e). LEVERAGING OF KEY RETAIL RELATIONSHIPS -- The Company is looking at the possibility of acting as a distribution or "retail sales agency" for representation of entertainment related and other retail -friendly items into the Company's key USA retail accounts. This strategy of a sales-agency representation structure has worked tremendously well for Gaiam, Inc. (GAIA) in helping them rapidly build annual gross revenues to over $200-mm. Hannover House has been presented with some items from other manufacturers - such as videogame software, sporting-goods related merchandise and nutritional supplements. Some of these items very appear likely to be considered or placed with accounts such as Wal-Mart, SAMS, Costco, Best Buy , Walgreens and other existing retail accounts for Hannover House home video products. Structurally, under such a scenario, the suppliers would be responsible for all costs, with HHSE earning an off-the-top sales placement fee. We do not see any downside risk, and as this topic is on the table, we wanted to let our shareholders know it's being analyzed and considered.
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