Business Plan Renaissance Studio, Ltd

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Business Plan

Renaissance Studio, Ltd.

“The Future Of Film Making & Investment”

Please direct inquiries about this document to:

Donald G. Skipper - CEO

Renaissance Studio, Ltd.

Email: [email protected]

Website: www.RenaissanceStudio.org

Phone: USA - 972-239-2497

THIS BUSINESS PLAN CONTAINS CONFIDENTIAL AND PROPRIETARY INFORMATION REGARDING THE BUSINESS OF RENAISSANCE STUDIO, LTD. (“RSL”). THIS BUSINESS PLAN IS SUBMITTED TO YOU FOR YOUR CONFIDENTIAL USE IN CONNECTION WITH THE EVALUATION OF A POTENTIAL INVESTMENT IN THE COMPANY AND MAY NOT BE REPRODUCED IN WHOLE OR IN PART OR USED FOR ANY OTHER PURPOSE. ANY DISTRIBUTION OF THIS BUSINESS PLAN EXCEPT TO WHOM THIS BUSINESS PLAN IS ADDRESSED IS UNAUTHORIZED WITHOUT THE PRIOR WRITTEN CONSENT OF RSL.

THIS BUSINESS PLAN IS FOR INFORMATIONAL PURPOSES ONLY AND SHALL IN NO EVENT BE DEEMED TO BE AN OFFER OR A SOLICITATION TO ANY PERSON TO PURCHASE SECURITIES IN RSL. AN OFFER OF SECURITIES IN RSL OR ITS AFFILIATES SHALL ONLY BE MADE PURSUANT TO A PRIVATE PLACEMENT MEMORANDUM OR SECURITIES PURCHASE AGREEMENT IN ACCORDANCE WITH APPLICABLE STATE AND FEDERAL SECURITIES LAWS.

THIS BUSINESS PLAN INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE ANTICIPATED FUTURE PERFORMANCE OF RSL. ACTUAL RESULTS COULD DIFFER MATERIALLY. NO ASSURANCES CAN BE GIVEN THAT THE STATED RESULTS WILL BE ACHIEVED.

2 Table Of Contents Page 1. Executive Summary 4 2. Business Plan Overview 36 3. “Hollywood” Reality Check 53 4. Concept Evaluation, Screenwriting & Development 61 5. RSL Movies in Development 78 6. The Movie Market Opportunity 86 7. The Market Entry Premise 88 8. Movie Industry Overview 92 9. The Existing Movie Investment Profile 98 10. Large Independent Producer Performance Review 109 11. Why Invest In Movies? 112 12. RSL Financial Projection Summary 118 13. Investment Risks & Considerations 120 14. Business Plan Execution & Movie Production 124 15. Distribution, Marketing & Advertising 127 16. How Movie Distribution Works 136 17. Capital Funding Alternatives 137 18. “Revelations” Concept & Investment Summary 140 19. “Revelations” Production Execution Example 146 20. “Revelations” Release Schedule Example 147 21. RSL Management & Business Plan Execution Profile 148 22. Movie Classifications Data 151 23. Exhibit #1 - Executive Profiles 153

24. Exhibit #2 – STX Entertainment - New Studio Template Example 159

3 Executive Summary

Renaissance Studio, Ltd. (“RSL”) is a virtual movie studio that has invested many years in a comprehensive analysis of the motion picture industry and the development of the means to exploit its vulnerabilities and the irrationality of the public equity market valuation metrics to earn extraordinary risk adjusted returns on equity (“ROE”).

This extensive R&D process has produced a digital age business model, a 160 page business plan, advanced content evaluation metrics and state of the art screenwriting methodologies. These tools have been employed to create an initial inventory of 14 cost effective, high concept movie projects that are designed to launch up to 10 sustainable film franchises that skillfully target the viewing preferences of broad spectrum international demographics.

The above elements represent a sound foundation for a new movie studio that will project a compelling IPO profile in year 4 that will deliver a risk adjusted Alpha above 10,000 in year 5. Full due diligence on RSL will confirm the strong plausibility of achieving this outcome.

The Exploitation Opportunities

The RSL value proposition is grounded in two lucrative exploitation opportunities:

• Global Movie Market Dysfunction Everyone is familiar with the recurring frustration of wanting to go to a movie, checking the listings and finding nothing that inspires them to go to the theater. This reality is an exploitation opportunity. • No industry displays a greater disconnect between product features and consumer preferences. • The industry systematically ignores the viewing preferences of over 80% of the global market: • The over 40 demographic makes up half the market and it is almost completely disregarded. • Females make over 60% of the ticket buying choices but they have very few options that target their preferences. • Over 70% of the movies that reach theaters have almost no international market resonance potential even though over 80% of the global move markets are outside of North America. • There are very few movies for the 80%+ of people who are not attracted to shallow story telling, one dimensional characters and gratuitous action, violence, depravity, horror and computer generated imagery that dominate modern cinema. • The persistent dearth of inspiring movie content is the reason that 90% of movie goers in North America see only 2 movies in theaters on average each year. This is not a demand problem. It is a dearth of quality supply issue that exists because of flawed methodologies and incestuous business practices that exclude premium movie content from sources outside the movie industry “bubble” that focuses on industry expectations rather than consumer preferences.

4 • Over 85% of movies lose money for production equity investors because they are poorly conceived to achieve strong global market acceptance. The above realities are the result of flawed business practices and content evaluation and screenwriting methodologies that pervade the industry. RSL has developed effective methodologies to exploit this dysfunction.

• Highly Irrational Valuation Metrics In The Equity Markets

The public equity markets for the motion picture industry are offering highly irrational price/earnings ratios in the 100x to 300x range. Please see the links below for Lions Gate (“LGF”) and Netflix (“NFLX”): https://finance.yahoo.com/quote/LGF?p=LGF https://finance.yahoo.com/quote/NFLX?p=NFLX A price/earnings multiple in the 100x to 300x range is very illogical but that is the reality of the current public equity market in the motion picture industry. This situation represents an exceptional exploitation opportunity for anyone who can create a compelling IPO profile. RSL is designed to exploit this irrationality.

The above realities represent a sensational investment opportunity for visionary entrepreneurs and insightful investors who are more inspired by maximizing their risk adjusted ROEs than fealty to flawed and/or timid investment parameters of the capital markets and the faulty business practices of the movie industry.

The RSL corporate goal is to raise $50 million of primary equity capital and convert it into $5 billion+ of IPO proceeds in 5 years. Full due diligence on RSL will confirm the plausibility of achieving this goal.

Background

An enormous amount of time and thought has been invested in the creation of the RSL value proposition because a going concern movie studio that is grounded in effective business practices, methodologies and strategies will deliver exceptional risk adjusted ROEs of almost any investment alternative.

This assertion is not a theory. It is supported by the incredible increase in the market cap of Lions Gate Entertainment (“LGF”) that occurred between January of 2012 and October 2013 that is visible in the chart at the link below: https://finance.yahoo.com/echarts?s=LGF+Interactive - {"range":"5y","allowChartStacking":true}

Please consider the following data points:

[Intentionally left blank for chart formatting purposes]

5 The Lions Gate Equity Performance Template

Description LGF Stock Price LGF Market Cap

January 2012 $ 9 $1.1 billion

October 2013 $ 37 $5.5 billion

Change + $ 28 + $4.4 billion

% Change + 411%

The above $4.4 billion increase in market value was achieved largely on the strength of earnings from a single film franchise, “The Hunger Games”. This performance inspired the creation of RSL to exploit this opportunity by launching a going concern movie studio that would project a compelling IPO profile that could exploit the irrationality of LGF price/earnings multiples that have ranged between 30x to 300x in 2016. (See below) https://finance.yahoo.com/q?s=lgf

LGF is not a “one off” equity market anomaly. The link below to the Netflix (“NFLX”) profile illustrates that exceptional P/E multiples are not unusual for independent filmmakers and distributors in the motion picture industry: https://finance.yahoo.com/quote/NFLX?p=NFLX LGF and NFLX are the best available public equity market references because all of the other major movie studios are relatively small subsidiaries of major conglomerates. The link below summarizes the recent acquisition of Legendary Entertainment by Dalian Wanda for a 30x P/E multiple: http://nebula.wsimg.com/3079e1f2a9b3d928639e6a90dc6f2dee?AccessKeyId=9E533268DA51246EF35 E&disposition=0&alloworigin=1 While the concept of exploiting the irrationality of public equity market valuation metrics makes sense for people who are focused on maximizing risk adjusted ROEs, it is not a concept that resonates within the irrational conventional wisdom of the capital markets. The intrinsic merit of the strategy gets lost in formulaic concerns about venture capital, start ups, set in stone investment parameters that ignore risk adjusted ROI potential and the poor earnings track record of the movie industry. All of these are reasonable concerns within the “bubble” of “group think” in the capital markets but they are all more than offset by the RSL valuation proposition and risk management strategies. As an example, the big funds and investors at the link below are more than willing to hold positions in LGF with current P/E multiples near 100x and assume all the huge downside risks associated with these irrational valuations of a company that posted negative operating cash flow for its FYE 3/31/16 and is poised for a worse performance in FYE 3/31/17.

6 They are also terrified by the perceived risks of investing venture capital to create a new studio that could exploit the irrationality of holding investments in any movie studio at above 100x valuation multiples. These are irrational people who are ripe for exploitation by the RSL business plan and capital markets strategy. https://finance.yahoo.com/q/mh?s=LGF+Major+Holders

RSL recognizes that almost everyone will reflexively choose their comfort zone of conventional wisdom over new concepts no matter the intrinsic merit of the value proposition or how certain the life changing wealth opportunity may be for them. RSL is for people who see the wisdom in thinking beyond conventional wisdom. RSL is not for investors who would hold LGF at current 100x+ P/E ratios or are content with playing the traditional V/C and P/E games that seldom offer risk adjusted ROEs above 15%. RSL is designed for investors who are more motivated by maximizing risk adjusted ROEs than fealty to the obsolete conventional wisdom of the movie industry or the irrational investment parameters of the capital markets. RSL is an ideal scenario for investors who can think at the level of exploiting dysfunctional major industries and the irrational valuation metrics of the public equity markets to earn Alpha’s in the 10,000 to 20,000 range in 5 years with manageable downside risks. RSL is for investors who are excited rather than intimidated by the concept of earning life changing wealth through sound and exploitative business practices and strategies. RSL recognized the huge movie industry and public equity market exploitation opportunities in 2013 and has since developed all the means to successfully exploit them to deliver a risk adjusted ROI scenario to prescient and sophisticated investors that dwarfs almost all other investment opportunities. Now the challenge is finding visionary investors who are willing to think outside the box of conventional wisdom. This document is designed to demonstrate that these assertions are not promotional hype but a sensational investment scenario in search of prescient and visionary capital partners to make it a reality. The path to extraordinary wealth lies in exploiting the status quo, not conforming to it. The Filmmaking Vision - Make Great Movies That A Lot Of People Want To See

RSL’s filmmaking vision is to create thought provoking and entertaining stories and multidimensional characters that effectively engage viewers on intellectual, emotional, visceral, sensual, intimate, visual, audio, artistry, life relevant, sociopolitical and poignant levels. RSL will produce triumph of the human spirit stories that project a positive alternative to the shallow story contrivances and gratuitous violence, action, sexuality, horror, depravity and computer generated effects that dominate modern cinema.

Every RSL film will include a diversity of resonance elements that will appeal to every gender, ethnic and cultural demographic over 10 years of age. Every RSL protagonist will project positive character traits and attributes that make them positive role models for young audiences in a difficult world.

7 The Movie Industry Investment Opportunity A professional review of the global investment landscape reveals that motions pictures offer risk adjusted ROEs that dwarf most other investment alternatives. Please consider the following features of the movie industry that make it the most exceptional risk adjusted ROI opportunity in the capital markets today: • Huge global movie markets that are very underserved - Almost everyone is a potential movie customer almost every week but almost 90% of people see only 2 movies on average in theaters each year because there are so few movies that inspire their interest. Almost everyone likes good movies and everyone who enjoys movies is very familiar with the recurring frustration of wanting to go to a movie, checking the movie listings and finding nothing that inspires them to go to the theater. These strange circumstances exist because there is no industry where there is a greater disconnect between product features and consumer preferences than in the movie industry. These realities represent tremendous market exploitation opportunities. • Low barriers to entry – Global distribution is the only major barrier to movie market entry and it can be overcome with adequate capital in the age of digital distribution. • Manageable risks – Market acceptance risk is the only major risk and it can be managed through the use of advanced content evaluation metrics that avoid poor movie concepts and proprietary screenwriting methodologies that skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum demographics. Other risks can be managed through sound business practices and adequate capitalization. • Almost unlimited product demand - The only major limitation on movie viewing demand is the availability of quality movie supply with compelling resonance elements that inspire people to view the movie. • Substantial sources of cost free capital – Government production subsidies and foreign rights presales can dramatically reduce equity risks that are not available in most other industries. • Exceptional risk adjusted ROI potential - Motion pictures offer the most sensational risk adjusted ROI potential of any industry and the worst ROI performance of any industry. This odd reality represents an exploitation opportunity for insightful entrepreneurs to deliver up to 20,000 Alphas to RSL investors in 5 years. • Rapid recovery of capital investments – Capital invested in well conceived movies is recovered in 18 to 24 months. • Strong public equity market profile – A movie studio profile is easily scalable to earnings levels that will drive a major IPO profile that will attract the big fund investors that support irrationally high price/earnings multiples above 50x in the movie industry. • Competitors with obsolete business models – The major studios continue to often rely on third parties to originate their movie projects even though this business model produces movies that consistently lose money for production equity investors.

8 The above realities represent a unique opportunity for prescient entrepreneurs and investors to earn extraordinary risk adjusted ROEs that compare very favorably to other industries as well as the public and private equity markets.

Competitor Vulnerabilities

The perpetual stream of uninspiring movies and that lose money for production equity investors is no accident. It is the end product of a flawed industry culture that operates in a “bubble” of erroneous “group think” and self-serving mythologies that perpetuate faulty business practices. Please consider the following realities: • The viewing preferences of 85%+ of potential customers are systematically ignored by the industry. There is almost nothing in theaters for people over 40 who make up about 50% of potential movie goers and very few films that skillfully target women who make over 60% of movie tickets choices for themselves, their children and their significant others. The RSL films target these major demographics with a diversity of compelling resonance elements.. • They continue to acquire and produce movie content from sources that are almost certain to lose money for production equity over 85% of the time. Contrary to industry mythology, this is not a problem of discerning which movies will and will not resonate with large movie audiences. It is a problem of flawed business practices and “group think” that has created a global pervasive dearth of inspiring movie content. This problem exists because: • The industry refuses to develop effective content evaluation metrics, screenwriting methodologies and screenwriters who can skillfully conceive of movie concepts and content with resonance elements that match the viewing preferences of broad global demographics. • The industry relentlessly promotes the value of “A List” actors over premium movie content and characters in spite of the overwhelming evidence that compelling story content and characters are the drivers of financially successful filmmaking and investment. • The industry chooses to target the same 15% of movie goers over and over again with action, violence, depravity and horror filled festivals of computer generated effects and stunts rather than producing content for the other 85% of the global movie audience who are not attracted to these repetitive types of films with their shallow stories and one dimensional characters. • They relentlessly promote of false mythologies to exploit equity investors rather than reward them for their good faith and the risks they take. These pervasive and nefarious business practices limit the availability of capital to the industry. • The traditional studio distribution model is eroding rapidly in the digital age. • They focus on insuring earnings for themselves rather than delivering strong ROEs to global audiences and investors.

9 • In independent films, they persistently exploit naïve investors to produce small budget films that target narrow demographics in low revenue ceiling genres with no likelihood of broad theatrical distribution or financial success.

RSL’s competitors are vulnerable to the digital age RSL business model and premium content origination methodologies that are designed to exploit their defective culture, business models and practices.

The Future Of Filmmaking & Investment Given all of the above, it would be irrational for RSL or anyone else to embrace on invest in the prevailing business models of the movie industry. However, the poor state of the movie industry business models and practices represents a major exploitation opportunity for insight capital partners. To exploit this opportunity, RSL has completed an exhaustive analysis of the movie industry and a lengthy and intensive R&D process that has produced:

• An movie industry exploitation strategy that is grounded in a comprehensive understanding of the movie industry, its many flaws and the methods to exploit its exceptional risk adjusted ROI opportunities. • A digital age business model for a virtual movie studio that will avoid the pitfalls and exploit the vulnerabilities of the movie industry. • A 160 page business plan that is designed to launch a going concern movie studio that will convert $50 million of primary equity capital into $5 to $10 billion of IPO proceeds by month 60. • Advanced movie content evaluation metrics that avoid the movie concepts that lose money for equity investors over 85% of the time. • Proprietary screenwriting methodologies that skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum international demographics to insure strong market acceptance on all RSL films. • An initial inventory of 14 sensational movie screenplays that: • Were written and developed with the RSL screenwriting methodologies. • Are high concept, triumph of the human spirit stories that will resonate with very large international audiences. • Can be produced on $30 million budgets per film to compete successfully in the action/ thriller/clandestine genres that have averaged over $450 million in gross revenues per film over the last 10 years. • Include thought provoking concepts, intriguing content and multidimensional characters that are superior to all films in these genres and in the theaters in general. • Target the disaffected audiences that include the over 85% of people are not inspired by shallow story telling and one dimensional characters that are immersed in gratuitous action, violence, depravity, sexuality, horror and computer generated effects that dominate modern cinema.

