Fantazmus Treasure Tool

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2 Company Overview Fantazmus is a supernatural being and the word itself comes from the Latin word for something that has been apparently seen, heard, or sensed, elusive or delusive, an image that appears only in the mind, an illusion, fictitious. Fantazmus is also the visible representation of something abstract - ESP as appearing in a dream or hallucination, existing in perception only. In Chinese it transslates as Noble Phantasm. The first kanji means Treasure and the second means Tool. We believe that Classical Art, Music and Architecture are the real Treasures of our society, creation of which has been neglected for at least two centuries.. This company is being created as a Tool to finance an effort to motivate artists, musicians and architects to create n ew Classical Art, Music and Architecture.

3 Company Overview Fantazmus Studios ( Fantazmus, Studio or Company ) will cut through the obstacles in the television business by building a company based on experience and unparalleled access, responsible and forward thinking financing models and the support of the industry s most powerful television packaging agencies. Fantazmus is an independent television production studio focusing on creating, packaging and producing original content television properties including, but not limited to, scripted dramas, comedies, reality shows and game shows. Fantazmus will create fully developed, packaged projects ( TV Properties ) for license to broadcast and cable networks both domestically and internationally. The Company will retain a significant equity portion in each of its respective TV Properties resulting in a library of powerful television assets that will generate recurring high margin revenue. will generate recurring high margin revenue.

4 Company Overview The company uses forward thinking financing models and deft producing and deft producing experience instead of writing deficit financing checks to produce its TV Properties. This results in significant ownership in each property for Fantazmus with limited to no financing risk. This model requires unique components to work: Experienced and trusted executives who can actually produce TV Properties themselves. An acute understanding of television financing. Working relationships with all of the broadcast and cable networks and the biggest international distributors. Unfettered access to, and support FROM THREE of the most powerful television packaging agencies in the world CAA, ICM or WME. Fantazmus has all of these components.

5 Company Overview (Cont.) The marriage of these unique elements gives Fantazmus many advantages including, but not limited to, the ability to operate as a lean company in terms of overhead, the ability to develop TV properties for a lower development cost per property than a major studio and it gives Fantazmus the ability to offer the most sought after writers and show creators a better deal than the existing studios in terms of their equity participation in the TV Properties they write and create. This means Fantazmus can be a more attractive option to top talent as a producing partner than a major studio. Fantazmus has access to Hollywood s three marquee talent agencies CAA, ICM and WME. CAA, ICM and WME are the industry s largest and most respected talent agencies with access to the deepest pool of premium talent including many of the most recognized actors, writers, athletes and entertainment professionals internationally. CAA, ICM and WME have a stellar record in the television industry and have packaged almost every single one of the world s most recognized shows including American Idol.

6 Company Overview (Cont.) Fantazmus will work intimately with Agencies to produce and package projects with select professional talent. As a result of its deep industry relationships, Fantazmus will have access to an unparalleled pool of creative talent, entry into every major broadcast network and cable channel and access to Fortune 500 sponsors, maximizing the likelihood of success for each project.

7 Company Overview (Executive Team) Fantazmus executive team includes industry executives with proven track records in developing & producing television content in United States and abroad. This translates into the management having deep relationships with the presidents and executives of some of the major broadcast network, cable channel, talent agency and physical production vendor in the industry.

8 Company Overview (Executive Team) Fantazmus has access to (CDN) Content Distribution Network, which is owned and operated by our European partners. Their technologically advanced CDN has been designed, developed, implemented and is currently delivering almost 500,000 films and other TV programs over the Internet to more than 50 million subscribers around the world in seconds!!! This partner is a private company owned by Russian billionaires and we are contractually forbidden to identify it to anyone who hasn t signed an NDA agreement. We can tell you, however, that this partner, this company that is implementing our Internet Content distribution is the world s oldest, largest and technologically advanced provider of entertainment and informational programming over the internet. It has been in business for two decades, has 30 times more programs in its instant library than Netflix and has 2.5 times Netflix s number of subscribers, with each subscriber paying an average of more than $20 a month than typical Netflix subscribers pay. So, their track record is a very important factor in making Fantazmus Studios a very low risk investment.

