######### Pro Forma Financials INCOME $27,800 Gross Sales (Explanation below) (Commissions) $0 (Returns and allowances) $0 Net

Sales $27,800 (Cost of Goods) $1,920 GROSS MARGIN $25,880 $31,300 $0 $0 $31,300 $1,920 $29,380 $31,300 $0 $0 $31,300 $1,920 $29,380 $27,800 $0 $0 $27,800 $1,920 $25,880 $36,000 $0 $0 $36,000 $3,840 $32,160 $36,000 $0 $0 $36,000 $3,840 $32,160 $36,000 $0 $0 $36,000 $3,840 $32,160 $36,000 $0 $0 $36,000 $3,840 $32,160 $36,000 $0 $0 $36,000 $3,840 $32,160 $18,000 $0 $0 $18,000 $1,920 $16,080 $18,000 $0 $0 $18,000 $1,920 $16,080 $36,000 $370,200 $0 $0 $0 $0 $36,000 $370,200 $0 $30,720 $36,000 $339,480 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL 2013 13-'14 2014 2014 14-'15 2015 2015 Vertical Horizontal Vertical Horizontal Vertical Analysis Analysis Analysis Analysis Analysis 100% 25% $462,750 100% 35% $624,712.5 $0 $0 0% 0% $0 $0 0% 0% 0% 100% 25% $462,750 100% 35% $624,713 100% 8% 10% $33,792 7% 10% $37,171 6% 92% 26% $428,958 93% 37% $587,541 94% 0% 0% 0% 0% 0% 0% 0% 0% 0% $0 $0 0% 0% 0% $0 $0 0% 0% 0% $0 $0 0% 0% 0% $0 $0 10% 10% 9% 25% 8% $41,800 $52,250 1% 0% 1% 0% 1% $3,600 $3,600 0% 0% 0% $0 $0 1% 10% 1% 10% 0% $2,640 $2,904 0% 0% 0% $0 $0 1% 0% 1% 0% 1% $4,800 $4,800 0% 0% 0% 0% 0% $1,800 $1,800 0% 10% 0% 10% 0% $396 $435.60 0% 10% 0% 10% 0% $1,320 $1,452 0% 0% 0% 0% 0% $840 $840 11% 10% 10% 10% 8% $45,760 $50,336 3% 10% 3% 10% 2% $11,770 $12,947 3% 10% 2% 10% 2% $10,560 $11,616 1% 10% 1% 10% 1% $5,720 $6,292 0% 13% 33% 13% $60,000 $80,000 32% 59% $191,006 41% 20% 37% $229,273 59% 8% $237,952 51% 51% 57% $358,269 0% 0% 0% 0% 0% $588 $588 59% 8% $237,364 51% 51% 57% $357,681 51% 57%

EXPENSES - General and Administrative Salaries and wages $0 $0 Employee benefits $0 $0 Payroll taxes $0 $0 Professional services $0 $0 Marketing and advertising $3,000 $3,000 Rent $300 $300 Equipment rental * $0 $0 Maintenance $200 $200 Depreciation ** $0 $0 Insurance $400 $400 Telephone service $150 $150 Utilities $30 $30 Office supplies $100 $100 Postage and shipping $70 $70 Travel $6,400 $9,200 Entertainment $1,000 $2,000 Theatre Rentals (Jan-Apr.) $1,600 $3,200 Festival Vending (May-Sept.) $0 $0 Movie & Soundtrack Budgets (2014-15) $0 $0 TOTAL EXPENSES $13,250 $18,650 Income before interest and taxes $12,630 $10,730 Interest Expense $49 $49 NET PROFIT $12,581 $10,681 Calculate the Cumulative Net Profit ----> to determine when break even will occur Break Even Calculate two total ratios: One Ratio from the textbook One custom ratio that measures a unique area of your company's performance

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $9,200 $2,000 $3,200 $0 $0 $18,650 $10,730 $49 $10,681

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $6,400 $1,000 $1,600 $0 $0 $13,250 $12,630 $49 $12,581

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $1,600 $500 $0 $800 $0 $7,150 $25,010 $49 $24,961

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $1,600 $500 $0 $800 $0 $7,150 $25,010 $49 $24,961

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $1,600 $500 $0 $800 $0 $7,150 $25,010 $49 $24,961

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $1,600 $500 $0 $800 $0 $7,150 $25,010 $49 $24,961

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $1,600 $500 $0 $800 $0 $7,150 $25,010 $49 $24,961