10 • 10 sustainable film franchise profiles are imbedded in the 14 screenplays will drive consistent earnings growth and a compelling IPO profile in year 5. • Two fully written trilogies are included among the franchises. They will serve as cornerstones in the foundation of the new studio. • State of the art risk management strategies and financial controls that will safeguard investor capital. • Advanced advertising and marketing methodologies that focus on the earnings effectiveness of all such expenditures. RSL represents a disruptive business model and methodologies scenario that is analogous to disruptive technologies in other industries but RSL will not be exposed to competitor technology development risk that could adversely impact the execution of the RSL business plan. Rather than embrace the movie project focus of the industry, RSL is focused on creating a sustainable, going concern movie studio. The studio focus is vital to minimizing risks and creating a compelling IPO profile that can exploit the 50x+ price earnings multiple that are available in the public equity markets.

RSL Capital Requirements

The industry analysis, R&D process, business model, business plan, evaluation metrics and methodologies are complete. RSL has applied the evaluation metrics and screenwriting methodologies to write and develop an initial slate of 14 movie screenplays that will launch up to 10 sustainable film franchises that can compete successfully in the global markets with the major Hollywood studios. It is not an exaggeration to assert that this project inventory is superior to any slate at any studio or producer if maximizing risk adjusted ROEs and IRRs is the goal. RSL is now in its capital formation phase. The initial capital requirements are as follows: • Primary equity capital $ 50 million • Primary debt capital $100 million Total primary capital requirement $150 million The $150 million of primary capital is needed to: • Create a going concern studio that can exploit the 50x+ price/earnings multiples in the public equity markets and deliver an above 10,000 Alpha to RSL investors in year 5. • Allow RSL to circumvent the major movie studios and there faulty culture and costly business practices. • Serve as a strong base of credibility and liquidity to successfully launch a major, going concern movie studio that will develop a compelling IPO profile. • Seed the production, marketing and global distribution of a perpetuity of 4 major motion pictures each year without the need to raise additional equity capital. • Enable RSL to negotiate from a position of strength with agencies, talent, theater chains & international distributors to obtain the best terms possible.

11 • Insure strong production values and global distribution on all RSL films. • Allow RSL to fund $24 million of marketing expenses per film and thereby insure broad releases and effective marketing of each RSL movie. The $150 million of primary capital is the minimum amount required to launch and successfully execute the RSL business model, plan and strategies. It will serve as a liquidity bridge to cost free capital (subsidies, etc.), other debt capital sources and operating cash flow. The $150 million of primary capital will fund the early RSL movie projects as needed. The goal is to minimize advances of the primary debt through less costly liquidity sources.

The RSL Capital Investment Plan The RSL capital investment plan can be summarized as follows: • Raise the $150 million of primary capital. • Execute the business plan to produce and release 11 movies over the first 4 years. Deliver one great movie per fiscal quarter in perpetuity. • Generate strong operating cash flow on the first 3 films that will enable RSL to return the $50 million of primary equity to the investors in month 30 to eliminate their primary equity risk. • Establish a strong earnings track record with a goal of $200 million in net profits in year 4. • Deliver a compelling IPO profile in year 5 that will deliver a $5 to $10 billion IPO windfall if: • RSL reaches $200 million in earnings and • Receives the 60x P/E multiple that Lions Gate (LGF) is currently enjoying on the NYSE. This translates to a very plausible 5 year Alpha above 10,000 and potentially as high as 20,000 or beyond if the movies outperform and/or public equity market irrationality exceeds expectations.

Capital Recovery & ROEs The RSL 5 year Base Case forecast assumes:

• The first 11 RSL films will be produced over 4 years on budgets that are 29% of the genre average. RSL will operate at a fraction of studio overhead levels and produce movies that are driven by innovative story resonance elements and characters rather than costly action and special effects. • The 11 films will achieve average revenues at 45% of the genre average global box office and DVD revenues. This will produce $206 million of RSL income in year 4. • No revenues from sources other than box office and DVD sales are included. This assumption is very conservative because revenues from rights sales, brand integration revenues, streaming and other sources can be very substantial. Their omission from the forecast provides a substantial margin for error on the 45% of box office/DVD sale assumption or as an offset to international distribution costs.

While these assumptions are reasonable, they leave a substantial margin for error before any losses would occur. After the second film achieves success, RSL should have the option to fully eliminate downside risks through partial international presales of territorial rights.

12 Based on the recent 70x P/E ratio of Lions Gate Entertainment (Ticker “LGF”) as a proxy, and year 4 projected income of $206 million, RSL common stock would be worth $15 billion. This translates to a 30,000% ROI for RSL primary equity investors. Full recovery of the primary capital is expected by year 2 with a goal of returning the $50 million of primary equity to investors by month 30. The IPO will provide liquidity in year 5.

RSL Budget RSL is not in business to raise incremental funds to produce individual movies because that approach very seldom produces superior risk adjusted ROEs for equity investors. RSL’s strategy is to build a major new film production and global distribution company with a strong enterprise value and IPO profile. This ambitious approach requires a significant initial capital commitment to: • Create credibility with all counterparties that are needed to successfully execute the business plan • Build the infrastructure of a going concern movie studio • Provide seed funding for the initial slate • Fund the production, global distribution and advertising of world class movies The goal is to build substantial enterprise value that will facilitate an early IPO or sale to a conglomerate or other investor group by no later than year 5. The major segments of the RSL budget are as follows:

• Film production ($ 317,500,000) Initial eleven film slate • Studio/Office/CAPEX $ 0 Facilities leased – See project/operating budgets • Corporate Expenses ($ 35,790,000) 4 years – No initial transaction fees included • Film Marketing/Advertising ($ 264,000,000) Needed to insure distribution & maximize ROEs Total Budget ($ 617,290,000) Includes initial eleven film slate Plus: Cost Free Capital $ 31,750,000 10% of Production Costs – Est. Subsidies Plus: Net Revenues $1,051,050,000 Base Case RSL Cash Flow $ 465,510,000 4 years Important Notes – The $465,510,000 base case cash flow represents a 9.3x coverage of the $50 million primary equity investment.

RSL owns the rights to 14 major motion picture screenplays but the budget only includes the costs for 11 over the first 4 years. The other 3 films will be held in reserve for 1) opportunistic substitution with one of the 11 primary films based on the market acceptance of the early films or 2) funded from operating cash flow if approved by the RSL board of directors.

The goal is to limit primary capital advances to less than $50 million through additional presales and/or other debt capital. Any timing issues or shortfalls will be made up from readily available short term debt

13 sources. The goal is to achieve average revenue levels far above the Base Case assumptions to easily return the $50 million of primary equity by month 30 to eliminate primary equity risk to the RSL investors.

Other Capital Sources

The films will be produced on a staggered 90 – 120 day basis to use operating cash flows as a source of funds and permit an improving annual earnings profile that will optimize IPO proceeds. The $471 million differential between the capital budget and the Primary Capital Facility will be financed by:

• Operating cash flow • Brand integration revenues – Integrating brands into the movies • Rights presales to distributors in certain international territories • Government subsidies / rebates • Gap, mezzanine, completion and other debt sources as needed • Talent “back end” contracts that lower “front end” costs – Converting actors into equity investors

RSL will place a major emphasis on minimizing the amount of Primary Capital outstanding and positioning RSL to return that capital to investors as early as month 30 if desirable.

Status Report - The RSL Business Plan Progression

1) COMPLETED - Complete a thorough financial, creative, risk and capital markets analysis of the movie industry over many years. 2) COMPLETED - Create and employ financial metrics to evaluate movie concepts and avoid the 85%+ of movie projects that lose money for production equity. RSL can now project the financial success or failure of movie projects over 90% of the time. 3) COMPLETED - Employ the evaluation metrics to develop movie content and writing methodologies that 1) avoid poor concepts, 2) skillfully imbed a diversity of compelling resonance elements that match the viewing preferences of broad spectrum global demographics into all RSL projects to insure consistently strong international market acceptance and 3) deliver movie concepts that have sustainable franchise potential. 4) COMPLETED - Employ the RSL methodologies to write and develop an initial group of movie projects that can be produced on $30 million budgets in the action/thriller/clandestine genres that average over $400 million in global box office/DVD revenues of. RSL has written 14 high concept screenplays that can be produced on budgets of $30 million each to compete in these genres and launch up to 10 sustainable franchises. The remaining 4 are sequels to the primary 10. 5) COMPLETED - Develop and write a comprehensive business plan to exploit the underserved global movie markets. The huge markets that include the 90% of people who are not inspired by shallow story contrivances or gratuitous action, violence, depravity, horror and CGI that dominate modern

14 cinema. Employ advanced methods to minimize costs and risks and maximize ROEs for global audiences and RSL investors. 6) IN PROCESS - Raise $50 million of primary equity capital and $100 million of primary debt capital to launch a new movie studio that will 1) attract top executives and talent, 2) fund all of its projects plus $25 million of P&A per film, 3) bypass the studios to contract directly with the theater chains, sales agents and international distributors, 4) control its content, advertising, marketing, distribution and roll outs and 5) avoid the faulty industry development culture, business and marketing practices and bloated costs. 7) THE FUTURE - Execute the RSL business plan: 1) assemble the optimum executive team, 2) produce at least 11 films over the first four years, 3) establish consistent earnings that validate the RSL vision and 4) deliver a compelling IPO profile and 5) execute an IPO in year 5 that delivers 30x+ the year 4 earnings and a 10,000%+ ROI on the $50 million equity investment.

Important Note RSL has elected to defer the hiring of its full executive team and the packaging of its movie projects until the primary capital is committed. The commitment will allow RSL to project the credibility to hire the optimum executive and execution teams for each project and insure broad global distribution. No production funds will be advanced until the investors approve the executive team and the project plans/ budgets/talent/packages for each film project. This is a by far superior approach to industry practices.

RSL Leadership

The RSL CEO is not a movie producer or promoter who is seeking naive investors to play the Hollywood glamour and investment game. • He is a 30 year capital markets veteran and risk analyst who has also written over 20 screenplays over the last 25 years. • He has invested years analyzing the film industry and creating the means to exploit its dysfunction and the irrational public equity markets to deliver exceptional risk adjusted returns on investment to prescient capital partners. • He is a financial fiduciary with a first priority and solemn responsibility to safeguard investor capital investments and reward investors for their leap of faith and the risks they take. • He is a visionary leader who see the big picture of all major global industries and the relative value of investing in motion pictures in the context of movie industry vulnerabilities and their public equity market exploitation potential. The primary capital will enable RSL to attract a small but exceptional executive team to execute the RSL business plan. They will be laser focused on creating a very compelling IPO profile by year 5.

The RSL Value Proposition The RSL business plan and capital markets strategy is grounded in years of movie industry analysis and decades of capital markets experience. Through extensive research and development, RSL has created

15 proprietary methodologies and strategies that are the foundation of a digital age business model for a virtual movie studio that will deliver exceptional wealth to RSL shareholders. The RSL business model includes the following key elements:

• Advanced movie content evaluation metrics Market acceptance of movie content is the greatest risk in film investment but the movie industry does a very poor job of assessing the market resonance of movie content and matching product features with the consumer preferences of up to 85% of potential viewers. This is the reason that over 90% of the global movie audience see only 2 movies on average per year in theaters and 85% of movies lose money for production equity investors. In defiance of movie industry mythology that it is impossible to project market acceptance of most movies, RSL has developed the means to largely 1) predict which movie concepts will resonate with broad spectrum demographics and 2) avoid the movie content profiles that consistently lose money. RSL applies these evaluation metrics to all of its projects to insure that all RSL films will achieve very strong global audience resonance that drives consistently strong profitability. Over 98% of movies that reach theaters would not meet the “green light” standards of RSL. Even the big budget “Tentpoles” that often generate big revenues and absolute profits would not qualify because their budgets are to big, their project concentration risk is too high and their IRR potential is too low to meet RSL standards.

• Proprietary screenwriting methodologies The quality of a movie concept and the well coordinated diversity of compelling resonance elements in the story content and characters are the vital keys to profitable filmmaking and investment. This assertion would seem obvious but it is not the cultural reality of the movie industry. Please consider the following: • There are countless movie producers, directors and actors who can convert a great movie screenplay with exciting resonance elements into good production values that resonate with large audiences and deliver strong earnings to investors. • There are no movie producers or directors or actors who can convert a poor movie concept and screenplay with few compelling resonance elements into a profitable movie. Therefore, the movie concept and content are the vital keys to financially successful filmmaking and investment. • There is overwhelming evidence in the theaters that it is unwise for investors to trust the studios and movie producers that operate inside the faulty cultural “bubble” of the movie industry to create movie concepts and content that will consistently resonate with broad spectrum global demographics. There is a pervasive and global disconnect between the movie content choices of producers and the viewing preferences of most people. The big problem in filmmaking and investment is that there is also a pervasive global dearth of compelling movie concepts and screenplays with stories that are well designed to match the viewing

16 preferences of broad spectrum global demographics. There is also intense competition among the studios and major producers for the screenplays that are typically generated by screenwriters who are represented by the major talent agencies. This approach to content sourcing is folly because less than 5% of agency represented screenwriters have ever written an original screenplay that made money for equity investors. Less than 1% ever wrote a second original screenplay that made money for equity investors. This reality exists because screenwriters are trained to write to the cultural expectations of the movie industry rather than the viewing preferences of broad spectrum demographics. Also, very few screenwriters possess the knowledge, the skill sets or the breadth of life experience to write stories that will resonate in compelling and inspiring ways with many different types of people. This is why most screenplays have shallow stories with one dimensional characters and rely on gratuitous action, violence, depravity, horror, sexuality and computer generated effects to achieve audience resonance. The problem is that the audience ceiling for these types of stories is only about 15% of the global market. The movie industry targets this same audience over and over again and largely ignores the viewing preferences of the other 85% of the global movie audience. This is why there are so few movies that most people want to see. Rather than invest in the development of screenwriting methodologies that skillfully target broad spectrum demographic preferences and screenwriters who are trained to employ them effectively, almost the entire movie industry operates on the false premise that acting talent is the key to successful movies. This is because the agencies earn a percentage of their actors compensation so they relentlessly inflate their value. In truth, “A list” actors almost never generate enough additional revenue to recoup their compensation premiums. While quality acting is important, all actors are only as good as the stories and the characters they play.

For RSL, it is not enough to avoid movie content from traditional sources that will not resonate with large audiences. A consistently profitable movie production and global distribution enterprise must be able to write and develop its own movie content rather than compete with everyone else in the movie industry for content sources that lose money for equity investors over 85% of the time. To address the content issue, RSL has invested years in the development of proprietary screenwriting methodologies that skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum international demographics to insure strong global market acceptance. RSL has employed these methodologies to create an initial inventory of 14 movie screenplays that include exciting resonance elements that target all people above age 10 and all gender, ethnic and cross cultural demographics to insure strong global market acceptance and profitability. These methodologies and the initial project inventory represent the most outstanding value proposition in the movie industry if maximizing risk adjusted ROEs is the investment objective.

Targeting Broad Demographics & Large Global Audiences The global motion picture markets are broken down into audience segments as follows:

17 Females Above Age 25 Males Above Age 25

Females Below Age 25 Males Below Age 25

Race Ethnicity Religion Culture Nationality Language Education Seniors/Small children

Research and common sense indicate that the movie industry does not employ sophisticated methodologies in crafting films to appeal a wide spectrum of audience segments and sub-segments. The motion picture industry is highly focused on creating films that target males below the age of 25 with the large “tentpole” action/CGI extravaganzas that dominate modern cinema. This approach has been financially effective for most of the major studios but it systematically ignores the other three major segments that comprise over 80% of the potential global market. These major categories are subdivided in the following general categories:

High concept High revenue ceiling Narrow Concept Low Revenue Ceiling

• Key RSL Demographic Strategies

• Broad Spectrum Appeal/High Revenue Potential - RSL focuses on 1) high concept films in genres with high revenue ceilings and 2) story content and resonance elements that target the preferences of very broad audience segments and sub-segments. • Target Over 40 Audiences - RSL will target the over 40 age group that is half the audience, largely ignored by “Hollywood” and more inclined to view movies in theaters. This group also has the financial means to be less sensitive to movie going costs. • Target Senior Audiences – Place emphasis on the over 65 audience that is growing rapidly, grew up going movies in theaters and are almost completely ignored. They have a lot of time to go to theaters at off peak times that they prefer and theaters need to fill. • Target “Disaffected” Audiences – Create films for people who not attracted to gratuitous sex, violence, action, depravity & CGI. • Target Women - Women are 52% of moviegoers and make up to 65% of the choices for themselves, their children and mates. • Strong Female Protagonists - RSL will feature the largely ignored element of brilliant and resourceful female protagonists. • Project A Positive Sociopolitical Narrative – Make triumph of the human spirit films that inspire & appeal to all demographics.

