Hannover House Inc (HHSE)

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HHSE $24,300,000 Film Library Valuation Report






FINANCIAL REPORT COVERING THE HANNOVER HOUSE FILM LIBRARY VALUATION

March 18, 2011




ITEM III Film Library Valuation Report

As previously approved by the Board of Directors of Target Development Group, Inc., Szwak Consulting Group was engaged to review and report on the Valuation of the Hannover House film, television, international, books and video library properties. The opinion and cover letter and Methodologies addendum from Szwak Consulting Group is included with this disclosure filing.


ITEM IV Certifications

I, ERIC F. PARKINSON, hereby certify that;

(1) I have reviewed the Film Library Valuation report from Szwak Consulting Group, covering the Hannover House properties;

(2) Based on my knowledge, this Disclosure Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Disclosure Statement;

(3) Based on my knowledge, the financial information included or incorporated by reference in this Disclosure Statement, fairly present in all material respects the financial condition, results of operations, and cash flows of the Issuer as of, and for, the periods presented in this Disclosure Statement.

Dated: 18 March 2011

By: Eric F. Parkinson
Title: Chairman and Chief Executive Officer



SCG SZWAK CONSULTING GROUP 358 Walter Avenue, Newbury Park, CA 91320

March 18, 2011

Film Library Valuation Opinion

On behalf of Target Development Group, Inc., Szwak Consulting Group has reviewed the title listings, reports and forecasts comprising the Film Library owned or controlled by Truman Press, Inc. d/b/a “Hannover House”and have determined the reasonable value of this Film Library utilizing the Income Approach (as more specifically described in the attached Methodologies Addendum “A”), and by following valuation guidelines as established within the motion picture and filmed entertainment industry. Truman Press, Inc, d/b/a “Hannover House” is wholly-owned by Target Development Group, Inc.

Based upon the management supplied sales histories for each catalog item, we have verified the five year sales forecasts as reflecting reasonable decay rates, and have validated management projections for the new media formats of Blu-ray Video and Video-On-Demand as falling within the revenue ranges for comparable level titles. For new or unreleased titles in the Film Library, verification that said forecasts are reasonable and obtainable has been determined through a comparison of results now being generated by similar-stature titles being released with a comparable level of marketing support.

We concur with management’s sales forecasts of gross and net revenues likely to be derived from the titles detailed on Addendum “B” and confirm that the reasonable valuation of the Hannover House / Target Development Group, Inc. film library is $24,276,709.

This Film Library Valuation Opinion refers to the detailed title listings and five-year forecasts as itemized in the attached Addendum “B” reflecting titles owned or controlled by Truman Press, Inc., d/b/a “Hannover House” as of 12-31-2010. Titles acquired since that date, or not yet delivered to the company were excluded from this report. In determining our Film Library Valuation Opinion, Szwak Consulting Group has relied upon management representations, including sales histories, new release marketing plans and corporate strategies for entering new media markets such as Blu-ray and Video-On-Demand, as well as current and upcoming activities to exploit applicable rights from the Television and International markets.

Sincerely,

Tom Szwak
Managing Director

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