purposes, both Parkinson and Shefte have listed the following address: 355 N. College Ave. Suite 4, Fayetteville, AR 72701.
(3)Parkinson has the option to reclaim or otherwise cause to be reissued up to 31,200,000 shares of common stock that were voluntarily surrendered back into treasury stock over the past ten (10) years, which reissuance is subject to applicable regulatory restrictions.

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 terminationno outstanding equity awards at fiscal year-end.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Transactions with Related Persons

As of the license due to sluggish sales for the book. Accordingly,June 30, 2020, 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,had received loans from officers Eric Parkinson (CEO) and D. Frederick Shefte, (President). for which unpaid balances still existed. The balance owed to Parkinson as of 6-30-2020 is $83,312, of which approximately $14,850 was paid during the past calendar year. The balance owed to Shefte as of 6-30-2020 is $32,358, all of which was received by the Company more than four years ago. Unless otherwise specified, these officer loans are unsecured, bear no interest, and are due on demand.

Director Independence

On an annual basis, each director and executive officer will be obligated to disclose any transactions with our Company and any of its subsidiaries in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest. Following completion of these disclosures, our board of directors will make an annual determination as to the independence of each director using the current standards for “independence” that satisfy the criteria for The NASDAQ Stock Market.

As an accommodationof June 30, 2020, none of our directors qualified as independent in accordance with Nasdaq Marketplace Rule 5605(a)(2).

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

Audit Fees consist of assurance and related services that are reasonably related to benefit the Company's cash flow, both Parkinsonperformance of the audit or review of our financial statements. This category includes fees related to the performance of audits and Shefte have been deferring a majority of their salaries. Additionally, as has beenattest services not required by many third-party program suppliers, Parkinson has often been listed as a "key man"statute or regulations, and accounts consultations regarding the application of GAAP to proposed transactions. The aggregate Audit Fees billed for the fiscal years ended December 31, 2019 and the current reporting quarter of 6-30-2020 are not included in this filing, but are specified separately in the Company’s Form 10 registration disclosures.

Audit Related Fees

The aggregate fees billed for assurance and related services by our principal accountant that are reasonably related to the rights licensesperformance of the audit or sales venture agreementsreview of our financial statements, other than those previously reported in this Item 14, for specific acquisitions, duethe current reporting period were $0.

Tax Fees

Tax Fees consist of the aggregate fees billed for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning. These services include preparation for federal and state income tax returns. The aggregate Tax Fees billed for the fiscal years ended December 31, 2019, were $800.

Audit Committee Pre-Approval Policies and Procedures

Effective May 6, 2003, the SEC adopted rules that require that before our auditor is engaged by us to his successful home video sales track record. Additionally,render any auditing or permitted non-audit related service, the engagement be:

approved by our audit committee; or
entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management.

We do not have an audit committee. Our board 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 employmentdirectors pre-approves all services provided 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.our independent auditors.

 

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

 

Not applicable to Issuer.ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

Item 3. Defaults Upon Senior Securities(a) Financial Statements

 

Not applicable to Issuer, although a previously active credit arrangement with TCA Global Master Fund has since been terminated by mutual consent.1. The following financial statements of are included in this Quarterly Report on Form 10-Q;

 

Item 4. SubmissionStatements of Matters to a Vote of Security Holders.Operations - for the three-month period ended June 30, 2020;

 

Not applicable to Issuer.Statements of Cash Flows - for the three-month period ended June 30, 2020;

 

Item 5. Other Information.Statements of Stockholders’ Equity - for the three-month period ended June 20, 2020;

 

Additional InformationNotes to Financial Statements. Additionally, in compliance with specific disclosures required by the OTC Markets, that is not (necessarily) required under S.E.C. reporting guidelines:

 Page 18

(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:exhibits describing these additional items are attached hereto.