18 • Target Markets & Genre Focus The only major limitation on the demand for motion picture viewing is the availability of movies with compelling resonance elements that match the preferences of broad spectrum demographics. Despite this reality, over 85% of movies that are produced lose money for the equity investors because the project failed to match its features and resonance elements with consumer preferences. Independent films make up more than 90% of the movies that are produced each year and over 95% of them fail to make money for equity investors because: • They are almost always small budget films in low revenue ceiling genres that target very narrow demographics. • They fail to achieve broad distribution because 1) the target market is typically too small to attract theater chain and distributor interest and 2) the movie theater chains are reluctant to offer theater time to films unless they commit about $25 million to prints, marketing and advertising. This equates to about a $10,000 per screen investment on 2,500 screens which is a typical broad release in North America. • As one example, it is very difficult for the studios or investors to commit $25 million to market a movie with a $10 million production budget. Therefore, very few independent films reach a broad theatrical release that is vital to profitability on most films. Each of the major studios typically releases 3 to 4 “Tentpole” movies each year with production budgets above $150 million to create enough profitability to offset losses on the 15 to 20 other films they release annually. This reality is financial madness but it is the reality of the movie industry. RSL rejects this business model and will focus on producing and releasing 4 movies each year with $30 million production budgets each in the action/thriller/clandestine genres that average over $450 million in gross revenues per film. Producing modest budget movies with an exciting diversity of resonance elements in high revenue ceiling genres is a vital key to achieving consistently strong profitability that will project a compelling IPO profile in year 5 that will deliver a multibillion dollar earnings windfall to RSL shareholders.

• Film Franchises The ability to create sustainable film franchises is a vital key to reducing market acceptance risk and producing recurring earnings growth that will maximize the value of the RSL IPO profile. Therefore, the RSL project inventory is designed to launch up to 10 sustainable film franchises that will serve as a strong foundation for a profitable going concern movie studio that will project a compelling IPO profile by year 5.

While the major studios own the rights to numerous “Comic book and some other franchise scenarios like “Avatar” and “Transformers”, those films have budgets above $150 million each that concentrate risks in individual films and offer far lower internal rate of return potential than the RSL films.

19 RSL will blend the television and feature film business models to create annual installments of the RSL franchises in perpetuity as long as market acceptance continues to support the franchise. Many TV franchises such as “NCIS” and “Law & Order” go on for 15+ years and there is no reason that theatrical films cannot do the same on more infrequent installments with larger budgets that create much stronger production values to attract audiences to theaters.

The Marvel & DC Comics Template

Over 85% of "Hollywood" movies lose money for production equity because they ignore global audience viewing preferences. To offset this reality, the major studios make a few very large “Tentpole” movies that finance the many movies that fail. The most successful “Tentpole” franchises of recent years have involved fictional cartoon "Superheroes" based on comic book characters. The enormous box office success of these huge budget action/special effects extravaganzas allows the studios to lose money on most of their other movie projects.

Disney owns Marvel and Warner Brothers owns DC Comics. These movies have succeeded by repeatedly targeting a small subset of movie goers that represent about 10-15% of the movie gore audience. This approach has been very financially successful for these studios but these movies ignore the movie viewing preferences of other 85% - 90% of movie goers who are not attracted to these types of films.

The reality that almost all movies that are not “Tentpole” franchises lose money is strong evidence that the other movies that the big studios are making are ignoring the preferences of large segments of the movie gore audience. This is why 90% of movie goers see only 2 movies in theaters on average each year.

The RSL “Tentpole” Alternative RSL believes that all movies should be designed as “Tentpole” franchise profiles that can appeal to very large global audiences. However, it makes no sense to compete with the large studios in the mega-budget, comic book “Superhero” market. Instead, RSL will focus on creating modest budget, high concept films that project strong protagonists who take on terrifyingly plausible scenarios in the modern world. RSL will target the much larger “disaffected” movie gore audiences who want to be intellectually, emotionally and viscerally engaged by compelling, real world characters in scenarios that are relevant to the modern world. This approach avoids the shallow story telling of the comic book movies as well as their costly and gratuitous action, violence and special effects that alienate larger audiences. The 14 RSL films are all designed as “Tentpole” franchises. They all include strong, real world protagonists with exceptional abilities that are grounded in intelligence, determination, courage, resourcefulness and higher awareness. Collectively, these RSL protagonist profiles represent the opportunity to create sustainable “Tentpole” franchises that can compete successfully with the big studio “Tentpole” franchises by offering much more realistic characters in triumph of the human spirit stories in the real world.

20 • Development Most movie studios prefer to focus on distribution and largely rely on third party producers to source and develop their movie content. By contrast, RSL will not fund the projects of third parties and will rely on its advanced screenwriting and development methodologies that match movie concepts, content and resonance elements with very large target market preferences. This is the only approach that can deliver consistently strong market acceptance and profitability because the traditional agency content sources create projects that lose money over 85% of the time. The RSL core development team will include members with a diversity of insights, skill sets and preferences to optimize all RSL screenplays to far above movie industry standards. The focus will be on creating movies that match large global audience preferences rather than faulty movie industry cultural expectations. This will be a very important point of differentiation that will reduce market acceptance risk and help insure profitability on all RSL film projects.

• Production High quality production values are vital to the success of the RSL business plan. However, it is important to note that the movie industry does not have a problem with delivering strong production values in almost all of the films that achieve broad release. The movie industry has a major problem devising movie concepts, characters and content that consistently resonates with very large audiences. Many producers and directors know how to produce strong production values but almost none of them know how to source or develop movie content that matches global viewing preferences. Fortunately, the movie industry is a contracting business with many producers, directors and actors who are capable of delivering strong production values on the RSL movie projects. The $150 million of primary capital will provide RSL with financial leverage to contract with the optimum producer(s), director and talent to match the unique requirements of each project on the best terms possible. Once RSL is well established, it will likely make many of its key producers and directors into employees and shareholders of RSL to further improve production values and manage costs. IMPORTANT: No production funding will be spent by RSL until a detailed project budget with the business, marketing, distribution and risk management plans are approved by the RSL board of directors. This package will also include the final shooting script with the producer(s), director and key casting commitments. In effect, all of these items are conditions precedent to advances from the $150 million primary capital facilities.

RSL will provide very close oversight of all production activities and expenditures.

• Distribution Financially successful filmmaking and investment requires certainty of North American and global distribution. Working through major studios for distribution would infect RSL with the faulty industry culture, dramatically increase costs, adversely affect marketing expenditure productivity and

21 substantially reduce RSL earnings. Therefore, RSL will avoid the major studios for distribution wherever possible and deal directly with the theater chains, sales agents and international distributors. The major theater chains will only deal directly with movie studios that are well capitalized so that they can guaranty certainty of production funding and a minimum of $25 million of marketing and advertising expenses per film to help insure that the movies will attract large audiences to their theaters. International sales agents and distributors want to see a strong North American theatrical release to support their releases and earnings. This reality is another major reason that $150 million of primary capital to support the RSL studio model is necessary to ensure broad global distribution. RSL will have a small but highly experienced distribution team with well established global networks that will endeavor to bypass the major studios and their adverse business practices to interface directly with the international theater chains, sales agents and distributors. RSL may work with major studios in some circumstances but only on terms that are favorable to RSL shareholders.

It is much more capital, cost and ROI effective to hire seasoned distribution professionals with strong networks than to in vest billions in existing studio platforms.

• Advertising & Marketing Earnings effective advertising and marketing (“A&M”) are vital to maximizing market acceptance and the profitability of all RSL projects. Every dollar spent on A&M must create at least 3 dollars of additional gross revenue just to break even. Therefore, it is very important that the A&M budgets be employed in the most earnings effective ways. In general, the movie industry does a very poor job of producing earnings effective A&M. The studios spend a lot of money on A&M but it too often does not produce enough additional net revenue to recoup the A&M costs. This is because the A&M methodologies they employ are not well conceived to reach and inspire very large audiences to view the films. As the distributors, the studios typically manage the A&M process and employ ineffective methodologies to the direct disadvantage of production equity investors. Often the A&M dollars are directed to affiliates of the studio with little concern about the earnings effectiveness of the A&M expenditures because recoupment of the A&M costs has a priority over equity investor pay outs. The studios generally expect to make their profits off of their distribution fees, overhead allocations, soundstage fees and affiliate A&M expenditures rather than from the earnings success of the movies themselves. This is a major conflict of interest by the studios that RSL must avoid to deliver strong earnings and a compelling IPO profile. The RSL studio model will keep the A&M budget and process under the control of RSL and insure that all of the A&M budgets are spent on earnings effective A&M activities. RSL will hire highly experienced A&M team to manage the A&M process and employ effective, digital age methodologies to be certain that expenditures are earnings effective to RSL.

22 • Risk Management As a general rule, movie producers and studios are not in the business of managing costs and risks to maximize the earnings of production equity investors. They are in the business of maximizing their own earnings, often at the expense of the equity investors. Too often, production equity investors are viewed as useful risk mitigation devices for the producers and studios because they are willing to provide most of the equity capital and take most of the downside market acceptance risk of the movies while the producers and studios skim their fees off of the top with minimal risk and much less than transparent accounting practices. By extreme contrast, RSL is an emergent movie studio that is in the business of maximizing risk adjusted ROEs for RSL shareholders. The RSL goal is not just to make movies but to create consistently profitable motion pictures and sustainable film franchises that project a compelling IPO profile by year 5 that can exploit the highly irrational price/earnings multiples above 50x that Lions Gate Entertainment (“LGF”) is currently receiving on the NYSE. The RSL founder and CEO is a career capital markets and risk analyst who has devised the RSL business model, business plan and capital markets strategy to put emphasis on the mitigation of risks in the interest of maximizing the earnings RSL in preparation for the IPO. As a substantial shareholder in RSL, his interests are completely aligned with the RSL equity investors who will collectively benefit from maximizing annual earnings that can receive a 50x+ multiplier value in a successful IPO scenario. It would be irrational for the RSL CEO to skim excess dollars from annual earnings that would earn 50x per dollar in an IPO valuation equation if they are left in RSL. The RSL goal is to generate strong operating cash flow that will enable RSL to return the $50 million of primary equity to the investors by month 30 and thereby eliminate their primary equity risk. The primary equity investors would then be positioned to participate in windfall earnings that could be $5 to $10 billion from a successful IPO in year 5. These risk adjusted ROEs will dwarf any other movie investment scenario.

• Financial Controls & Transparency RSL considers itself to be a financial fiduciary and representative for all RSL investors. As such, RSL’s first priority is to honor and reward the good faith of its investors and safeguard their investments. RSL will employ state of the art financial, accounting, treasury and cost controls and provide full financial transparency to all shareholders. RSL has identified movie industry flaws and capital market anomalies and has created proprietary methodologies to exploit them. The investment goal is convert $50 million of primary equity capital and $100 million of primary debt capital into $5 to $10 billion of IPO proceeds in as little as 5 years. No, this is not promotional hype. It is a plausible reality in search of sophisticated and prescient capital partners who will invest the time to fully understand the scenario. Yes, this is a big vision but it is grounded in profound intrinsic merit and extraordinary wealth creation potential with limited downside risks.

23 Movie Investment Options

No industry has greater risk adjusted ROI potential and worse ROI performance than motion pictures. This reality persists because of a pervasive dearth of financial, market, creative, business, risk management and capital markets sophistication in the movie industry. Almost no one in the movie industry has created comprehensive methodologies that integrate all of these success factors to produce consistently profitable films. This is why 85%+ of movies lose money for equity investors and even fewer produce an appropriate risk adjusted ROI.

In theory, every well conceived movie that is produced with strong production values and skillfully marketed should project to deliver a 100%+ ROI to production equity investors. Therefore, by any rational financial analysis, the over 85% of movies that achieve broad distribution and lose money for equity investors should not have been produced.

There were obvious flaws in almost all of them that indicated they would not make money for the equity investors but they were produced because the producers, directors, talent and agencies made money on almost all of them at the expense of the equity investors.

The uninspiring movie choices in theaters are a recurring reminder that the movie industry does a very poor job of creating movie concepts, characters and content that most people want to see. The industry does a good job of continuously creating movies for the about 15% of people who are attracted to shallow stories with one dimensional characters who are immersed in gratuitous action, violence, depravity, horror and computer generated effects that dominate modern cinema.

This business model can be moderately successful for major studios that are subsidiaries of huge conglomerates that can afford to risk $150 million to $500 million per film and are willing to settle for moderate IRRs. However, direct investment opportunities into these big budget films is very limited and the upside is often lost in non-transparent accounting practices that favor the studios.

Big budget studio films are not a strategy for maximizing risk adjusted ROEs for production equity investors but investing in most independent films is the risk equivalent of a slot machine. You might get very lucky once but you will lose everything if you play the game long enough. Over 12,000 independent films are produced every year but only about 1% achieve the broad distribution that is vital to financial success. No investor who is motivated by profits should invest in independent films because they offer very negative risk adjusted ROEs.

The RSL value proposition is designed to fill the void of investor access to well conceived and cost effective movies in high revenue ceiling genres that target every major demographic for people over 10 years of age. RSL is the only available movie investment scenario that offers positive risk adjusted returns on investment for equity investors

24 Other Industry Investment Alternatives

RSL was founded on the belief that that motion pictures offer the most lucrative risk adjusted return on investment opportunity in the capital markets today. Please consider the following realities that support this assertion:

• Bonds - Historically low interest rates make bonds unattractive. • Public equities - LGF is just one of countless examples that public equity valuations have disconnected from fundamentals and rational valuation analysis grounded in intrinsic values. There are far too many dollars chasing far too few many public equities. The public equity markets are a sensational IPO exploitation opportunity but they are not rational investments at current values. • Real estate - Most commercial real estate ventures do not offer risk adjusted ROEs above 15% and the markets are experiencing another huge overbuilding spree that makes these investments even less attractive. • Oil and gas - Commodity prices have investments have fallen dramatically even as lifting cost continue to increase. Any significant surge in prices will trigger additional supply that will serve as a regulator on equity upside. • Technology - Remains an investment risk minefield with generally uninspiring risk adjusted returns unless you can achieve enough scale for an IPO or attract the attention of major corporate buyers. • Venture Capital & Private Equity – These investments seldom reach IPO size profiles to access the irrational 50x+ price/earnings multiples in the public equity markets. They infrequently achieve risk adjusted ROEs above 10% because competition among investors for “growth” investments is intense. In this context, the creation of a strong motion picture studio IPO profile stands out as the most exciting investment opportunity if maximizing risk adjusted ROEs is the investment goal.

RSL Assets RSL’s primary assets will consist of intellectual property in the form of the RSL 150 page business plan, its proprietary methodologies and the full rights to 14 feature motion picture screenplays that include up to 10 film franchise profiles. The movies will become assets of RSL as they are produced. RSL will not invest in “bricks and mortar” movie studio facilities because they would dilute the risk adjusted ROI of RSL and limit production location flexibility. RSL will lease its corporate facilities on short term leases and contract the production of all of its motion picture projects to top tier execution teams with vast movie production experience in the most cost effective locales.

Minimizing Core Equity Capital At Risk – Maximizing Risk Adjusted ROEs RSL expects that $50 million of the $150 million Primary Capital request amount will represent equity capital at risk after sourcing capital from the “Other Capital Sources” listed above. The actual equity capital at risk will be adjusted based on the ultimate success with international rights presales.

One key goal is to presell the full amount of the production budget of projects in foreign markets after

25 RSL demonstrates strong cinematic and financial performance on its first 2-3 projects. This approach could: • Eliminate equity risk in projects if RSL decides to forego profits in certain international markets. • Cause risk adjusted ROEs and IRRs to skyrocket.

Establishing Financial & Market Credibility The larger $150 million primary capital request is vital to establishing credibility with: • Talent agencies and managers • Producers, directors and key talent • Theater chains – RSL wants to eventually bypass the studios and distributors to insure distribution, retain control of content and advertising and maximize profitability. The ability to fund print and advertising expenses is critical to credibility with the theater chains and achieving financial success. • Attorneys • Distributors • Production partners • Completion guarantors • Banks and mezzanine debt providers • The equity capital markets – especially in the IPO scenario RSL will endeavor to minimize advances under the Primary Capital Facility that will serve as the funding source of last resort to minimize capital at risk for RSL investors.