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $800 $200 $0 $0 $0 $5,250 $10,830 $49 $10,781

$0 $0 $0 $0 $3,000 $300 $0 $200 $0 $400 $150 $30 $100 $70 $800 $1,000 $0 $0 $0 $6,050 $10,030 $49 $9,981

$0 $0 $0 $0 $0 $0 $0 $0 $5,000 $38,000 $300 $3,600 $0 $0 $200 $2,400 $0 $0 $400 $4,800 $150 $1,800 $30 $360 $100 $1,200 $70 $840 $800 $41,600 $1,000 $10,700 $0 $9,600 $1,200 $5,200 $0 $0 $9,250 $120,100 $26,750 $219,380 $49 $589 $26,701 $218,791 59%

$13,344.44

########

$25,474.73

Ratio 1: Gross Profit Margin =.91

Custom Ratio: Cost of Goods/Marketing =.81

0.92

0.81

EXPLANATION OF SALES:

January 2013-April 2013- Sales Figures are based on 100 physical DVD and CD sales per week for each of the five (5) products we will offer for sale, and 100 digital downloads for the two (2) music CDs that we will offer. We will also be premiering the film in the top ten cities in our target market (African Americans between the ages of 2545), two (2) cities in Jan. 2013, three (3)cities in Feb. 2013, three (3) cities in March, and (2) cities in April 2013-minium seating capacity of 350. Sales were calculated as follows: 1600 (Dvds & Soundtrack) *$10=$16000. 400 (music CDs) * $5= $2000. $16000 + 2000= $18000. 400 digital downloads (400 downloads * $.70 profit per download) = $2800. Two theater sell-out (350 seat capacity) 350 * $10= $3500. $3500* 2 (Theatre Location)=$7000. Total Sales for January and April 2013= $27800. Sales for February and March are $31,300 because we will May 2013-September 2013- Sales Figures are based 200 physical DVD and CD sales per week for each of the five products we will offer for sale, and 100 digital downloads for the two (2) music CDs that we will offer. The increase in sales is due to Arts & Film Festival vending every weekend throughout those months. (800 Dvds * $10)* 4 (different products)= $32000. (800 CDs *$5) = $4000. Total Montly Sales=$36000.

October 2013-November 2013Sales Figures are based on 100 physical DVD and CD sales per week for each of the five products we will offer for sale, and 100 digital downloads for the two (2) music CDs that we will offer. 1600 (Dvds and Cds) *$10= $16,000. 400 (Cds) * $5= $2000. Total Monthly Sales= $18,000. We will not be traveling out of the Atlanta area, and will be preparing for vending opportunities during the holiday season in December 2013, which will be the same amount of activity as MaySept. of $36,000 but the marketing cost will be more since we will have to compete harder. Based on our previous sales experiences over the past 10 years we have not had merchandise returned.

EXPLANATION OF EXPENSES:
* Equipment Rental- For the first three (3) years of operation, we will not be renting equipment for the business. We are primarily writers and directors of music and film. When we work on projects, we will work with independent contractors that will bring their own equipment, and this expense will be included within the project budget. Our new project that we will be promoting during the 2013 sales year is "Finding Forever in Love", and that expense is included in start up capital. ** Depreciation- For the first three (3) years of operation, we will not have depreciation because we do not have to purchase any new equipment. We are primarily writers and directors of music and film. When we work on projects, we will work with independent contractors that will bring their own equipment, and this expense will be included within the project budget. Our new project that we will be promoting during the 2013 sales year is "Finding Forever in Love", and that expense is included in start up capital.

CALCULATIONS:
Interest Expense: Monthly Payment for a Bank Loan of $25,000 @ 4.5% interest, for 5 years is: $466. The total interest on the loan is $2964.53. $2964.53/60 months= $49.41

Years 2 and 3 Projections: The projections were based on an inflation rate increase of 10%. Its also based on the company using the same sales methods in year 2 and 3, as in year 1

Startup Capital Requirements COSTS Beginning Wages Beginning Rent Beginning Utilities Licenses / Permits Build-in expenses (improvements) Setup Fees Office Supplies Training Legal Fees Consultants Insurance Initial Marketing Other (New Movie Budget) Other (New Movie Soundtrack) Other (Re-stock of previous projects) TOTAL COSTS ASSETS Computers Furniture Fixtures Capital Equipment Vehicles Building Other (change title here) Other (change title here) Other (change title here) TOTAL ASSETS WORKING CAPITAL Cash (until the company is self sustaining) Contingency Fund TOTAL WORKING CAPITAL