  

Exhibita)Eric Filson Parkinson, Chief Executive Officer and member of the board; business address for Mr. Parkinson is: 1428 Chester St., Springdale, AR 72764. At all times during the prior five years, Mr. Parkinson has been employed as the C.E.O. of Truman Press, Inc., d/b/a “Hannover House.” During 2014, Mr. Parkinson had been earning an accrued salary of ninety-thousand dollars (USD $90,000) per year, for which the vast majority has been, and continues to be deferred and accrued. The salary that Parkinson is accruing during calendar year 2015 has been adjusted back to its previous level of one-hundred-eighty-thousand dollars (USD $180,000) per year. As of December 31, 2014 and continuing to this date, Mr. Parkinson beneficially owned 43,141,649 shares of Class A common stock in the Company, and 1,800,000 shares of Series A Preferred Stock. Mr. Parkinson has voluntarily surrendered back into company treasury a total of 31,800,000 shares of stock, to be held pending satisfaction of corporate and sales achievements, and subsequently delayed for review until January, 2016. Parkinson has no other Board memberships or affiliations other than volunteer, non-profit associations.Description

31.1b)Don Frederick Shefte, President and member of the board; business address for Mr. Shefte is: 3741 N. Old Wire Road, Fayetteville, AR 72703. At all times since November, 2006, Mr. Shefte has been employed as the President of Truman Press, Inc., d/b/a “Hannover House” as well as a part-time, adjunct professor of Business at the Sam Walton School of Business at the University of Arkansas. Prior to joining Truman Press, Inc. (in November, 2006), Shefte was the Senior Vice President and Senior Trust Officer at the Bank of Fayetteville. During 2014, Mr. Shefte has an accrued salary of ninety-thousand dollars (USD $90,000) per year, for which the vast majority has been, and continues to be deferred and accrued. The salary that Shefte is accruing during calendar year 2015 has been adjusted back to its previous level of one-hundred-eighty-thousand dollars (USD $180,000) per year. As of December 31, 2014 and continuing to this date, Mr. Shefte beneficially owns 31,487,546 shares of Class A common stock in the Company, and 1,200,000 shares of Series A Preferred Stock. Shefte has no other Board memberships of affiliations other than volunteer, nonprofit associations. Shefte has voluntarily surrendered back into company treasury total of 5million shares of stock, to be held pending satisfaction of corporate governance achievements.CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

31.2c)Tom Sims, currently employed as Vice President of Sales for Hannover House, Inc., and Executive Vice President of Medallion Releasing, Inc., has agreed to join the Board of Directors for Hannover House, Inc., effective upon the Company’s full registration and acceptance as a fully-reporting Issuer with the Securities and Exchange Commission and the effective date upon which Sims is added as an additionally named, covered party of the Officers and Director’s Liability Insurance. As of June 30, 2015, Sims received a first-year bonus of one-million (1,000,000) shares of Common Stock. Under the terms of his employment as Vice President of Sales, Sims is also entitled to receive an additional one-million (1,000,000) shares for each $10-million in gross revenue generated by the Company in any given calendar year under his sales management.CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
101.INSXBRL Instance Document
101.SCHXBRL Schema Document
101.CALXBRL Calculation Linkbase Document
101.DEFXBRL Definition Linkbase Document
101.LABXBRL Label Linkbase Document
101.PREXBRL Presentation Linkbase Document

 

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 bya 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.

Page 19

18

 

C.                Disclosure of Family RelationshipsSIGNATURES – 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 14Beneficial 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.

Page 20

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.

Page 21

SIGNATURES

Pursuant to the requirementsrequirement of Section 13 or 15(d) 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.

 

 Date: November 15, 2015Hannover House, Inc.
Date: August 19, 2020By:/s/ Eric F. Parkinson
 By: /s/ Eric F. Parkinson
 Eric F. Parkinson,
Chairman &
Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Page 22

 CERTIFICATION

I, Eric F. Parkinson certify that:

1.I have reviewed this quarterly report on Form 10-Q of Hannover House, Inc.;

 

2.Signature Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in lightTitleDate
/s/ Eric F. ParkinsonChairman of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Board, Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;August 19, 2020

4.ERIC F. PARKINSON The registrant’s other certifying officer

Chief Executive Officer and I are responsible for establishingSecretary

(Principal Executive Officer and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Principal Financial Officer)

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 Date:  November 15, 2015Hannover House, Inc
By: /s/ Eric F. Parkinson
Eric F. Parkinson
Chairman Chief Executive Officer

 

19

HANNOVER HOUSE, INC. AND AFFILIATES AND SUBSIDIARIES

Financial Statements

June 30, 2020 (UNAUDITED)

TABLE OF CONTENTS

 Page
Consolidated Balance Sheets as of June 30, 2020F-2
Consolidated Statements of Income for the three-month period ending June 30, 2020F-4
Consolidated Statements of Cash Flows for the three months ended June 30, 2020F-5
Consolidated Statements of Equity for the three-months ended June 30, 2020F-6
General and Administrative Costs for the three-months ending June 30, 2020F-7
Notes to the Consolidated Financial StatementsF-8

