The revenue models contained in this document are based on certain assumptions of fact, and are presented for illustrative purposes only and do not represent a forecast of the anticipated results of the Company’s operations. Potential investors must recognize that the projections are only estimates, are not guaranteed, and should not be relied upon by any investor in connection with the Company.   

7.1      Financing Plan  

The Company proposes to secure all production financing from equity partners by means of a limited partnership investment. With production funding in place from independent investors, the Company can negotiate the most advantageous distribution deal. Management can choose to wait until principal photography has commenced before talking with distributors so that they will be able to view the professional quality of the film. This strategy will allow the maximum flexibility in a rapidly changing marketplace where the availability of product is in constant flux. Many factors affect the financial projections for a film. Its commercial appeal is the most important factor in determining financial success, followed closely by the agreement with the distributor. Being able to self-finance the production of a film puts the Company in the strongest position to control the quality and costs of the film, along with striking the best financial arrangements with the various distribution channels.  

7.2      Return on Investment (ROI) 

The Company is confident that it will create a motion picture which audiences will enjoy, thereby reaping the financial rewards from that success. The Company cannot guarantee that the film will be profitable, or that it will even earn back its budget, but will stand behind its commitment to ensure that the most reasonable distribution deal possible will be sought and executed.  The Company proposes to pay back the limited partners who invest in the Film in the following manner:  

(a) From the Producer’s Gross Income, the Company will cover distribution expenses, any and all outstanding production expenses not covered by the production budget, such as deferred pay of talent salaries and other such costs.  

(b) After deducting any deferred fees or outstanding expenses, the Producer’s Net Income will go directly to the financier. All funds are paid directly to the financier until full recoupment of investment with interest is complete. Accounting statements from distribution companies are usually handled on a quarterly basis for the first two years of the distribution agreement, and semi-annually thereafter for a period of two years. Accounting statements are then handled on an individual basis. Generally, the distribution company is responsible for providing statements and paying any sums due to the production company within sixty days of the end of each quarter. The Company will provide the limited partners with accounting statements and payments due and owing, if any, within sixty days of the receipt of those statements and money from the distributor.

  (c) After each limited partner has recouped his/her initial investment plus 20%, any additional money earned will be divided between the producers and the limited partners on a 40/60 basis.