Action/Thriller/Clandestine Genre Focus

Financially successful filmmaking and investment requires an ability to consistently write and develop cost effective movies that will resonate in very high revenue ceiling genres (unless you are a major studio with unlimited capital to make movies with budgets above $150 million each). RSL will achieve consistent financial success by producing movies with production budgets below $30 million per film in high revenue ceiling genres. It is impossible to accurately predict the revenue performance of individual motion pictures. Therefore, it is important to review the average historical revenue performance of movies in the genre of the film that is being produced to create credible revenue assumptions in financial projections RSL has created the chart on the following page that summarizes all the significant films that achieved broad theatrical release in the action/thriller/clandestine genres since 2006. The “Hunger Games” films have also been included because they are in a similar genre and they feature a strong female protagonist that is a key feature of most of the RSL films.

26 RSL has chosen the action/thriller/clandestine genres for all of its films because, as the chart on the next page demonstrates, these types of films have averaged $429 million in box office and DVD revenues since 2006. The average performance of these 31 films provides a valuable point of reference for setting credible revenue assumptions in the RSL financial projections. The RSL Base Case projection assumes that the RSL films will average 45% of the genre average revenues of $429 million per film but RSL expects its films to reach or exceed the genre average revenues. All of the RSL films have the potential to approach the genre revenue record of $1,205 million that was set by “Skyfall”.

[Intentionally left blank for chart formatting purposes]

27 The chart below summarizes the major films in the RSL target genres since 2006. Superior story content with a multitude of resonance elements will allow reductions of costly action and CGI sequences while preserving strong cinematic appeal.

Movie Global Box Production Prints & Theater Est. Net Distrib Est. To $ Millions Office & DVD Budget Advert. Take Revenues Fees Producer Casino Royale $679 ($102) ($40) ($340) $198 ($51) $147 Mission Impossible 3 $448 ($150) ($60) ($224) $14 ($34) ($20) Bourne Ultimatum $567 ($130) ($50) ($284) $104 ($43) $61 The Kingdom $121 ($73) ($30) ($61) ($43) ($9) ($52) Quantum Solace $646 ($230) ($75) ($323) $18 ($48) ($30) Knight & Day $294 ($117) ($60) ($147) ($30) ($22) ($52) Salt $345 ($130) ($70) ($173) ($28) ($26) ($53) Green Zone $116 ($100) ($50) ($58) ($92) ($9) ($101) The Tourist $301 ($100) ($50) ($151) $1 ($23) ($22) Ides of March $88 ($23) ($20) ($44) $1 ($7) ($6) Mission Impossible 4 $740 ($145) ($70) ($370) $155 ($56) $100 Safe House $245 ($85) ($40) ($123) ($3) ($18) ($21) Act Of Valor $123 ($12) ($10) ($62) $40 ($9) $30 Hunger Games $888 ($80) ($40) ($444) $324 ($67) $257 Skyfall $1,205 ($200) ($75) ($603) $328 ($90) $237 Bourne Legacy $332 ($125) ($60) ($166) ($19) ($25) ($44) Zero Dark 30 $165 ($53) ($30) ($83) ($1) ($12) ($13) Olympus Has Fallen $186 ($70) ($25) ($93) ($2) ($14) ($16) Catching Fire $1,061 ($130) ($50) ($530) $351 ($80) $271 Jack Ryan $132 ($60) ($35) ($66) ($29) ($10) ($39) 3 Days To Kill $32 ($28) ($25) ($16) ($37) ($2) ($39) Mockingjay Part 1 $844 ($125) ($70) ($422) $226 ($63) $164 American Sniper $617 ($58) ($35) ($309) $216 ($46) $169 Mission Impossible 5 $726 ($150) ($70) ($363) $143 ($54) $89 Spectre $912 ($300) ($75) ($456) $81 ($68) $13 Man From Uncle $113 ($75) ($30) ($66) ($49) ($8) ($57) Kingsman $433 ($81) ($35) ($217) $101 ($32) $68 Bridge of Spies $170 ($40) ($25) ($85) $20 ($13) $7 Mockingjay Part 2 $691 ($160) ($75) ($346) $111 ($52) $59 13 Hours - Benghazi $88 ($50) ($20) ($44) ($26) ($7) ($33) London Has Fallen $230 ($60) ($25) ($115) $30 ($17) $13 Totals $13,308 ($3,182) ($1.400) ($6,654) $2,072 ($998) $1,074 Averages $429 ($103) ($45) ($215) $67 ($32) $38 DWF Base Case $192 ($30) ($24) ($96) $42 ($14) $28 As % Genre Avg. 45% (29%) (53%) 63% 80% Average A key success factor for RSL is creating films on 29% of the genre average production budget that can deliver at least 45% of the genre average revenue of $429 million. This goal is attainable through: • Much lower production, general and administrative expenses than the highly inflated studio budgets.

28 • Superior RSL content that includes a multitude of resonance elements that will inspire audiences far beyond the narrow spectrum of shallow story contrivances, one dimensional characters and gratuitous action, violence, stunts and special effects that dominate these genres. The use of terrifyingly plausible/life relevant plot scenarios, strong female protagonists, triumph of the human spirit stories and a broad spectrum of other compelling resonance elements will be key factors in achieving these goals. RSL will also operate on much more cost effective corporate, production, distribution and advertising budgets than the major studios. Extraordinary Return On Investment Profile RSL’s value proposition offers an extraordinary risk adjusted return opportunity for insightful investors who are willing to invest the time to understand the full RSL value proposition. Please consider the following plausible IPO ROI scenario for the initial RSL 11 film slate.

29 A $61,856 million IPO valuation is a highly improbable outcome for RSL but it is based on LGF’s real time 100x+ P/E multiple. It also illustrates it absurdity and the magnitude of the public equity market exploitation opportunity that RSL represents. RSL can deliver a $6 billion IPO windfall if it reaches its $200 million year 4 earnings goal and receives a P/E ratio that is 10% of LGF’s current 100x multiple in year 5. The actual IPO valuation could be much higher than $6 billion given the extreme irrationality of the equity markets. RSL will also project a far superior earnings and corporate profile than LGF in year 5 if it achieves its Base Case assumptions. RSL also will not have LGF’s $2 billion of debt and $268 million of annual G&A expenses. Seven of the above films represent new franchise opportunities. The other four projects are sequels to the primary seven films. RSL has three other completed scripts that are franchise possibilities and multiple additional film concepts in development as new franchises or sequels to the primary seven films. The success of the primary movies in each franchise could alter the sequence and timing of the productions. RSL might also recommend the advancement of other sequels in development in lieu of certain projects above to seize strong market acceptance opportunities on early franchise successes. Project Level ROI Scenarios The chart below summarizes three project level ROI scenarios based on different revenue assumptions as a proportion of the $429 million global box office/DVD revenue average per film in the target genres. (See page 26 above)

Description ($Millions) Base Case Base Case 2 Base Case 3 45% Genre Avg. 50% Genre Avg. Genre Average Revenue Revenue Revenue Box office revenue (gross) $164 $187 $350 + DVD revenue (net) $ 20 $ 25 $ 40 + Ancillary revenue (net) $ 20 $ 24 $ 55 + Government rebates $ 6 $ 6 $ 6 Total Revenue Estimate $210 $242 $451 - Theater takes ($82) ($93) ($175) - Distributor fees ($10) ($ 24) ($ 32) Total Net Revenues $118 $125 $244 - Production budget ($30) ($30) ($30) - P&A budget ($24) ($28) ($47) - RSL Overhead ($ 3) ($ 3) ($ 3) Total Income Estimate $ 61 $64 $164 Multiplied by 70x IPO multiple $4,270 $4,480 $11,480 ROI on $50 million primary equity 85x 90x 270x

30 This chart further illustrates the extreme irrationality of public equity market valuation metrics and the enormity of the RSL equity market exploitation opportunity. The public equity markets value companies off of annual earnings so each of the above numbers can be multiplied by 4 movies per year to simulate annual earnings and valuations.

The ROI for RSL shareholders would be sensational at a 10x valuation multiple so there is an enormous margin for error.

A Comparison of LGF to RSL LGF is the real time template for the RSL capital markets strategy so it is important to compare the relative merits of LGF to RSL from a capital markets perspective. This exercise will also provide a valuable point of reference in support of the RSL business plan and capital market strategy.

http://finance.yahoo.com/q/mh?s=LGF+Major+Holders

The link above demonstrates that LGF is largely owned by 20 institutions and mutual funds. Every one of them would reflexively assert that LGF is a better investment than RSL because LGF is well established and RSL is not. They would refuse to even consider RSL despite the realities below:

• Over 90% of LGF film projects over the last 3 years have lost money for production equity investors. • RSL has far superior methodologies for the writing and development of cost effective and superior movie content that will avoid the poor concepts that LGF embraces and consistently resonate with large global audiences. Close examination of the methodologies and the content will confirm this assertion. • RSL has a far superior slate to LGF if maximizing global market acceptance, earnings success and ROEs are the objectives. • The initial RSL slate includes up to 10 major franchise possibilities so the opportunities to far exceeding the LGF earnings performance are very real. • The risk adjusted ROI potential of RSL equity investments is exponentially higher than LGF which is wildly overvalued at over 100x trailing 12 month earnings. • The RSL IPO strategy offers a natural exit strategy in year 4-5 that would not impair market values. • RSL will spend a small fraction of the $282 million that LGF spent on G&A expenses in 2016 to produce a $34 million pretax loss for the year. • RSL will make 4 superior movies per year with high revenue ceilings and broad global market acceptance potential rather than the 1 successful, 3 okay and 15 poor films that LGF produced and released in 2015 and 2016 to date. • Unlike LGF, RSL will invest nothing in third party production and distribution to release films that fail to resonate with audiences over 95% of the time. • RSL will invest nothing in film libraries, TV productions, third party distribution and other non- feature film investments that are dilutive to RSL's rate of ROI profile. • RSL will not be burdened by the over $2 billion of debt on LGF's balance sheet.

31 • RSL should have up to 10 sustainable film franchises launched by the year 5 vs perhaps 2 minor franchises in the current LGF slate. • RSL expects to post a pretax profit of $206 million in year for vs the $34 million pretax loss that LGF posted in FYE 3/31/16 • The ownership rights to RSL can be acquired for a small fraction of the highly inflated $3.4 billion LGF market cap as of this writing. Given the 1) highly inflated current market value of LGF stock, 2) the end of "The Hunger Games" franchise in late 2015, 3) the absence of other projects to fill the large earnings void beyond FYE 3/31/2016, 4) the huge LGF debt burden, and 5) the sad state of LGF's future slate, the downside risk of an LGF stock investment or hold at current market value is enormous relative to the very limited downside risks of investment in RSL.

• RSL is at the beginning of the primary value creation cycle and RSL has the very real potential to have a much larger market value than LGF in as little as 3 years.

• Unlike LGF, the RSL offers the very real possibility of: • Elimination of downside production risks on new projects after year 2 • Primary equity capital return by the end of year 3 • Up to 30,000% ROEs on primary equity through and IPO or corporate buyout exit by year 4-5. The bottom line on the LGF to RSL comparison is that there are strong reasons to believe that RSL will project a far superior and more valuable public equity market profile than LGF in year 4-5.

The STX Entertainment Template STX Entertainment (“STX”) is a new movie studio that has emerged over the last 3 years. Supported by TPG Capital, STX has raised over $1 billion of capital to fund the new studio and has leveraged that capital to assemble an executive team and create direct relationships with the major theater chains, sales agents and international distributors. STX is a useful point of reference for RSL because it demonstrates the feasibility of capitalizing a new studio and launching a new studio. It is also useful because it highlights the superiority of RSL’s approach to movie content origination, evaluation and screenwriting. These comparisons are very important so please visit Exhibit #2 beginning on page 157 for a full analysis of STX relative to RSL.

Understanding the Movie Market Size & Proportions The movie “Avatar” in 2009 is a useful point of reference for the known size of the global movie market for a single film because it set the domestic and global box records for motion pictures:

32 Estimated (Millions) Revenues *Est. Tickets/DVDs Market Size Avatar as % USA/Canada $ 761 95 321 30% International $2,023 252 749** 34% Global $2,784 347 1,070 32% DVDs – Global $ 349 29 1,070 3% Total Box Office + DVDs – Global $3,133 376 *Note: Assumes average $8 per ticket & $12 per DVD - ** Estimate on MPAA 70% of global market The following key observations can be made from this data: • Superior content drives superior revenue results but even the best movie performer of all time only reached about one third of the global audience. • Even the best movies are achieving less than 10% market penetration on average in North America which is only 27% of the “Avatar” market standard. • Movies that do not appeal to global audiences ignore 70% of revenue potential. Presales on the international market and cover substantial portions of the production and advertising costs. • Clearly there is a huge opportunity to achieve greater market penetration with superior content.

RSL was founded in the self-evident belief that there is an enormous "disaffected" audience of potential movie goers who would like to go to movies a lot more often and are mystified by "Hollywood's" consistent inability to make films that inspire their interest. This assertion is supported by the personal experience of anyone reading this document.

The RSL Movie Project Inventory RSL has employed its advanced content evaluation metrics and proprietary screenwriting methodologies to create an initial inventory of 14 movie screenplays that will launch up to 10 sustainable film franchises that will serve as a strong cinematic and earnings foundation for the new studio. Brief summaries can be found at the link below to the RSL website: http://www.renaissancestudio.org/movie-projects.html All of these scripts skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum international demographics to insure strong and consistent market acceptance and earnings. Every RSL film can be produced on a budget of less than $30 million to compete successfully in genres that averaged $429 million in box office and DVD revenues since 2006. Other ancillary revenues from rights sales, VOD, streaming, TV, cable and satellite distribution would increase the average revenues to near $500 million per film with a genre revenue ceiling per film above $1.2 billion.

Creating modest budget movies and sustainable film franchises that compete successfully in very high revenue average and ceiling genres are the vital keys to maximizing risk adjusted ROEs for RSL investors.

33 The RSL films are thought provoking, triumph of the human spirit stories that feature sensational and multidimensional protagonists who overcome the greatest challenges of the modern age to entertain, inspire, inform and help light a path to a much better world. The RSL Franchise Inventory The successful creation and launch of sustainable film franchises is vital to producing strong and consistent earnings that will drive a compelling IPO profile in year 5 that will deliver a multibillion dollar windfall to RSL equity investors. Below is a summary of the initial 10 franchise profile that are included in the 14 primary RSL screenplay inventory. 1. Arielle Denovo - A fully written trilogy that launches the ultimate, multidimensional, young adult female "super hero" type character who uses her sensational mind and a mastery of artistry in all things to help the world to avoid dystopia rather than survive it. She engages in plausible real world scenarios rather than the pure contrivances that dominate these genres. 2. Michelle Burns - A fully written trilogy that launches a female "James Bond" type character who resolves terrifyingly plausible scenarios rather than the shallow contrivances that dominate the genre. 3. Geoff Donahue - A new male and female clandestine team who makes James Bond. Ethan Hunt and Jason Bourne look silly by comparison. The first two scripts are written. 4. Julia Sharinsky - The ultimate cross adversarial culture love conquers all story in a "Dances With Wolves"/ "Avatar" type scenario set in the late USSR. The first two scripts are written. 5. Jonathan Powell - "Lifestyles of the rich and famous" meets "Pretty Woman" and an ISIS type organization that is terrorizing and extorting the most wealthy family on earth. 6. Michael - A Christ like figure appears in the modern world on a mission to save humanity from itself. 7. Doug Winslow - A 9/11 twin towers survivor become a war hero with PTSD caught in the web of a ruthless criminal mastermind who is above the law. 8. Donavan Treadwell - A Medal of Honor winner becomes the target of the military industrial complex and responds by teaming with an aging clandestine warrior and a fearless and resourceful young Afghan girl to trigger an American reformation. 9. Monique Dubois - A Riviera nightclub singer kills members of a ruthless Mediterranean crime family in self defense and must take them all down to survive. 10. Marie Rouseau - A beautiful French detective squares off against modern Gabriel who is on a mission to deliver a terrifying warning to humanity as it spins toward a nuclear holocaust. Collectively, the above RSL franchise inventory compares very favorably to the future LGF slate or any other movie studio or major producer if the goal is to inspire broad spectrum international demographics and maximize ROEs for production equity investors.