F-1

EXHIBITS

EXAMPLE “KEY ART” POSTER IMAGES FOR

CURRENT & UPCOMING HANNOVER HOUSE, THEATRICAL RELEASESINC., AND AFFILIATES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020

  3/31/2020    6/30/2020 
ASSETS          
CURRENT ASSETS          
Cash & Cash Equivalents  4,849     1,028 
Accounts Receivable, Net  324,652  (1)  336,903 
Prepaid Wages  -     - 
Merchandise Inventory  100,704     100,704 
Prepaid Advertising  765,000     765,000 
Prepaid Producer Royalties  2,454,674     2,454,674 
Producer Marketing Recoupment  3,016,762     3,016,762 
Film Distribution Rights  1,996,379     1,996,379 
Film Production Investments  469,389     469,389 
Notes Receivable and Net Recoupment  41,641  (2)  41,641 
           
TOTAL CURRENT ASSETS  9,174,050     9,182,480 
           
PROPERTY & EQUIPMENT          
Office Furnishings, Equip. & Film Gear  154,725     154,725 
Less Accumulated Depreciation  (37,164)    (37,164)
Vehicles  -     - 
Less Accumulated Depreciation  -     - 
Real Property  -     - 
TOTAL PROPERTY & EQUIPMENT  117,561     117,561 
           
OTHER ASSETS          
FILM & TV LIBRARY (incl. VODWIZ)*  27,413,517     27,413,517 
           
TOTAL OTHER ASSETS  27,413,517     27,413,517 
           
   36,705,128     36,713,558 

F-2

ITEM F 1 – (continued)

  3/31/2020    6/30/2020 
LIABILITIES & SHAREHOLDER’S EQUITY          
CURRENT LIABILITIES          
Accounts payable  9,115     19,365 
Accrued Royalties  94,065     94,065 
Acquisition Advances Due  285,399     285,399 
Accrued Wages  122,182     122,182 
Payroll Taxes Payable  -     - 
Deferred Income Tax Payable  -     - 
NB Cal AFIL P&A Loan  -     - 
Hounddog P&A Note (EFG)  -     - 
Interest on Hounddog Note  -     - 
Shuttlewood Investments  -  (3)  - 
Interest on Shuttlewood Note  -     - 
Graham Financial Services Note  98,825     98,825 
Interest on Graham Note  2,051     2,051 
All Other Notes Payable  576,685     576,685 
Interest on Above Notes Payable  51,201     51,201 
Bank of Fayetteville Note  15,000     15,000 
Interest on B.O.F. Note  -     - 
           
TOTAL CURRENT LIABILITIES  1,254,523     1,264,773 
           
LONG-TERM LIABILITIES          
Long-Term Payables  1,033,382     1,033,382 
Executive Salary Deferrals  766,415     766,415 
Lewin Foreign Judgment  1,629,442  (4)  1,629,442 
Contingent Legal Liabilities  727,022  (5)  727,022 
Officer Notes Payable  115,670     115,670 
           
TOTAL LONG-TERM LIABILITIES  4,271,931     4,271,931 
           
TOTAL OF ALL LIABILITIES  5,526,454     5,536,704 
           
SHAREHOLDER’S EQUITY          
Common Stock  27,272,077     27,212,387 
Retained Earnings  3,906,597     3,964,467 
           
TOTAL SHAREHOLDER’S EQUITY  31,178,674     31,176,854 
           
   36,705,128     36,713,558 

F-3

CONSOLIDATED STATEMENT OF INCOME

FOR THE 3-MONTHS ENDING 6-30-2020

  Q1  Q2 
  2020  2020 
REVENUES (all media, fees & licenses) $90,541  $75,319 
Net, Collected Revenues  3,769   14,919 
Additional Invoiced Sales  86,772   - 
Reserve for Potential Returns  -   - 
ADJUSTED REVENUES FOR PERIOD  90,541   - 
       75,319 
COST OF SALES        
Commissions  -   - 
Sales and Marketing  -   - 
Video Mfg & Releasing Costs  -   - 
Film & Book Royalties  -   - 
Freight  -   - 
Other Expenses (Ads, PR, Publicity)  -   - 
         
TOTAL COST OF SALES  -   - 
         
GROSS PROFIT  90,541   75,319 
         
GENERAL AND ADMINISTRATIVE EXP.  40,642   9,848 
         
INCOME FROM OPERATIONS  49,899   65,471 
         
INTEREST EXPENSES  7,502   7,601 
         
OTHER EXPENSES (SALARY DEFERRALS)  -   - 
         
INCOME BEFORE TAXES  42,397   57,870 
         
PROVISION FOR INCOME TAXES  -   - 
         
NET INCOME $42,397  $57,870 
         
RETAINED EARNINGS (Beginning of Period)  3,864,200   3,906,597 
         
RETAINED EARNINGS (End of Period)  3,906,597   3,964,467 

F-4

STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDING 6-30-2020

 

 Page 24Hannover House, Inc.