9 Current Situation THERE IS A NEED TO CREATE AN INDEPENDENT STUDIO The business is broken. The opportunity has never been better. 5 Companies control the marketplace (ABC-Disney, News Corp, NBC-GE, CBSViacom, Warner Bros.)

10 Current Situation (Cont) Writer s strike has left writers frustrated with current models and very open to creating new models. Creative financing can force larger pick-ups and cleaner profit sharing, both of which are very attractive to high-end talent. DVD business has become a cash cow and generates income within 18 months of series launch. Global appetite for US television series has increased number of revenue streams which pay average deficits down. Distribution will become increasingly digital, requiring smaller staffs to distribute on a global scale.

11 The Solution CREATE AN INDEPENDENT TELEVISION STUDIO TO CREATE A PORTFOLIO WITH LITTLE TO NO DEFICITS Capital to cover Executive Staff, Office Space, Development Funds. Research, design, develop and implement solution for production financing via raising funds by selling Product Placement in any project under development and/or consideration to be developed to finance newly developed content and pay all the debts and all expenses associated with production. A fund to provide bridge financing for shows through tax credits as well as foreign sales.

12 The Solution Partnerships with producing partners that will help eliminate deficits through tax reimbursements and credits in places like Canada, New Mexico, Connecticut, Pennsylvania. Partnerships with foreign sales companies to utilize existing foreign sales staffs to cost-effectively explore foreign pre-sales in order to reduce deficits on 1st season shows. Accessing high-end talent with global brand appeal to generate significant foreign sales. Offer talent cleaner ownership in their respective shows. DVD, digital, merchandising/licensing, and ancillary sales.

13 The Plan: FANTAZMUS STUDIOS WILL BUILD A LIBRARY OF HIGHLY VALUABLE TELEVISION ASSETS BY BUILDING A SMART AND RESPONSIBLE COMPANY THAT CONSISTENTLY DEVELOPS, SELLS AND PRODUCES TELEVISION AND AUDIO CONTENT. Develop TV content. Solicit scripted and unscripted pitches from top show creators via CAA (as well as other top agencies) Develop scripted and unscripted projects internally. Develop proven international formats for US market. Package projects with CAA talent (as well as other top agencies).

14 The Plan: Sell assets to Networks, Cable Channels, Web Sites, etc. Fantazmus s founders and CAA, ICM WME have working relationships and personal friendships with the presidents and executives at every network. Produce episodes of shows that are picked up Maintain creative and financial control. Retain ownership. Generate ongoing revenue streams from multiple sources while building a valuable library.

15 Develop Shows Scripted Fantazmus will find and acquire promising scripted shows, both sitcoms and dramas, package them, sell them to networks and produce them while retaining ownership. Fantazmus will put an initial emphasis on half hour sitcoms such as: of shows such as: COSBY THAT 70 S SHOW 3 rd ROCK FROM THE SUN ROSEANNE NBC FOX NBC ABC Fantazmus s top executives and relationship with CAA will yield a high probability of developing many successful shows. CAA represents many of the top writers in television; CAA s equity stake will motivate it to bring its best clients and their projects to Fantazmus. Fantazmus independent studio model will be attractive to writers. Fantazmus will offer writers an equity stake in the shows they develop. As an independent studio, Fantazmus will have fewer creative restrictions than a studio connected to a network.

16 Develop Shows Scripted Each year, Fantazmus will utilize $1,000,000 of its development fund to develop scripted properties. Scripted properties includes half-hour sitcoms and hour-long dramas. Per show development costs for Fantazmus will range from $0 to $75,000. Networks and cable channels pay what is known as a penalty, usually averaging $50,000, if they do not produce a pilot they have bought an option to make during a particular window of time (typically one year). Consequently, Fantazmus annual development fund will allow the company to develop more shows each year.