Summary The pervasive inclination of movie investors is to rely on movie industry professionals with long track records to create premium movie content is an almost certain formula for losing money on over 85% of

34 movie projects. A careful review of the career financial performance of movie industry executives, producers, directors and “A List” talents will reveal very few people who have achieved career to date financial success for equity investors. They are almost all engaged in making movies to make money for themselves rather than rewarding investors for their good faith and the risks they take. The industry culture views investors as opportunities for financial exploitation and risk mitigation for themselves. The RSL filmmaking and investment vision exists outside conventional film finance parameters but it offers extraordinary risk adjusted ROI potential through public market multipliers of up to 300x+ annual earnings. All of the assertions in this summary can be validated with objective supporting evidence and full consideration of the full 160+ page RSL business plan, its supporting research and analysis, the RSL budgets and the project content in relation to its competitors and global market acceptance potential. The RSL vision is not an abstraction. It is a very real scenario grounded in profound intrinsic merit that is in search of visionary capital partners to help make it a reality. The end game is extraordinary wealth for all those who embrace and support the RSL vision. RSL is also an opportunity to be part of using movies to project a positive alternative narrative to the shallow story contrivances and gratuitous violence, action, sexuality, horror, amorality and depravity that dominate modern media and motion pictures. RSL is not an idea in search of premium movie content. RSL has employed its proprietary content origination methodologies to create an initial slate of 14 movie screenplays that are designed to launch up to 10 major film franchises. An additional 6 projects are in the concept and writing stages. RSL will produce and release 4 modest budget films per year in high revenue genres with a goal of $206 million of pretax income in year 4. If that plausible goal is achieved and P/E multiples remain near their current 30x to 300x levels, RSL should be able to deliver over $10 to $15 billion of IPO proceeds on the initial equity investment of $50 million. RSL represents the most cost effective and lucrative investment opportunity in the motion picture industry with the greatest risk adjusted ROI potential. Yes, RSL is a “start up” but acquisitions of established studios or major producers at current, highly inflated earnings multiples in the equity markets would severely limit ROEs. They would also rely on deeply flawed “Hollywood” story development and business practices that lose money for equity investors over 85% of the time. A “start up” scenario that is grounded in superior business practices and content origination methodologies that create cost effective and sustainable film franchises in high revenue genres is the best path to realizing the exponentially greater ROEs that only an IPO can provide. Any movie investment that does not include a plausible IPO end game is leaving over 95% of potential earnings on the table. By extreme contrast to its industry competitors, RSL has invested a large amount of time in the development of proprietary content evaluation metrics, story development methodologies and risk management strategies that will set the stage for consistently profitable filmmaking and a highly lucrative IPO end game for RSL investors. RSL will be led by capital markets and movie industry professionals with long term experience and a laser focus on delivering superior ROEs to global movie audiences and RSL investors.

Business Plan Overview

Renaissance Studios, Ltd. (“RSL”) is the corporate platform for the creation of a fully integrated motion picture production and global distribution enterprise. RSL has developed a proprietary system of filmmaking, distribution, advertising, investment and business practices to deliver superior risk adjusted returns on investment (“ROEs”) to RSL shareholders. The mission is to create a new audience and investor focused paradigm of filmmaking and investment. Please consider the following key points:

• RSL is not attempting to fund single movies or a slate of films by conventional industry means. RSL is raising primary capital to finance a going concern studio that is designed to create a compelling initial public offering (“IPO”) profile that will deliver extraordinary ROEs to RSL investors. • RSL will not pursue studio or independent film sourcing, development, packaging and financing practices that produce poor financial outcomes and ignore capital markets exploitation opportunities. • RSL does not acquire film projects from traditional industry sources. RSL writes and develops all of its commercially viable film projects to match its filmmaking, business and capital markets vision. This enables RSL to bypass the flawed story sourcing and development practices of “Hollywood”. • RSL is laser focused on originating superior story content that will resonate with broad demographics and large global audiences that are key to achieving superior ROEs for RSL investors. • RSL will not rely on studios or other distributors for North American theatrical distribution and advertising. RSL will establish direct distribution relationships with the major theater chains. This is the only means to maximize profitability and optimize advertising cost effectiveness. • RSL will mitigate downside project risks through soft money capital sources, international presales and sophisticated proprietary methodologies that minimize risk factors and project costs. • RSL will maximize risk adjusted ROEs for investors through:

• Superior content that drives global audience resonance without costly visual effects and action • Proprietary methodologies that create superior film content that drives sustainable film franchises • Minimization of capital at risk and downside risks through cost free capital sources • Dramatically lower studio overhead costs and avoidance of union labor premiums • Self-distribution that bypasses exorbitant distributor fees and permits earnings effective advertising • Creation of a compelling going concern profile that drives a successful IPO

RSL has conducted extensive financial and market research on the motion picture industry. This includes historical financial performance summaries on the movie projects of the major studios, producers, directors and “A List” acting talent. RSL has objectively evaluated the profiles and financial performance of all movies released in North America since 2000 that achieved $30 million in box office revenues. This research has revealed that no industry has greater ROI potential or worse ROI performance than the

36 movie industry. This perverse reality exists because of a pervasive disconnect between the creative and business practices of the industry and the cinematic and financial success factors of the movie markets.

The $150 million primary capital that RSL raises will launch a self-sustaining going concern with full capital recovery expected in year 3-4. An IPO in year 4-5 that will deliver ROEs that dwarf returns of conventional film investments.

Superior rates of return will be achieved by exploiting film and capital market opportunities.

“Hollywood” does not make a lot of movies that a lot of people want to see

There is overwhelming evidence of a huge disparity between the films that the “Hollywood” culture wants to produce and the movies that large international audiences want to see. You have to look no further than the current movie listings to find strong validation of this assertion on a personal level. RSL asserts that this unusual market circumstance represents an extraordinary business and investment opportunity for insightful business professionals and investors who are not burdened by fealty to the flawed movie industry status quo and who are determined to exploit it to realize extraordinary ROEs.

The “Hollywood” studio system is based on 20% “tent pole” pictures (e.g., Avatar, Godzilla) that subsidize the other 80% of films in their slate that satisfy studio executive and/or stars/director’s power, egos and preferences. The RSL strategy is to write and develop its own films that avoid these poorly conceived “vanity” projects and match the preferences of large global audiences.

The major studios have reduced the number of films they release to focus on “Tentpole” – large budget movies at a time when the number of international theater screens is expanding. This has created a major content problem for theater chains and represents an opportunity for RSL to help fill the void.

Most of “Hollywood” is caught in the web of obsolete conventional wisdom

Shallow and implausible “Hollywood” story contrivances and characters with repetitive action/effects do not inspire 85% of global audiences. By contrast, RSL will produce story, issue and character driven movies set in the modern age. They will project positive alternative narratives to the gratuitous violence, sexuality, horror, action and depravity that dominate modern cinema. These compelling films are crafted to resonate on intellectual, emotional, sensual, social, visceral, visual, artistic, romantic and dramatic levels to drive large international movie attendance.

The current studio and “Indie” systems are designed to exploit investors

Typical motion pictures investments are plagued by business and financial practices that are designed to exploit investors rather than reward them for the risks they take. At the root of this reality is a disparity between self-serving internal studio bookkeeping and the external accounting that is presented to investors. This results in outside investors taking the much larger capital risk of loss while at the same time giving the studios the larger share of financial rewards for the films that succeed. By contrast, RSL is dedicated to exceeding investor ROI expectations and will provide full financial transparency.

37 Movies should light the path to a better world

Almost all humans share a common desire to live in peace, liberty and prosperity but the world is immersed in economic stagnation, political strife and social decay. RSL asserts that movies are a powerful medium to effect positive social, economic and political change and that engaging the most important issues of the modern age in productive and non-partisan ways is a path to consistent financial success in filmmaking. RSL films will resonate with people of all ages and cultures who value positive insights in a difficult world. All RSL films will be triumph of the human spirit stories that inspire and illuminate as they entertain.

The creative and business methodologies of the “Hollywood” system are deeply flawed

The story development, risk management, marketing, distribution and business practices of the existing movie industry are systemically flawed in ways that make it very difficult to generate consistent ROEs on movie projects. This assertion is supported by the following realities:

• The self-evident poor quality of modern films that seldom inspire large audiences to go to the theater. • Over 85% of movie projects fail to deliver a ROI to investors. • The infrequent financial successes of producers are anomalies rather than the product of well conceived story sourcing, development and market research methodologies. • Past financial success is seldom an indicator of future performance in filmmaking. • No major producer has a consistent financial success track record other than James Cameron and Peter Jackson when they also direct. • Generally, the major money making movies are a few franchises that are locked up by studios and “one off” projects by independent producers that occasionally succeed.

RSL would not advise anyone to invest in existing major studio or “Indie” structured projects.

Given the above realities, it is necessary for RSL to:

• Highlight the many flaws in the existing industry culture and processes • Articulate a compelling alternative business plan and methodologies • Project a filmmaking and capital markets vision that will deliver consistently superior ROEs

This is a large undertaking because of the enormity and diversity of problems within the current film industry and the intensity of commitment to the failed status quo by industry professionals. This reality makes this business plan substantially longer than a conventional movie industry project plan that embraces the status quo and/or focuses on a single movie project or slate.

RSL encourages you to invest the time to read the entire plan so that you can fully grasp and value RSL’s alternative filmmaking and investment vision. It will be a productive investment of your time if life changing wealth is among your ambitions.

38 The RSL Business Strategy

RSL is grounded in a comprehensive and innovative 162 page business plan that is designed to exploit the systemic defects in the motion picture industry and the capital markets to deliver very extraordinary risk adjusted ROEs to RSL investors. The RSL strategy is to: • Obtain primary capital funding commitments of $150 million • Assemble a highly professional executive team to execute the RSL business and capital markets plan • Create a fully integrated film production and global sales, marketing, distribution company • Employ proprietary story creation methodologies that skillfully match resonance elements with large global audience preferences • Produce and distribute the initial RSL slate of 11 films that are designed to launch up to eight major film franchises over 4 years • Achieve global cinematic success • Demonstrate strong and consistent earnings performance • Pursue an IPO to access the near 100x to 300x+ P/E ratios that Lions Gate Entertainment (“LGF”) and Netflix (“NFLX”) are currently enjoying • Return the primary capital investment to investors by month 30 • Become the preferred film investment alternative in the global capital markets • Establish a new epicenter of filmmaking and investment outside the obsolete “Hollywood” paradigm No film project or slate investment can hope to achieve the ROEs that become available through the creation of a successful IPO profile that can access the near 100x to 300x+ price/earnings ratios in the public equity markets. Almost no large movie producer has a strong enough earnings and franchise profile to successfully pursue an IPO. Accordingly, RSL is laser focused on creating a successful cinematic, franchise and earnings profile that will permit an IPO in year four-five. RSL will be a low-overhead operation with a strong emphasis on superior content quality, key production attachments and producing content in economically advantageous venues. Heavily bloated overhead costs are a common theme among all “Hollywood” studios because they seek to exploit investors rather than reward them. By contrast, RSL is overhead averse. Only essential core competencies will be maintained within RSL itself. All facilities will be leased in cost effective venues. Talent and labor will be often contracted rather than employed in the interest of cost effectiveness. RSL will draw on outsourcing to provide fungible services, best-in-class vendors and access to specialized functions that are most likely to experience rapid change or obsolescence. RSL will effect economies of scale, seeking cost-efficiencies in its production and marketing activities without legacy encumbrances, massive commitments to expensive sound stages/facilities or special effects resources that are vulnerable to obsolescence. RSL will operate in locations where the unionized bureaucracies / fringe benefits and labor costs/issues that plague production costs in the rest of the industry can be avoided. RSL expects its streamlined operational structure to be lean and nimble, able to

39 access the best economic venues for production, and flexible enough to exploit ever changing local and International rebates /tax incentives /subsidies. Important Process Notes

• An escrow agent will be employed to oversee advances on the Primary Capital Facility under a budget and execution team to be approved by the investors in advance. • The RSL Board of Directors must sign off on each film project business plan before funding can be released by the escrow agent for draw requests by RSL. • Prior to commencement of principal photography for each film project, RSL will generate foreign presales in certain smaller territories e.g., Eastern Europe, South America–Brazil, Australia, New Zealand etc. This will 1) generate deposits and presales advances, 2) facilitate bankable sales estimates /advances for the remaining foreign territories and 3) validate market acceptance. • RSL will exploit all available government rebates, subsidies and or tax incentives and brand integration revenues (“Soft Money”). These revenues go can go straight to investment recoupment up to 50% (or more depending upon the amount of brand integration opportunities written into the screenplay) of the total production budget amount. When combined with foreign pre-sales and sales estimate advances (as above), it can provide project underwriting and production cash flows or recoupment of up to 100% of the production budget with major international territories and the North American distribution market still not exploited. • While profitable studio buyouts of projects that meet RSL’s ROI targets would be considered, RSL intends to manage worldwide sales / marketing and distribution outside the studio system (for example RSL in-house release direct to the theatres in north America) to dramatically reduce costs and improve risk adjusted ROEs. • RSL will employ top producer, director, line producer, heads of departments, and first rate “below- the-line” crews to execute its film productions. • All RSL productions will have standard industry production insurance including but not limited to a Completion Bond that will guarantee the production will be completed on time and on budget. • While certain exceptions may arise based on individual project potential, RSL's films are designed to be produced on budgets of not more than $30 million and to appeal to large global audiences. RSL will be highly focused on minimizing costs and risks at all levels while maximizing international revenue potential. The investment goal is a 2-3 year return of capital to investors with a minimum 100% ROI at the project level. These returns would be exponentially enhanced by a successful IPO that is a major RSL objective.

Key RSL Investment Process Elements and Financial Controls Common practice in the movie industry is for a studio or producer to 1) acquire and develop a screenplay and budget, 2) attach a director and lead acting talent and 3) secure financing. This ineffectual process produces the poor product offerings that we see in theaters and losses for production equity over 85% of the time.

By contrast, RSL will: • Secure commitments for the $150 million of primary capital to establish strong credibility and negotiating leverage to obtain the best talent and services on the best possible terms. • Assemble an exceptional executive team for approval by the RSL board of directors. • Secure a $10 million seed funding advance from the $150 million primary capital facility to establish studio operations, hire key employees and optimize the screenplays with an advanced core development team. • Aggressively develop direct relationships with major theater chains, sales agents and international distributors to insure broad global distribution for all RSL movie projects. • Complete the scripts, the business plan, the marketing plan, the distribution plan and the budgets for each film project. • Recommend the ideal project producer(s), director, talent and casting for each project. • Obtain RSL board of directors approval for each project to proceed into production.

No production funds will be expended until each project plan is approved by the RSL board of directors that will be controlled by the RSL equity investors

RSL could assemble an executive execution team at this time but it would consist of fourth quartile executives with poor performance track records because the first quartile executives are all employed. The best professionals cannot be induced to leave their existing positions until primary capital is in place.

Accordingly, RSL will defer the nomination of RSL executives until after a primary capital commitment is in place. It is important to note that funding under the primary capital commitment will be subject to approval of the executive team by the RSL board of directors and other conditions precedent that are included in the process below: • RSL will secure a primary capital commitment and assemble a top tier executive, production and distribution team for approval by the RSL Board of Directors. • Upon approval of the execution team and the corporate budget, seed funds of $10 million would be advanced from the Escrow Account to RSL’s “Operating Account”. • Going forward, RSL would prepare draw requests that would be tied to specific performance requirements in the budget for review and approval by the Escrow Agent as each project moves forward. This would operate much like a real estate construction project. • The RSL team will create the preliminary business, marketing, advertising and distribution plans and budgets for each film project with a commitment letter from the Completion Bond Company for submission to the RSL board of directors for approval. • Upon approval, pre-production funds per project would be released into the RSL Operating Account. • Upon completion of pre-production for each project, RSL submits the final production, distribution

41 and advertising plan and budgets for RSL board of directors approval. • Advances to the “Film Production Accounts” would be made under draw requests tied to the project budget requirements.

This approach is much more rational than relying on “Hollywood” producers that have poor earnings track records, are conditioned to exploit investors and are committed to flawed “Hollywood” story development and business practices that do not consistently produce superior ROEs for investors. It also insures that investor interests remain the top priority.

Base Case Financial Projection Assumptions

RSL expects to become self-sustaining on cash flow if the first 5 films meet Base Case expectations so additional projects could be produced without additional capital. Below is a summary of the Base Case ROI and capital recovery profile if the films are produced on 29% of the genre average production budgets and reach 45% of the genre average revenue of $429 million.