Consolidated Statement of Cash Flow

For the Three-Month Period Ending June 30, 2020

  6/30/2020 
Cash flows from operating activities    
     
Net Income $57,870 
Increase in Accounts Receivable  12,251 
Decrease in Prepaid Expenses  - 
Decrease in Other Current Assets  - 
Increase in Notes Payable  - 
Increase in Accounts Payable  10,250 
     
Cash Provided By / Used in Operating Activites $80,371 
     
Cash Flow from Investing Activities $- 
Cash Provided By / Used in Investing Activities  (84,192)
     
Cash Flow from Financing Activities $  
Cash Provided by Financing Activities $- 
     
NET INCREASE IN CASH $(3,821)
     
BEGINNING CASH BALANCE $4,849 
     
ENDING CASH BALANCE (12-31-2019) $1,028 
     

F-5

STATEMENT OF SHAREHOLDERS EQUITY

FOR THE THREE-MONTH PERIOD ENDING 6-30-2020

  Common Stock  Retained    
  Shares  Amount  Earnings  Total 
Balance at Mar. 31, 2020  811,029,996  $27,272,077  $3,906,597   31,178,674 
                 
Net Adjustments to Equity  -          $- 
                 
Net Adjustments to Retained Earnings         $-  $- 
                 
Net Income         $57,870  $57,870 
                 
Balances at June 30, 2020  811,029,996   26,518,209   3,964,467   31,236,544 

F-6

GENERAL AND AMINISTRATIVE EXPENSES

FOR THE THREE-MONTH PERIOD ENDING 6-30-2020

  3-Months 
  Ending 
CATEGORY 6/30/2020 
Auto $- 
Bank Charges $105 
Consulting $- 
Employees and Officers $- 
Entertainment $- 
Equipment $- 
Fees $- 
Insurance $- 
Labor $- 
Legal and Accounting $2,500 
Misc / Marketing & Promotions $- 
Office $435 
Rent $6,150 
Payroll Taxes $- 
Telephone $658 
Travel $- 
Utilities    
TOTAL OF GENERAL AND ADMINISTRATIVE EXPENSES $9,848 

F-7

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIOD ENDING 6-30-2020

The following notes refer to those items marked on Item F1 (consolidated balance sheets) as indicated with red note reference markers.

Additional Footnotes to Balance Sheet

(for the three-months ending June 30, 2020)

(1)Accounts Receivable has been adjusted to include mark-downs for DVD price reductions, as well as other reconciliation activities relating to the application of credits for returns and other payment credits.

(2)Notes Receivable includes a loan made by the company to Snowy Morning, Inc. in the amount of $41,641 to assist with production costs for the film “WILDFIRE,” which loan is to be considered as a fully-recoupable advance against Snowy Morning’s share of theatrical revenues in the film. Company holds a lien against other revenue sources, in the event that the producer’s share of net theatrical revenues from “WILDFIRE” is not sufficient to fully repay the loan.

(3)Company is line-item listing the $0 balance due under the Mutual dissolution agreement (to discontinue distribution of the film “Daisy Winters”); however, Company has added in a line-item for “Contingent Legal Liabilities” (see footnote 9), in the event that Company’s upcoming court proceedings in Arkansas in this dispute do not result in a favorable outcome consistent with the Mutual dissolution agreement.

(4)Company has engaged counsel to move to set-aside this foreign judgment and locally filed writ, on the basis of fraud, personal jurisdiction and subject matter jurisdiction. The absence of an agreement between Company and Lewin, as well as the additional prohibition on HHSE officers from issuing “personal guarantees” as represented by Plaintiff Lewin, will support the motion for dismissal. These legal responses from Hannover House are temporarily on hold until the local courthouse reopens from COVID-19 closures.

(5)Upon advice of counsel, Company is also reserving an additional amount of $727,722 regarding three foreign cases, as the potential liability that could occur should the Company not prevail in actions for dismissal or adjudication in Arkansas.

F-8