17 Develop Shows Unscripted The unscripted television marketplace has exploded in the last decade and there is no end in sight. Reality shows of all kinds game shows, talk shows, docu-series, competition shows, etc. exist on every network and the formats are as varied as American Idol, The Real Housewives, Judge Judy and so on. Fantazmus will be an industry leader in supplying networks with reality shows, such as: Deion and Pilar Primetime Love: Oxygen The Kentucky Kid: MTV Branded Entertainment Initiative Network TBD Trick It Out: MTV Ballbreakers: GSN Ultimatum: Style Channel Burned: MTV Taildaters: MTV Vegas Weddings Unveiled: GSN The Definite Maybe: Independent Feature

18 Develop Shows Unscripted Each year, Fantazmus will utilize $1,000,000 of its development fund to develop unscripted projects. Unscripted properties includes game shows, reality shows, daytime and late night talk shows and live specials. Development costs range from $0 to $10,000 per show.

19 Develop Shows Talent Fantazmus will work with CAA to package its shows. Packaging refers to bringing together the best writers, actors and directors to work with Iolite on a project before it is pitched to networks. CAA is the largest talent agency in L.A., representing many of the top television writers, directors, and actors Writers include John Wells (West Wing, ER), Paul Attanasio (House), Damon Lindelof (Lost), and Anthony Zuiker (CSI New York, CSI Miami). Directors include Brett Ratner (Prison Break) and Ron Howard (24). Actors include Hugh Laurie (House), Eva Longoria (Desperate Housewives), and Kelsey Grammer (Frasier). CAA is considered the top talent and literary agency in the world. CAA represents some of the biggest stars in the entertainment industry, including:

20 Develop Shows Package TV Property CAA packages over 40% of all the properties on the major networks during the prime-time hours. CBS: CSI, CSI New York, CSI Miami NBC: The Office FOX: House, American Idol ABC: Lost, Grey s Anatomy, The Bachelor CAA is also an industry leader in packaging unscripted shows, including Late Night with David Letterman (CBS), and Oprah (ABC). It is a huge advantage for Fantazmus that CAA is their packaging agency as CAA packaged shows are traditionally more attractive to buyers and distributors.

21 Sell Shows Market TV Properties Once its shows are packaged, Fantazmus will shop them on the open market and sell them to the highest bidder. CAA s involvement will give Fantazmus access to every major network, cable channel and other outlet. Fantazmus independent studio model will allow the Company to pitch to multiple networks without a conflict of interest, thereby maximizing the potential for the show to be set up. Given the caliber of its executives and creative talent, Fantazmus will set up a high percentage of its shows at networks and cable channels.

22 Produce Shows Fantazmus will produce all of its shows, allowing it to: Maintain quality control; Retain ownership; and Benefit from production-related revenues. However, Fantazmus will not finance the production of individual projects. Most shows will be financed entirely from up-front network licensing fees. In the event additional production cash is needed, known as deficit financing, Fantazmus will raise financing from foreign pre-sales through its relationships with international distributors, gap finance production tax credits and/or, in the case of an expensive drama, lay off any deficit on the network s sister studio while retaining an ownership position. Fantazmus has already approached the major studios owned in conjunction with the major networks and determined that these studios will fund the deficit of a show to be aired on its related network taking that risk off of Fantazmus plate.

23 Show Financing Models The next four pages show examples of Fantazmus financing models. Models like these allow the Company to build a library of television assets without deficit financing shows. This allows Fantazmus to mitigate most of the financial risk associated with the television business while capitalizing on the immense value that comes with owning television shows. Comedy & Reality Series: Will be produced for the network license fee. No deficit financing required. Cost Effective Cable Comedy: Will be produced with a combination of the network license fee and international pre-sales in certain territories. The pre-sales cover any deficit financing that may be required. Cable Drama Series: Will be produced for the network license fee and a combination of state supported production tax credits and, if need be, international pre-sales and DVD pre-sales. The tax-credits and pre-sales cover any deficits that may be required. Big Budget Broadcast Network Drama: Company would partner with respective broadcast networks sister studio, reduce to 15 points of the back-end and assume no financial risk during production. The networks sister studio pays the deficit financing needed.