The production budgets of 29% of the genre average are realistic because RSL’s superior story development methodologies and business practices will produce films that will appeal to large international audiences without incurring: • Highly inflated costs for studio corporate and other overhead allocations. • Huge costs for unproductive special effects. RSL films will be driven by powerful story elements and characters rather than costly computer generated effects and gratuitous action sequences. • “A List” “Star” salaries. These will be avoided by focusing on emerging talent and where possible “favored nations” deals based on “indie rates” with “Back End” bonuses tied to the film’s financial performance. • The Base Case assumes only 45% of the genre average revenues as an offset to the lower budgets. RSL does not have to achieve the genre average to deliver superior ROEs but enormous ROEs are possible if RSL films reach or exceed the genre average of $429 million per film. Ten of the fourteen RSL projects have strong franchise potential and the other four are sequels to the lead franchises. If any one of the projects exceeds the genre average revenues, the Base Case income assumptions would be dwarfed by actual income. Obviously, there can be no certainty of box office outcomes but the Base Case is reasonable and the other scenarios are plausible. Exposing Movie Investment Mythology

It is important to understand the realities and flaws of the prevailing movie investment system in order to grasp the value of the RSL alternative. The conventional wisdom in almost all current movie investment scenarios is as follows:

• Screenplays must be obtained from writers who have written previously produced scripts. • Scripts based on successful books are a good source of profitable movie concepts. • Attachment of a producer and director who have made major movies is vital to movie success.

42 • “A List” acting talent is vital to distribution and making money on film projects. • Movies should be “packaged” with all the major talent in place before financing is secured.

In truth, all of the above all of the above are objectively false from a financial perspective:

• Produced screenwriters write to meet studio/producer expectations rather than audience preferences. • Produced screenwriters are seldom focused on creating films that will be commercially successful. • The career movie project earnings of screenwriters are almost always negative by a wide margin. • In the aggregate, movies based on books are not more financially successful than original scripts. • The career movie project earnings of movie producers, director and “A List” acting talent are almost always negative by a wide margin. • “Packaging” alone, is a very poor method for assessing the financial potential of a film project. • “Packaging” limits the ability to secure the best execution team and acting talent to maximize ROEs. • Producers, directors and actors are terrible judges of the cinematic and ROI potential of film projects. • There is a negative correlation between “A List” talent and ROI success. • The net revenue premium for “A List” talent almost never recovers the cost of their inflated salaries. • There is no positive correlation between the ability to produce a film with strong production values and the ability to correctly assess its cinematic and ROI potential. The skill sets are very different. • Producers, directors and actors all have conflicts of interest with maximizing ROEs for investors.

The above assertions are supported by financial summaries that RSL has created on the movie projects of major production companies, producers, directors and “A List” actors. These summaries confirm that major movie producers, directors and actors have made huge amounts of money for themselves by exploiting naïve investors who focus on their filmographies rather than the financial results of their filmographies.

These people are experts in creating cinematic and financial illusions that are designed to get investors to play the “Hollywood” investment game that rewards them at investor expense.

RSL asserts that a far superior investment approach is the following:

• Devise a digital age business model for a virtual movie studio that avoids the pitfalls of the movie industry and exploits its vulnerabilities. • Create a superior filmmaking and investment vision grounded in a professional business plan. • Develop sound metrics for evaluating the market acceptance and ROI potential of film projects. • Develop advanced screenwriting methodologies that skillfully match a compelling diversity of resonance elements with the viewing preferences of broad spectrum international demographics. • Employ the metrics and methodologies to write and develop films that match the business vision and project evaluation criteria. • Raise primary capital in support of the ROI focused filmmaking and investment vision and to create a going concern movie studio that can exploit irrational public equity market valuation metrics.

43 • Elect a professional board of directors to objectively evaluate and approve the film projects. • Contract the optimum production and acting talent to execute the corporate and project visions.

There are countless producers, directors and actors who can execute well conceived movies with superior production values. There is overwhelming financial evidence that “Hollywood” producers, directors and actors are extremely poor judges of the cinematic and commercial value of film projects. They almost always choose their personal artistic preferences rather than the preferences of large international audiences and they get paid whether or not the films make money for investors.

RSL will not be approaching any industry producers to finance their projects because they do not meet RSL standards for content quality, large market resonance or financial performance. There is no reliable source for superior film content at any of the agencies or producers or studios if consistently superior ROEs are the objective. Almost all screenwriters are conditioned to writing to meet studio or "Indie" producer requirements that are creating the multitudes of consistently poor films that seldom resonate with large international audiences and almost never produce superior ROEs for investors. The RSL approach is far superior if the objective is to maximize ROEs for audiences and investors. RSL Intellectual Property

RSL owns the full rights to 14 feature screenplays and has another six projects in the writing process. All of these scripts are crafted to match the RSL vision of modest budget films that will attract large global audiences with stories that transcend cultural and demographic differences. These projects represent a sound foundation for launching a fully integrated movie production and global distribution company. They also eliminate the need to source film projects and provide transparency to investors upfront.

RSL does not have to rely in industry sources and flawed methodologies for project concepts.

This initial slate includes up to ten film franchise profiles that will diversify investment risk and create the foundation for a successful movie studio and IPO. The success of one or two of these franchises should position RSL to pursue an IPO that could deliver ROEs that would be many multiples of the $150 million capital investment. The success of most of the franchises would deliver very extraordinary ROEs.

The RSL slate and business plan required many years of man hours to write and develop. Ideally, a successful IPO profile should include a demonstrated ability to originate new major film franchises that create sustainable annual earnings that are the focus of IPO investors. Why Do So Many Movies Lose Money? The large amount of RSL’s financial research on the movie industry indicates that 85% of movies that reach significant theatrical distribution lose money for equity investors. Losses are even worse for the 90%+ of "indie" films that do not achieve broad theatrical distribution. Most movies consistently lose money for the following reasons:

44 • The story concepts and resonance elements do not match the viewing preferences of broad demographics and very large international audiences. This results in "low revenue ceilings" that increase the risk of loss while limiting the earnings upside of success. • The stories fail to engage large audiences with a multitude of resonance elements: Intellectual, visceral, emotional, intimate, life relevant, though provoking, sensual, audio, artistry, poignancy. • The stories turn off large audiences segments: Gratuitous action, violence, depravity, foul language, gore, horror, sex or abuse as well as shallow/repetitive stories, action, explosions, gunfire and sci- fi/CGI/other special effects. • They rely on "A list" talent attachments rather than superior story content and characters that resonate with large global audiences. • They ignore the preferences of the great "disaffected" audiences who make up the 90% of potential audiences who see only 2 films on average in theaters each year. • There is a mismatch between the size of the project production/P&A budget and the size of the potential market.

Given all of the above, RSL has invested a vast amount of time and resources developing proprietary story writing and development methodologies that create cost effective film projects that matches story content with the preferences of broad domestic demographics and very large international audiences. This is the vital core of the RSL value proposition that will minimize downside risks and preserve very large international revenue upside that is vital to sustainable profitability.

These methodologies are not abstractions. They are the valuable product of extensive R&D that was structured to match content with large global audience preferences.

The RSL Value Added Proposition RSL is designed to provide movie content origination, management oversight and financial fiduciary services for sophisticated investors who are attracted to the potential for superior risk adjusted ROEs on movie investments but rightfully have no confidence in the story development and business practices of the industry. RSL offers the following key valued added elements to the film investment equation:

• A sophisticated business investment and capital markets approach to exploiting the movie industry. • An incremental investment approach that allows investors to approve the film execution team and profile before funding of each project. • ROI focused oversight of all elements of the development, production & distribution processes. • Laser focus on cost and risk management as well as global revenue and investor ROI maximization. • Complete transparency on all budgets, business plans and financial reporting. • Circumvention of the flawed story development and business practices in the movie industry. • A strong determination to reward investors for the risks they take rather than exploit them. • A commitment to creating films that inspire large global audiences and reward insightful investors. • Far superior story sourcing and development methodologies that are driven by audience preferences.

45 • A focus on creating positive points of differentiation from the film industry status quo on all levels. • Targeting of the huge disaffected audiences that drive superior ROEs. • Offer a sound film investment scenario that consistently delivers superior risk adjusted ROEs. • 14 cost effective screenplays that include ten major film franchise opportunities in five different genres and match the RSL vision of cost effective movies that inspire large global audiences. The last item above is the most important because it is the key to unlocking superior ROEs for RSL investors. RSL encourages investors to compare the RSL slate to the current movies in theaters and the slates of any movie studio on Imdb to grasp the power of the RSL alternative slate. The RSL Execution Profile While the RSL profile has the potential to become the most compelling business model in the movie industry from a risk adjusted ROI perspective, it is outside the mainstream of the studio and "Indie" paradigms. RSL believes this is a very good thing for investors but it may be outside their comfort zones because RSL does not have an established film industry track record or a full execution team in place. This is a significant issue but top executives and talent will not invest their time on projects that are not fully funded. This issue will be addressed by securing financing commitments under the $150 million Primary Capital Facility that will enable the engagement of top quartile executives, directors, line producers and acting talent. RSL will control production management, engage skilled producers and may co-produce with top domestic or international co-production teams in accordance with the RSL business plan. This approach is far more effectual than investing in film production companies that consistently lose money for investors because they are largely committed to a flawed “Hollywood” story development and business practices. Even the best producers are too often bogged down in poor story development and business practices and a mindset that investors should be exploited rather than rewarded. RSL’s business plan solves all of these issues and opens an avenue for investors to realize superior risk adjusted ROEs. These are not promotional assertions. They are a realistic business vision in search of insightful investors to make it a reality. The RSL execution teams will be assembled to 1) execute the RSL vision, 2) match the unique requirements of each project, and 3) ensure quality project completion on time and on budget with effective theatrical and ancillary distribution supported by earnings effective advertising and marketing. An independent escrow fiduciary will provide budget oversight, safeguard investor interests, and provide full financial accounting and transparency. Completion bond insurance will be in place to protect investor interests and ensure effective and timely project execution. The RSL approach allows the assembly of the best human resources to execute the RSL vision to the direct benefit of RSL investors. The RSL board of directors must approve all executive hires, corporate budgets and project budgets/plans in advance.

RSL Leadership

RSL is led by a seasoned capital markets professional with over 30 years of total experience in the capital

46 markets. [Please see his professional summary on Exhibit #1]. His experience includes extensive risk, credit, business and market analysis in most major industries through multiple economic, political, business, industry and capital market cycles. This broad spectrum knowledge and experience is a sound foundation for evaluating motion pictures in the context of the capital markets and other industries and devising the means to exploit it to to earn exceptional ROEs. Unlike his movie industry peers, he owes allegiance to movie audiences and RSL investors rather than the flawed culture and business practices of “Hollywood”. His collective experience is the source of a compelling new vision of filmmaking and investment that is grounded in sound intrinsic merit and business practices as well as a compelling capital markets plan. RSL intends to source the $150 million of primary capital to launch the new studio and produce its initial eleven film slate. The optimum executives, filmmaking and distribution team will then be assembled to execute the RSL vision and business plans. This is the only approach that will insure the successful execution of the RSL business and project plans without compromises to the failed industry status quo that would reduce ROEs. RSL has the skills and networks to access the top creative/production talent - actors, writers, directors and producers – and industry leading sales, marketing, distribution relationships and resources - worldwide. RSL will employ industry professionals with extensive experience who will oversee certain aspects of the operations of RSL. Their employment has been deferred to allow the raising of capital levels that would attract top talents who are committed to the execution of the RSL vision and business plan. The RSL board of directors will approve all of their employment and project plans. There are a lot of film producers in “Hollywood” who have made a lot of money for themselves but extremely few who have made a lot of money for independent investors. There is a huge difference between making a lot of movies and making a lot of money for investors. There are countless producers who can make a movie with good production values. There are extremely few who can write, source and develop movie concepts that can be produced on modest budgets and resonate with very large international audiences. Therefore, RSL is focused on originating superior content and contracting with top quartile directors to produce the films with strong production values. The availability of the Primary Capital Facility will provide RSL with the negotiating leverage to retain the most cost effective production teams and talent to achieve superior production values and ROEs for RSL investors.

Keys Success Elements Please consider the following key success elements for RSL: • Market & Financial Research RSL has invested a huge amount of time in the financial and market analysis of the motion picture industry. RSL has evaluated all of the major studios, producers, directors and “A list” talent from a

47 financial performance perspective over the last ten years. RSL has evaluated every movie released in the RSL genres over the last ten years that achieved over $30 million of North American box office revenues. This research has revealed the keys to broad market acceptance of movies and consistent financial success in motion picture production and distribution. This data drives the RSL story development and risk management methodologies as well as its business and capital markets plans.

• Independent Financial Oversight & Transparency RSL provides independent financial oversight and transparency to investors and is laser focused on delivering superior ROEs to global audiences and RSL investors.

• Low Barriers to Market Entry The barriers to market entry and acceptance in motion picture industry are very low relative to other industries. The only major limitation on movie market demand is the quality of market supply. 90% of the potential movie audience in North America saw only two films on average in theaters in 2013. This poor attendance track record did not occur because people did not want to go to the theater. It occurred because the movie industry consistently produces films that do not inspire a lot of people to go to the theater. This self evident reality likely resonates with those who are reading this document.

• Competitor Vulnerabilities There is no industry that offers more extraordinary ROI potential or worse ROI performance than motion pictures. This reality exists because there is no industry where there is a bigger disconnect between what producers create and what consumers prefer. Everyone is familiar with the recurring experience of wanting to go to a movie, searching the movie listings and finding nothing that inspires them to go to the theater. Almost everyone is amazed by the consistently poor content quality of the movies that "Hollywood" produces. These realities represent a very lucrative market exploitation opportunity.

• Superior Movies The only major impediment to financial success in motion pictures is the ability to create cost effective movie content that will resonate with large global audiences. Superior content is not a random event and it does not magically arise from the imagination of screenwriters. It is the end product of sophisticated and common sense methodologies that match story elements with large audience preferences. Accordingly, RSL has developed proprietary story development methodologies that consistently create modest budget movies that are imbued with powerful resonance elements that will inspire large global audience attendance. These elements are crafted to engage audiences on intellectual, emotional, sensual, visceral, audio, romantic, intimate, artistry and visual levels in profound, poignant and entertaining ways that are largely ignored by "Hollywood".

48 RSL’s methodologies are not theories in search of screenplays. RSL owns the full rights to thirteen major motion picture screenplays that are designed to launch up to eight major film franchises in five different genres. Seven other projects are in the writing process. They have all been written and developed to match the RSL story development methodologies, the RSL business plan and RSL’s capital markets strategy. • Movie Project Inventory The development and execution of powerful and sustainable movie franchises is vital to creating a strong IPO profile that delivers extraordinary ROEs. Accordingly, all of the RSL projects are designed with sequel potential to further exploit successful films. • “The Michelle Burns Trilogy” is the launch franchise for RSL that confirms the business strategy. The initial three scripts are completed and include “Divided We Fall”, "End Game" and “Insurrection. RSL intends to add additional films to this sequence to build a female American "James Bond" type franchise that combines real world geopolitical issues with more realistic characters that stimulate a much greater spectrum of emotional and intellectual engagement. • “The Arielle DeNovo Trilogy” - “America 2.0” introduces the ultimate feminine “Super Hero” Arielle who solves the world’s real problems with the brilliance of her mind and artistry. “Treachery” is the powerful sequel to America 2.0 in which Arielle matches wits with a Russian Mafia tyrant and an American President gone rogue. “Mastermind” has the most exciting story concept ever attempted in these genres. • “Insurrection” is also a sequel to “Revelations” to complete a crossover of franchises strategy that proved very financially successful with “The Avengers” in 2012. • “Donahue – Origins” is designed to launch a new franchise in the “Jason Bourne”/”James Bond” genre with lead male and female protagonists that are more interesting characters and intellects who take on major international crises in the modern age. “Mastermind” is the second installment in this franchise and crosses over with the “Arielle DeNovo” franchise. It is one of the most exciting motion picture concepts imaginable. • “The Coming” focuses on Michael, a Christ like figure who appears in the modern world on a mission to spawn a reconciliation of humanity and a new age of peace in prosperity. • “The Warning”, “Not Without Honor” and “Vendetta” are the first chapters in three franchise possibilities in the crime/drama/thriller genres. While all films are vulnerable to market acceptance risk and the success of these movies and franchises cannot be predicted with certainty, all of these scenarios have been developed with powerful resonance elements that attract the broad demographics and large international audiences that drive superior ROEs. RSL has six additional film project possibilities in various stages of writing and development. RSL’s mission is to create successful films that will convert all of these franchises scenarios into highly profitable realities that will drive a strong IPO profile.