Footnotes $0 $900 $300 $200 $200 $500 $600 $600 $3,000 $6,000 $2,000 $10,000 $15,000 * $7,000 ** $3,000 *** The company will break even $49,300 when the cumulative net profit &$ (excluding depreciation) meets $0 ^^ or exceeds the amount listed below, which is the startup costs $0 and assets added together. To $0 fulfill the break even $0 $0 requirement, the cumulative net $0 profit must be calculated on the $0 income statement and $0 compared to this amount. $0 .----------> Total Costs & Assets: $49,300 $15,000 $5,000 $20,000

TOTAL STARTUP CAPITAL REQUIREMENTS $69,300

FOOTNOTES:
*-We are filming our new movie "Finding Forever in Love" in August 2012. This will be the first new project for the company to sell in 2013. The total production budget of the movie is $15,000.00. **- We will be selling the movie soundtrack in conjunction with the DVD, and also separately (Physical and Digital Downloads) The total recording budget, including studio time, mixing & mastering, replication, and digital distribution package. ***- My business partner and myself have previous projects that will be to re-stocking and offering for sell, to add to the companies 2013 and beyond revenue. We would be ordering 1000 copies each of two (2) feature films and one (1) music CD. &$- We will be utilizing the furniture, fixtures and equipment that we had previous purchased to add to our home office. We write our own material, and create budgets for each of our projects that include independent contractors that will bring their own equipment. ^^- We both recently purchased new computers that we have been using as freelancers that we will continue to use at least for the first 3 years of business.

EXPENSE ASSUMPTIONS Salaried Employees Title 1 President 2 Vice-President 3 4 5 Hourly Employees Title 1 2 3 4 5 6 7 8 9 10 (Insert to add more)

Job Description

Annual Wage $ $ *

SALES ASSUMPTIONS Products being sold Unit Price Movie1 $ 10.00 Movie2 $ 10.00 CD1 $ 5.00 Movie3 $ 10.00 Movie Soundtrack $ 10.00

Your Cost $ 1.00 $ 1.00 $ 0.80 $ 1.00 $ 0.80

Gross Margin Per Sale $ 9.00 $ 9.00 $ 4.20 $ 9.00 $ 9.20

Job Description

Hourly Rate

Employee Benefits Policy Group Plan Cost Cost Per employee Health/Dental Payroll Taxes Assume

10% of salaries

Professional Services (Independent Contractors) Position Lawyer Accountant PR Firm Consultant 2 Rent Building/Office Type Home Office Depreciation Assets

$ 3,000.00 $ 4,000.00 $ 5,000.00

Amount per month Lease Duration $ 300.00 12 months

Value (new)

Residual Value

# of Years

Insurance Policy Williams, Turner, & Mathis

Description Production Liability

Cost per month

300.00

Telephone Service Plan Description AT&T Cell/Wi-fi/Land

Cost per month 150.00

Utilities Provider Ga Power

Description Electric

Cost per month 30 Amount % of Total $ 15,000.00 21% $ 30,000.00 43% ^^ $ 25,000.00 36% $ 70,000.00 100% This amount should equal the total startup capital requirements

Sources of Funds Personal Funds Investor(s) Lender(s) Total Needed Interest Expense Loan Amount $ Interest Rate Duration of Loan

25,000.00 For the purpose of this project, assume you will be obtaining a loan as a part of the financing mix. 4.5% 5 Years

SPECIFIC ASSUMPTIONS:
*Payroll- My business partner and I decided that for the first three years, we will not take a salary or benefits from the company. Any profit the company receives will be used to pay off debt and pay back investors first. *Employees- Because we are a project based company, for the first three years, we plan to hire independent contractors as needed, and their compensation will be included in the project budgets. *Legal Fees- Some of our legal fees will be mitigated because I am a certified paralegal and can at least draft most of the documents because forwarding them to our attorney for review. *Accounting- We will consult with an accountant quarterly, and use computer software such as Quickbooks to keep track of our expenses between those times. *Insurance- Since our business will be ^^- Investors- we will be seeking crowdfunding to cover the $30,000 estimated in this category. Investors will receive tangible items, or personal movie premieres and/or concerts in lue of equity in the company. SALES ASSUMPTIONS *- New film, "Finding Forever in Love" will be the first new project of the formed partnership. The cost of per unit for each product is based on using the company, Discmakers, for our printing and packaging (www.discmakers.com).