24 Show Financing Models Comedy & Reality series produced for license fee EXAMPLES: AMERICAN IDOL, THE OFFICE 1 st season & 10 ITEMS OR LESS THE OFFICE 1 st Season: Budget was $1 million. NBC paid a $1 million license fee. PLUS Foreign sales. PLUS DVD sales. AMERICAN IDOL 1 st Season: Budget was $850k per episode. NBC paid a $850k license fee. PLUS Coke paid $200k an episode for product integration. Series owned by Simon Fuller. PLUS Renegotiation with NBC for subsequent years. 10 ITEMS OR LESS ON TBS: Budget is $750k per episode. TBS pays license fee of $650k per episode. PLUS Product integration generates $200k per episode. PLUS DVD sales.

25 Show Financing Models Cost-effective Comedy EXAMPLE: KROD MANDOON Budget $1.1 million per episode with a guarantee of 6 episodes. Comedy Central covers a $550k per episode license fee and will offer a larger series order (6 episodes based on pilot script) in exchange for getting a $1.1 million budgeted series. Foreign pre-sale generated $600k per episode with only 3 territories cleared (Germany, UK & France). Goal is to clear additional foreign territories to increase profitability on individual episodes. Creatively the show lends itself to large DVD sales. DVD sales will be pure profit. A successful series on comedy Central can drive 1 Million DVD units (SOUTH PARK, DAVE CHAPELLE).

26 Show Financing Models Cable Drama Series EXAMPLES: THE BEAST & MAD MAN Budget $2.4 million per episode. Cable Co. (A&E/AMC) covers a $1.8 to $1.9 million license fee. Tax reimbursements can reduce deficits. Up to 35% of the production budget can be reimbursed in Canada if company follows Canadian production and creative guidelines. Up to 14% of production budget can be reimbursed in New Mexico, Pennsylvania, & Connecticut if company follows States guidelines. Foreign pre-sales or sales will put series in profits. PLUS DVD revenues. PLUS Building library value.

27 Show Financing Models Big Budget broadcast network comedy & drama EXAMPLES: LOST, HEROES, 24, PRISON BREAK Average license fee on a first year show can cover 50% of the budget. Budgets of these respective shows can reach north of $3 million an episode in a first year series. This ratio would make deficits too risky for company. Company would partner with respective broadcast networks sister studio. Reduce to 15 points of the back-end. $35k to $50k per episode fee. Negotiate control of foreign distribution if possible. Mitigating risk at the same time allowing the concept to see it s full potential. In success back-end points can each be worth several million.

28 Revenue Projections Fantazmus projections are conservative and do not fully reflect potential revenues from product placements and other advertising collaboration. The projections also do not reflect any of the produced shows becoming top 20 shows, examples of which include these shows packaged by CAA (projected values):

29 Revenue Projections and Library Values (estimated) 1 st Year (8 mo.) 2 nd Year 3 rd Year 4 th Year 5 th Year REVENUE REVENUE REVENUE REVENUE REVENUE ($230,000) $27,960,000 $105,240,000 $368,840,000 $1,047,920,000 LIBRARY VALUE LIBRARY VALUE LIBRARY VALUE LIBRARY VALUE LIBRARY VALUE $0 $60,000,000 $400,000,000 $1,200,000,000 $3,600,000,000 There are hundreds of spec scripts writen by CAA s stable of top television writers and show creators to which we will have unfetered access. A spec script is like a spec house it is a show that a writer writes without a studio deal in hopes of selling it. It is a free IP of which we can try to make something. Upon capitalizaton, FS will meet with dozens of top writers and show creators AND reality show creators who are looking for a studio partner for their next great ideas. F/S can/will make deals with any and all. The Script examples on the next several pages are just examples of the caliber of projects Fantazmus has access to and can get its hands on for litle to no money. &$#%M'*0%#F&>-7#*%+,%0"#%.&7/3#$%+,%-$+M#.0*%<+7/0#%"&*%&..#