49 • Strong Female Protagonists Adolescent and adult females comprise about 53% of the moviegoer population and make over 60% of the movie going decisions for themselves, their families and their significant others. As such they are a major target market of RSL movies that are typically driven by strong and intelligent female protagonists who project all the best attributes of modern femininity. They also engage in stories with resonance elements that attract female viewers RSL believes that compelling female protagonists are the great unexploited realm of the modern film era. “Hollywood” too often relegates actresses as superficial secondary characters who are intellectually inferior “eye candy” or sex objects who are reliant on superior male protagonists or as sci-fi super heroes with very little emotional or intellectual depth or range. One of RSL’s core goals is to deliver highly intelligent and resourceful female protagonists who can inspire sophisticated male and female audiences while also offering strong role models for young women. The financial successes of “Black Swan”, “The Hunger Games”, “Catching Fire” and “Silver Linings Playbook” have strongly validated the box office power of the young female protagonist. RSL research and common sense confirm that male audiences enjoy highly intelligent female protagonists with many attributes that trigger excitement in the male psyche beyond just sexuality. RSL movies project feminine attributes in many different ways that will resonate with all audiences.

• Risk Mitigation Strategies

The advanced management of downside risks is a vital component of the RSL value proposition to investors. The goal is to substantially limit the risks of capital loss while positioning the films to realize extraordinary upside ROEs. The goal is to create a compelling risk adjusted return profile that compare favorably to almost any investment alternative. • The consistent ability to create superior movie content which can be produced on modest budgets and that will resonate will large global audiences is the best risk mitigation factor. RSL’s proprietary story writing and development methodologies and initial film slate offer this profile. • Prior to commencement of principal photography for each film project, RSL will generate foreign presales in certain smaller territories e.g., Eastern Europe, South America–Brazil, Australia, New Zealand etc., to 1), generate deposits, facilitate presales advances and 2) facilitate bankable sales estimates /advances for the remaining foreign territories and 3) validate market acceptance. • RSL will package the film projects to fully exploit all available government rebates, subsidies and or tax incentives and brand integration revenues (“Soft Money”). Soft Money revenues go straight to investment recoupment of up to 50% (or more depending upon the amount of brand integration opportunities written into the screenplay) of the total production budget amount. When combined with foreign pre-sales, it can provide recoupment of up to 100% of the production budget with territories such as the North American and western EU distribution markets still not exploited. • After RSL achieves cinematic and financial success with the first two film projects, RSL should

50 be in a position to presell up to 100% of the production budgets for subsequent films in select international markets. This represents an opportunity to eliminate downside equity risk while preserving huge international revenue and earnings potential while exponential increasing risk adjusted ROEs. A careful review of the superior content and broad market acceptance potential of the first two RSL films will alleviate downside risk concerns on these projects. • Unlike most major studios and producers, RSL will offer fair and full financial transparency to key producers, directors and acting talent. This will facilitate RSL’s ability to induce them to take “back end” equity participations in lieu of a significant portion of their traditional “front end” compensation. This approach converts talent into investors, motivates them to perform at their highest level and reduces downside risks for RSL equity investors. It also provides RSL with an advantage versus other producers in securing the optimum talent on a cost effective basis. • The RSL budgets include $24 million for print and advertising expenses per film. These funds will insure theater chain and aftermarket distribution acceptance while allowing RSL to control advertising expenditures and avoiding the adverse costs and influence of the major studio distributors. RSL will not have to rely on the film festival circuit to achieve broad distribution.

RSL’s goal is to return the $50 million of primary equity capital to investors by month 30 to eliminate their primary equity risk.

• Limited Downside Risk With Unlimited Upside Potential Motion pictures offer unique sources of cost free capital that are typically not available in other industries. These sources reduce the total capital at risk while mitigating most of the downside risks and greatly improving the risk adjusted ROEs. Please consider the following example of a film project compared to a commercial office building project with the same capital budget:

Movie Project ($Millions) Amount Office Building Analogy Production Budget $ 30 Land/Building construction budget - Government rebates ($ 6) Government subsidy - Talent deferrals ($ 3) Contractor takes equity for services - Foreign presales ($ 10) Tenant prepays for long term leases - Brand integration ($ 5) Building naming rights proceeds Net Capital At Risk Estimate $ 6 Net Capital At Risk Estimate

It should be noted that the movie project capital sources are commonplace and the office building analogies would be very unlikely to occur. Accordingly, the office building project would likely have the full $30 million of capital at risk. Additional movie advantages can be summarized as follows:

Movie Project Advantage Office Building Project

Capital recovery - 2 years > Capital recovery - 20 - 30 years

51 Unlimited revenue/ income > Revenue/income limited by square potential footage & local market rental rates Diverse global revenue sources > Only local revenue sources Net capital at risk - $6 million > Net capital at risk - $30 million ROI potential - Up to 840x > ROI potential - Up to 1x Risk adjusted ROI potential > Risk adjusted ROI potential Market acceptance risk = Market acceptance risk

The above charts highlight the many capital sourcing, risk management and other advantages that enhance the profile of movie projects versus commercial office buildings that are widely perceived to be more attractive investments. Market acceptance risk is an issue for either investment so matching the design of the projects to the preferences of the target markets is vital in either case. The RSL business plan allows for RSL’s operations to be located in places that offer the most cost effective opportunities and/or match investor preferences.

“Hollywood” Reality Check

There is a prevailing but misguided notion in the film investment realm that "industry professionals" should be relied upon in assessing the content and structuring of film projects. RSL challenges this conventional "wisdom" very strongly in the interest of creating successful film investment ventures.

In reality and with very few exceptions, movie "industry professionals" have an extremely poor record of accurately assessing audience preferences and structuring films that consistently make superior ROEs for investors. The best place to start to illustrate this assertion is a review of what has been recently produced by the "experts" in Hollywood. Below is a list of a recent top 30 active movies in theaters:

Movie Distributor Genre Total Gross The Other Woman 20th Century Fox Comedy $24,763,752 Captain America: The Walt Disney Action $225,059,241 Winter Soldier Heaven is for Real Sony Pictures Drama $52,462,168 Rio 2 20th Century Fox Adventure $96,389,900 Brick Mansions Relativity Action $9,516,855 Transcendence Warner Bros. Thriller/Suspense $18,632,142 The Quiet Ones Lions gate Horror $3,880,053 Bears Walt Disney Documentary $11,281,525 Divergent Lions gate Adventure $139,521,857 A Haunted House 2 Open Road Comedy $14,183,335 God's Not Dead Pure Flix Drama $52,705,660 Draft Day Lionsgate Drama $24,161,059 Grand Budapest Hotel Fox Searchlight Comedy $48,803,152 Noah Paramount Drama $97,314,552 Oculus Relativity Horror $25,223,301 The Railway Man Weinstein Co. Drama $895,291 Muppets Most Wanted Walt Disney Comedy $49,411,389 Mr. Peabody & Sherman 20th Century Fox Adventure $108,047,878 2 States UTV Communications Drama $1,742,449 The Lego Movie Warner Bros. Adventure $252,798,441 The Lunchbox Sony Pictures Classics Drama $2,696,329 Fading Gigolo Millenium Ent. Comedy $545,059 Under the Skin A24 Thriller/Suspense $1,531,587 300: Rise of an Empire Warner Bros. Action $105,814,532 Non-Stop Universal Action $90,490,705 Only Lovers Left Alive Sony Pictures Classics Drama $500,964 Frozen Walt Disney Adventure $400,175,401 From the Rough Freestyle Releasing Drama $150,000 Le Week-End Music Box Films Drama $1,844,018 Finding Vivian Maier IFC Films Documentary $702,038

The following key points can be made about the above list: • The list is largely devoid of substantive and relevant films that are well designed to engage the human heart, mind and emotions in profound and poignant ways. They largely ignore the "disaffected" audiences that make up 89% of potential moviegoers who want to be inspired and illuminated as well as entertained. This very large group of over 298 million people in North America only sees 2-3 films per year on average because there are not enough films that stimulate more frequent attendance. • If you carefully examine the film concepts, it is clear that the vast majority of the projects were not well designed to resonate with broad domestic demographics and large international audiences that are vital to maximizing ROEs. On their face, at least 2/3 were financially dead on arrival at the conceptual level and should have never been produced. • None of the films were available for independent investment and would have achieved a reasonable ROI for investors after theater, marketing and distribution costs are deducted. Please consider the following films from the above list that have accrued more than $50 million of box office revenue:

Movie Days Global Production Prints & Theater Est. Distrib Est. To $ Millions Box Office Budget Advertising Take Gross Fees Producer Profit Captain America 24 $648 ($170) ($60) ($324) $94 ($106) ($12) Heaven Is For 12 $57 ($12) ($10) ($29) $6 ($10) ($4) Real Rio 2 17 $350 ($130) ($40) ($175) $5 ($58) ($53) Divergent 38 $233 ($85) ($50) ($117) ($19) ($39) ($58) God’s Not Dead 38 $53 ($2) ($5) ($27) $19 ($9) 10 Noah 31 $321 ($130) ($50) ($161) ($20) ($54) ($74) Mr. Peabody 52 $265 ($145) ($35) ($133) ($48) ($44) ($92) The Lego Movie 80 $453 ($60) ($35) ($227) $131 ($75) $56 300 52 $330 ($110) ($50) ($165) $5 ($54) ($49) Non-Stop 59 $183 ($50) ($25) ($92) $16 ($30) ($14) Frozen 157 $1,144 ($150) ($50) ($572) $372 ($189) $183 Transcendence 10 $53 ($100) ($35) ($27) ($109) ($9) ($118) Totals $4,090 ($1,144) ($445) ($2,049) $460 ($677) ($225)

Important Notes: • Three of the films are recent releases with more box office potential. • Additional box office revenues are possible but are usually nominal after 30 days. • Marketing costs and distribution fees are educated estimates because they are not made public. • Non-box office revenues may be significant on certain films. • All overhead costs at the producer level must be deducted from the “Net to Producer” figures.

54 Please consider the following important observations from the charts above: • Only 10% of the total 30 films on the first chart are likely to deliver an ROI to producer equity if a third party distributor is involved. This increases to 27% if distributors are not involved. • Only 25% of the films on the second chart are on a clear path to delivering an ROI to the producer equity even though their revenues are above $50 million. Yes, additional box office, DVD and other ancillary revenue may reduce the losses but ROEs are unlikely on the vast majority of these films. • 66% of the films with revenues above $50 million on the second chart were profitable before distributor fees. Therefore, self-distribution is vital to achieving ROEs. • There is no readily available avenue open to investors to selectively invest in the few film projects that project strong investment potential, much less realize strong ROEs after studios manipulate the cost profiles to their own advantage. • All of the above films reached distribution but they likely failed as producer equity investments over 85% of the time. Accordingly, superior content and resonance elements matter very much in reaching the large audiences that are required to achieve strong risk adjusted ROEs for equity investors. • Only 3 to 5 of the 30 films (10% to 17%) in the first chart have identifiable and warranted franchise potential. Every well conceived film that is produced should have identifiable franchise potential. • Large movie budgets can be a major impediment to achieving ROEs. Based on these realities, the following assertions can be made: • It is an extreme challenge to get sophisticated investors to invest hard equity in the existing industry profile that provides attractive risk adjusted returns less than 15% of the time. • Certain financial structures limit the amount of capital at risk but not the magnitude of the risk itself for the equity invested. • Almost all of the credible data indicates that very few films recoup their theater costs, their Marketing and their distribution costs to reach a point where an equity investor can recoup all of their capital invested, much less an attractive ROI. • Hard equity is nearly impossible to raise without a sound investment and market acceptance profile that is driven by strong story content. There are several key reasons why film investments fail over 85% of the time: • The list above is very strong evidence that "Hollywood's" market research and story development practices are almost completely broken. "Hollywood" simply does not do a good job of developing movie content that inspires large audiences to go to the theater. • “Hollywood” almost completely ignores the discriminate moviegoer audience. As an example, is there a single movie on the list above that would excite you or most other adults to go to the theater? • Studio production costs and distribution fees are wildly inflated, thus leaving very little returns for production equity. • Studios are making ever fewer films with ever growing budgets. This concentrates and raises risks.

55 • For every big budget success like "Avengers", "Hunger Games" and “Skyfall” there are more enormous equity investor disasters like "John Carter", "Battleship", “Cloud Atlas”, "Prometheus" “The Lone Ranger”, “Transcendence” and many other big budget box office disasters that have appeared in 2013-14. • "Indie" productions have smaller budgets but are almost always designed for small target audiences that very seldom produce strong ROEs for hard equity investors. The simple reality is that conventional big studio and "Indie" films are among the worst investment profiles available in the capital markets.

Understanding The "Hollywood" Status Quo

There is perhaps no industry on earth where there is a bigger disconnect between what consumers want and producers create.

The images above represent the reality and opportunity of filmmaking and investment.

• Which image above better represents the modern film industry in your mind and in the minds of most people you know? • Does this reality exist because the reservoir of great story ideas has been exhausted or because of a flawed story development and business culture that fails to make movies that inspire large international audiences to go to the theater? • Is "Hollywood" making multitudes of great movies that people cannot afford to see in theaters or prefer to watch through other media or failing to make movies that excite theater attendance? • Do 298 million+ people in USA-Canada see an average only two movies each year in theaters because they do not enjoy going to the theater or because there are very few movies that they want to see? • Is this circumstance an insoluble problem or a lucrative business opportunity?

56 Investment Reality Check

There are few investments that offer more extraordinary ROI potential than movies and there are few businesses that deliver worse ROI performance than movie producers. Over 85% of movie equity investments result in losses for equity investors. This occurs for the following key reasons: • The “Hollywood” story sourcing & development system is deeply flawed. • Market research is poor. Up to 90% of the potential audience is often ignored. • “Hollywood” does not develop and reward innovative writers. • Movie producers are very seldom-effective risk and business managers. • “Hollywood” business practices are designed to exploit investors. • The system rewards celebrities and producers even when their films fail. • “A List” talent attachments seldom produce positive ROEs for investors. The above realities are a testament to the recurring ability of movie producers and celebrities to exploit investors who want to play the Hollywood celebrity game. This fosters a deeply ingrained industry culture that is designed to exploit investors rather than respect and reward them for the risks they take. Actors are VERY poor judges of film quality, ROI potential and audience appeal. They DO NOT CARE if investors make money because they get paid either way. In truth, the talent attachment system for financing films is nothing more than a self-serving game that is carefully designed to exploit investors. As a result of the above factors, there may be no major industry where there is a greater disconnect between what consumers and investors want and what producers create. Accordingly, about 89% of movie goers in North America only saw about two movies in theaters on average in 2013. It is no accident that movie “Stars” almost never invest in their own movies. They better than anyone understand that Investors can achieve much better ROEs in Las Vegas than in the current “Hollywood” system.

The Flawed “Packaging” System The “packaging” of most “Hollywood” studio and “Indie” films involves the sourcing a screenplay and the attachment of a director and actors to the project to secure financing and/or distribution. Under the prevailing system, the attachment of “A List” directing and acting talent is the primary consideration in whether to “Green Light” a film project for production. Too often the profile of the story itself and its potential appeal to large international audiences is a far secondary consideration to the “A List” talent that is willing to attach. The result of this approach is a recurring stream of big budget films with big name “Stars” that lose huge amounts of money for equity holders on the projects. Poor story development and business practices along with playing the “A List” attachment game are the reason almost all feature films lose money. RSL will not play their game. RSL will raise the capital, develop the films projects and contract with the optimum producers, directors and talent to execute the

57 projects vision within the RSL film making and investment vision and methodologies. All film projects will be approved by the RSL board of directors based on execution team recommendations.

Exploiting the “Hollywood System” The core RSL team consists of a capital market professional with decades of experience analyzing countless businesses in many industries through multiple economic cycles. RSL has analyzed the movie industry and has reached the following key conclusions:

The Market A huge exploitation opportunity. • The market of this $70 billion industry is huge, global and not well exploited • The only major constraint on product demand is the availability of quality products • Huge audience segments are disaffected because products do not match their preferences • Almost everyone in the developed world is a potential frequent customer for multiple products • Market barriers to entry are low

The Product A huge disconnect between the producers and the consumers. • Every movie is a new product introduction with associated risks • The story is the most vital product feature but screenwriting is not focused on global markets • Screenwriters are not well developed, respected or compensated • Product development practices are not focused on consumer preferences • Market research is largely not used to target disaffected global audiences and consumers • There is little quality validation of product concepts prior to production • Quality movie production is much less than theater capacity • High cost special effects and "Star power" are being substituted for cost effective story telling • There is a huge void of thought provoking products that inspire the human heart, mind and spirit • There is a huge product void between superficial studio films and narrow market indie movies

Movie Investment Profiles There is huge investment return potential but a big disconnect between the producers and investors in the status quo.

RSL Investment Profile Positives • The IPO strategy offers the plausible potential to deliver ROEs that are up to 300x project level incomes. No other producer is known to be pursuing this strategy and almost none of them have the successful earnings track record and franchise profile to pursue an IPO.

58 • Exciting investment potential - Early return of capital with huge ROEs are possible. • ROEs are a function of product quality not budget amount - Huge budgets not required to achieve huge returns. • Risks are real but manageable with a sophisticated business approach. • Huge and global markets with low barriers to entry and large disaffected consumers to be served. • Dysfunctional movie industry practices represent an investment opportunity to be exploited. • Large aftermarket revenue sources can insure recovery of investment and enhance ROEs.

