7). Is the Company still pursuing "higher-profile

7). Is the Company still pursuing "higher-profile" titles, or is the business model now strictly indie films for the direct-to-video / VOD market?

A: The "meat-and-potatoes" business model for the Company at present is to acquire and release easily placed films for DVD and VOD, while pursuing "tent-pole" / event-level releases to drive the visibility and revenues for each year. The direct-to-video titles are highly profitable with great return-on-investment (i.e., an average upfront cost of $10,000 plus replication & freight can predictably return $150,000 to $250,000 in gross sales per title). However, there is a revenue-limit to this model in that the Company's key accounts usually cannot absorb more than two (possibly three) new titles from an indie studio like Hannover House per month. So for the Company to break a respectable revenue goal of $50-million per year, one or more titles like "Mother Goose" would be required to generate these front-line / mainstream results