30 TYPES OF SCRIPTED PROJECTS AVAILABLE TO FANTAZMUS FOR ACQUISITION VIA CAA IN 2012 *There will be an ongoing flow, these are just a few examples Savior One Hour Drama (a la Heroes ) Zone 5 One Hour Police Drama Potentially available to (CAA package) Potentially available to (CAA package) Developed by Stan Lee Spec Script Creator: Stan Lee (founder Marvel Comics, Spiderman, X-Men ) Writer: Damon Lindelof ( Lost ) Emergency One Hour Supernatural Medical Drama Inland Empire One Hour Youthful Horror Series The Watch One Hour Supernatural Thriller Intervention One Hour Medical Drama Untitled WWII Drama One Hour Drama Potentially available to (CAA package) Potentially available to (CAA package) Potentially available to (CAA package) Potentially available to (CAA package) Potentially available to (CAA package) Spec Script Developed by Breck Eisner Spec Script Spec Script Spec Script Creator: Deran Sarafian (Co-Executive Producer of House ) Creator: Breck Eisner (director of Sahara ) Writers: Kevin & Dan Hageman ( Hotel Transylvania ) Writer: Jason Cahill ( Fringe, The Sopranos ) Writers: Aron Coleite & Joe Pokaski ( Heroes ) On The Couch Hour Comedy Potentially available to (CAA package) Spec Script Family Comedy Writers: Alan Loeb ( 21 ) and Craig Doyle Detoured Hour Comedy Public Defender Hour Comedy Potentially available to (CAA package) Potentially available to (CAA package) Spec Script Spec Script Writers: Chris Pappas & Mike Berier ( Unhitched for FBC) Writers: Ross McCall & Aaron Peters ( Just Shoot Me )

31 ALTERNATIVE ROLL IN PROJECTS COMPANIES CAA REPRESENTS (POTENTIAL CO-PRODUCTIONS) FLOWER FILMS KATALYST FOXXKING PRETTY MATCHES OVERBROOK DREAMWORKS DREW BARRYMORE ASHTON KUTCHER JAMIE FOXX SARAH JESSICA PARKER WILL SMITH STEVEN SPIELBERG

32 F O R E I GN S A L E S P R O J E C T I O N S F O R T V M O V I E EUROPE Estimates Benelux 300, ,000 France 500, ,000 Germany 1,000, ,000 Greece 50,000 35,000 Israel 40,000 20,000 Italy 500, ,000 Portugal 45,000 25,000 Scandinavia 400, ,000 Spain 850, ,000 Turkey 75,000 50,000 United Kingdom 1,000, ,000 Total Europe 4,760,000 3,330,000 EASTERN EUROPE CIS 1,200, Eastern Europe 800, Total East Europe 2,000, NORTH AMERICA Canada N/A N/A United States N/A N/A Total North America - - ASIA Pan-Asia PTV 120,000 65,000 China 240, ,000 Hong Kong 60,000 20,000 India 40,000 30,000 Indonesia 85,000 40,000 Japan 750, ,000 Malaysia 45,000 20,000 Middle East 75,000 55,000 Philippines 50,000 20,000 Singapore 40,000 25,000 South Korea 250, ,000 Taiwan 100,000 40,000 Thailand 100,000 40,000 Total Asia 1,955, ,000 LATIN AMERICA Brazil 400, ,000 Sp. Speaking Latin America 650, ,000 Total Latin America 1,050, ,000 AFRICA East and West Africa South Africa 55,000 45,000 Total Africa 65,000 45,000 OCEANIA Australia/New Zealand 400, ,000 Ancillary 500, ,000 TOTAL 10,730,000 5,455,000

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