"Hollywood" Investment Profile Negatives • Most movies lose money - This reality is a function of poor business and story development practices • The movie game is slanted against investors - It is no coincidence that movie industry pros seldom invest in movies • Most movie pros make their fortunes in production, promotion and distribution, not movie profits • Poor risk versus return profile - Investors take the downside risks and have limited upside potential • The current movie industry has very little respect for investors or concern for rewarding them for the risks they take • Movie budgets are growing even as movie quality is stagnant or deteriorating - Risks are rising as ROEs fall

Understanding Rate Of Return On Investment Dynamics The chart below illustrates the variances of rates of return on investment on 3 successful films.

Description ($ millions) Avatar Gone Girl Dances With Wolves Known global box office/DVD Revenue $3,174 $393 $415 Less: Theater/Distributor Takes at 60% ($1,904) ($236) ($249) Less: Production Budget ($ 425) ($ 61) ($ 19) Less: P&A/Marketing Budget Estimate ($ 100) ($ 40) ($ 15) Estimated Gross Profit $ 745 $ 56 $142 Gross profit As % Production Budget 175% 92% 747%

This chart demonstrates that the major studio model of making very large budget films can achieve high gross revenues and absolute gross profits. However, the large budgets substantially reduce the rates of return on investment ceiling versus smaller budget films that resonate in high revenue ceiling genres. Which project would you choose if you had $19 million to invest in motion pictures?

• The RSL business model is based on the "Dances With Wolves" scenario. Modest budget movies in high revenue ceiling genres. "Dances With Wolves" succeeded so spectacularly because is contained

59 a broad diversity of compelling resonance elements that resonated with large global audiences. Those elements engaged audiences on a broad range of thought provoking, emotional, romantic, sensual, intimate, poignant, human, visual, audio, cultural and life relevant levels with almost no CGI. • Creating film concepts that will resonate like "Dances With Wolves" requires much more skill than producing shallow story contrivances that rely of gratuitous action, violence, horror, sexuality, depravity and CGI, etc. but they offer much higher rates of return on investment than Avatar when they succeed. • The project level rates of return on investment will then be exponentially increased by establishing a going concern studio that is designed to create a compelling IPO profile in year 5 that can deliver up to 30x to 300x+ project level earnings in year 4. Investment Profile Summary Unsound business, risk management and story development practices in the movie industry have adverse effects but open great exploitation opportunities: • The movie investment profile could be extremely attractive – early return of capital and superior returns on capital are achievable • The opportunities for profitable exploitation are unlimited • The story sourcing and development system is broken but this if a function of a failed culture and methodologies rather than the absence of great story concepts • 70% or more of potential industry revenues are being missed • 89% of USA and Canada movie goers attend only 2 movies per year on average • Most movies lose money for investors because of poor story development, risk management and business practices • Fewer but much larger budget movies are being made – This concentrates investor risk • Unemployment rates for movie talent are high and rising • Investors and audiences are losing interest in movies • Large capital investments in movie theaters are underachieving for lack of compelling movie attractions • Great opportunities for exciting movies and huge investment returns are being missed • Producers are largely not focused on exceeding investor ROI expectations

60 Concept Evaluation, Screenwriting & Development

Overview

Everyone is familiar with the recurring experience of wanting to go to a movie, searching the movie listings and finding nothing that inspires a trip to the theater. This reality persists because the story sourcing and development methodologies that dominate the movie industry are systemically and culturally flawed. The movie listings, industry statistics and the poor financial performance of most films offer overwhelming evidence that supports this assertion.

Studios and producers invest large amounts of money with consultants in efforts to match their movie concepts with audience preferences. This approach is not consistently effective because no amount of analysis or tinkering will convert poor movie concepts into great movies that achieve global audience resonance and consistent financial success. Consultants can estimate how audiences will react to a film premise but they cannot tell you how to create a great film concept in the first place.

Almost all great movies are born in the imaginations of prescient storytellers with broad life experience and knowledge as resources for conceiving new and exciting story ideas that will resonate with large global audiences. The pool of writers who fit this description is extremely small and this is the core reason there are so few great movies.

There are a lot more movies being made than there are great screenwriters. Most people who have the breadth of life experience to create great story concepts are not great technical screenwriters because they have been busy living their lives outside of the “Hollywood” bubble. Most professional screenwriters do not have enough life experience to consistently conceive great film concepts that will resonate with large audiences.

The major studios and producers try to address this content problem as follows:

• Produce remakes of previously successful films. This is generally not productive because the movie outcome will be predictable. • Create huge budget films loaded with action and special effects that overwhelm the story deficiencies. This works well with about 10% of the global movie market but it does not excite the other 90% who want to be emotionally, intellectually and viscerally engaged in addition to visually entertained. This strategy results in a few financial successes and numerous and often spectacular financial losses when the films flop. • Create films based on books that were successful. Very few books sell enough copies to rely on as a basis for a movie financial success. For every “Harry Potter” and “The Hunger Games” there are countless books that do not convert into financially successful movies. • Rely on “produced” screenwriters to create original content. This is an ineffective approach because very few of these screenwriters have enough breadth of life experience to consistently originate

61 compelling story concepts that will resonate with large global audiences. There is a very important difference between being “produced” and having written screenplays that were financially successful based on their original ideas. • Access content from unproduced screenwriters. This source is increasingly avoided because so few of these screenwriters possess strong technical screenwriting skills. The “coverage” systems screen out almost everything except technically sound scripts and the methodologies do not place appropriate emphasis on the global market resonance potential of the story concept.

Given the above sources, it is no surprise that there are so few great movies and most movies fail to achieve financial success. The persistent inability of the motion picture studios and producers to source fresh, inspiring and compelling content is the great problem of the movie industry and a great wealth creation opportunity for visionary entrepreneurs and prescient investors.

The Renaissance Studio Difference

The most important element in successful in filmmaking and investment is the ability to consistently source, develop and produce compelling story content that will resonate with large global audiences. Over 85% of film projects fail to make a profit because the story concept is poorly conceived. Accordingly, the value proposition of RSL is focused on the origination of original content using proprietary methodologies. The key to financial success in movie investments is the origination of compelling stories with powerful resonance elements that engage audiences very positive points of differentiation from the industry status quo.

Given the above realities, the cinematic and financial success of RSL is grounded in the consistent ability to source, write and develop superior motion picture concepts that can be produced on budgets of $30 million and resonate with broad demographics and large international audiences. This requires the creation of a unique and innovative story sourcing and development process and methodologies that avoid the shallow story telling contrivances that dominate the movie industry. This is not difficult to achieve but it is impossible to do within the confines of the insular and incestuous story development culture of “Hollywood”.

The RSL projects are unique within the movie industry. They have not been written by wannabe screenwriters or within flawed story development processes that ignore market realities, preferences and opportunities. They have not been written by “produced” screenwriters who have made their careers writing scripts to match the deeply flawed story development and business practices of the major studios and “Indie” producers. They have not been written to rely on costly “A List” star talent or gratuitous action, violence, depravity, sex or visual effects.

The RSL slate has been created by a writing source with vast life, social, political, business and capital markets experience that serves as a source of compelling content that is relevant in the modern age. This writing source owes no fealty to the industry status quo and is therefore free to write stories that will resonate with large audiences and reward investors for the risks they take.

62 There are legions of people and producers who believe they have great screenplays but each RSL project has been written and developed to match the RSL filmmaking, marketing and capita markets vision. They have been crafted by RSL to target all four quadrants of broad spectrum domestic and international audiences. Below is a summary of the parameters for writing and evaluating movie project concepts for development, production and global distribution by RSL.

• The key to creating consistently superior content is a system that focuses on the integration of powerful resonance elements into the stories and characters. Stories must be structured to transcend cultural, social and demographic differences to resonate in profound and poignant ways. Large disaffected international audiences must be targeted rather than ignored and small market "Indie", comedy, horror, sports and "vanity" projects must be avoided. Well conceived and executed movies with powerful cross cultural resonance elements have no problem with international distribution. • Superficial and implausible story contrivances and characters with repetitive action/effects do not inspire the huge "disaffected" global audiences. By contrast, RSL will produce story, issue and character driven movies set in the modern age. They project positive alternative narratives as an entertainment refuge in a difficult world. They avoid the repetitive and gratuitous violence, sexuality, horror, action and depravity that dominate modern adult cinema. • RSL's films are crafted to resonate on intellectual, emotional, sensual, social, visceral, visual, artistic, romantic, poignant and dramatic levels to drive large international movie attendance. This approach will resonate with the "disaffected" and frequent movie goer audiences. The project level ROI end game is superior earnings through much deeper market penetration and cost effective story telling, distribution and advertising. • Almost all humans share a common desire to live in peace, liberty and prosperity but civilization is immersed in economic stagnation, political strife and social decay. RSL asserts that movies are a powerful medium to effect positive social, economic, political and geopolitical change and that engaging the most important issues of the modern age in productive and non-partisan ways is a path to consistent financial success in filmmaking. RSL films will resonate with people of all ages and cultures who value positive insights in a difficult world. All RSL films will be triumph of the human spirit stories that inspire and illuminate as they entertain. • The RSL films are typically driven by very strong and intelligent female protagonists who project all the best attributes of modern femininity. RSL believes that compelling female protagonists are the great unexploited realm of the modern film era. “Hollywood” too often relegates young actresses to superficial secondary characters who are intellectually inferior “eye candy” or sex objects who are reliant on superior male protagonists or as sci-fi super heroes with very little emotional or intellectual depth or range.

One of RSL’s core goals is to deliver highly intelligent and resourceful female protagonists who can inspire sophisticated male and female audiences while also offering strong role models for young women. The financial successes of “Black Swan”, “The Hunger Games”, “Catching Fire” and “Silver Linings Playbook” have strongly validated the box office power of the young female protagonist in these genres.

63 Create A New Story Development & Investment System

Market Realities

• Moviegoers, investors, talent, distributors & theaters are frustrated with the “Hollywood” system • Barriers to market entry are low relative to other industries • There are potentially huge market and investment return opportunities to be exploited • The only major limit on demand is the supply of movies that inspire audiences and investors

RSL Will Offer

• Quality, thought provoking films that entertain and inspire the human, heart mind and spirit • Stories with powerful themes that transcend cultural differences • Films that are designed with market research to reach disaffected and global audiences • Modest movie project budgets that represent hard costs and profit sharing with investors • Story development practices that are designed to maximize investor profits • Comprehensive and professional business plans on every movie project • Respect and rewards to the writers who design movies and the investors who finance them • A non-studio alternative that minimizes investor risks and maximizes their returns • A lot more jobs to industry talent • An environment where the best talent wants to work • Management of its screenwriters to match stories with disaffected global audiences • A current slate of 13 movie projects with modest budgets and global market potential

Inspire Audiences & Reward Investors

Audiences

• Almost everyone has had a relationship with movies in their life • Almost everyone enjoys a great movie • Almost everyone has repeatedly searched the movie listings in vain for a film that inspires them • Almost everyone has felt the disappointment that so often follows an uninspiring movie • Many people have abandoned movie theaters all together • Nobody gets the disconnect between Hollywood productions and what they want to see • Most people seldom go to movies because there are so few movies that inspire their interest

64 Investors

• Almost every movie investor has felt the excitement of investing in a movie • Almost every movie investor knows the frustration of no transparency on costs and revenues • Almost every movie investor has seen the potential for huge profits in movies • Almost every movie investor has seen profits vanish into losses without accountability • No movie investor understands “Hollywood” business practices • Most investors are unwilling to invest in movies because they seldom offer a path to superior ROEs RSL has been formed to give global audiences and investors what they want - Great movies that engage their emotions and transparently reward investors for the risks they take. It is a very simple concept.

Key Film Investment Vision Elements • Focus on maximizing profits to investors • Minimum ROI target of 50% with 30 month recovery • Optimize the use of financial leverage • Budget and & revenue transparency • Project investment flexibility • Film budgets typically not more than $30 million • Stories designed for global audiences • Pre-sell some distribution to leverage market value upfront • Self-distribute to avoid fees and maximize advertizing productivity • Maximize production rebates / subsidies / tax benefits • Minimize / offset corporate taxes • Maximize aftermarket / non-theatrical, ancillary revenues • Validate concepts with market research • A sound business & marketing plan for each project • Sound business execution • Optimize story content and resonance elements to avoid costly CGI / action / effects • Avoid “A List” acting talent unless the at the right price/value • Pursue partnerships with major theater chains • Strong risk and cost management practices and financial transparency • Make investor returns the top priority rather than the last concern • Offer multiple high ROI exit scenarios • Complete an IPO in year 4-5 that delivers an 30x+ P/E ratio and investor liquidity

65 Key Film Making Vision Elements

• Design films for global audiences • Target the large disaffected audiences • Professional artistic execution • Stories that have not been seen before • Movies that inspire the heart, mind and spirit • Story and character driven films • Thought provoking, life relevant themes • Triumph of the human spirit plots • Real people doing extraordinary things with great intelligence, courage and determination • Educate, illuminate & inspire audiences • More artistry and less special effects • Develop, respect, inspire screenwriters • Source & develop emerging film makers • Develop the directing and acting talent of the future • Market validate all concepts in advance • Strive for awe inspiring story elements • Feature gritty realism that engages on visceral levels • Create emotional roller coasters • Avoid gratuitous sex, violence, action, horror and depravity • Offer positive alternative narratives on relevant social, political, professional and personal issues • Inspiring characters with tremendous life progressions that convey positive role models • Place extreme emphasis on maximizing the quantity and effectiveness of resonance elements The last element is the most important because it is the difference between average films and great movies that deliver superior ROEs to audiences and investors.

Key Structural Elements • High concept - Stories should involve relevant issues in the modern world • Franchise profile – Must have identifiable major franchise potential • Positive narratives – Must project profound and positive social, life and geopolitical narratives • Themes - Triumph of the human spirit stories - Stories that illuminate, inspire and entertain • Innovative premise – Unique, substantive and life relevant to the modern age • Reality based - Plausibility and gritty realism rather than over the top “Hollywood” contrivances • Compelling protagonists - Intelligent people in triumph of the human spirit scenarios

66 • Female protagonists - Strong and intelligent female protagonists preferred • Realistic antagonists - Dark and complex psychologies arcing toward positive outcomes • Sub-Texts - Romantic, intimate, poignant, humor, spiritual or artistic elements are desirable • Large audience appeal - Identifiable four quadrant and international audience appeal potential • Superior concepts - Grounded in positive points of differentiation from other films • Cost effective - A $20 - $30 million budget unless audience appeal elements justify more investment • Audience focus - Disaffected and discriminate domestic audiences and international audiences • Plots - Story and character driven - Real people overcoming huge obstacles to achieve their goals • Characters - Realistic people with strong character arcs • Special effects/CGI - Limited to keep budgets down and keep the focus on the resonance elements • Sex & violence - Never gratuitous - Limited to scenarios that advance plot and thematic progressions • Action sequences - Never gratuitous - A focus on very realistic action that enhances the story

Audience Resonance Elements Identifiable resonance elements as follows: • Emotional – Traversing the full spectrum of emotions in each script is desirable • Visceral • Intellectual • Educational • Life relevance • Enlightenment • Positive affirmations • Sensual • Intimate • Poignant • Artistic • Spiritual • Romantic • Humor • Audio • Visual Elements to be avoided: • Cliché concepts • Shallow or superficial plots • Reliance on gratuitous sex, CGI, effects, violence, horror, action, amorality or depravity

67 • Narrow market focused • Vanity projects • “Over the top” action, violence or scenarios • R or NC-17 content

Genres The following genres are preferred because they have much larger market potential: • Action – Not gratuitous – Must drive the key story elements • Adventure • Thriller • Drama • Suspense • Clandestine The following genres are to be avoided because of small international market potential or cost issues: • Sports • Horror • Common, low budget “Indie” fare with small market potential • Comedy • Fantasy • Science fiction - A very overdone genre that is costly to produce. It would have to be a sensational concept that can be produced on a cost effective basis.

Key Questions

• How does this screenplay meet each of the above criteria? • What makes this screenplay special? • How does the story engage the audience on intellectual, emotional and visceral levels? • How will this screenplay appeal to large and disaffected domestic audiences? • How will this screenplay appeal to large international audiences? • What are the key elements of the story? • What are the target markets and how does the story attract them? • What is the positive effect of this story on the viewer?

RSL cannot achieve its cinematic and financial goals by imitating what the studios and “Indie” producers are doing. RSL will succeed by creating very positive points of differentiation from the industry status quo that will resonate with large audiences on many levels.

Key Screenwriting Concepts Movie screenwriting is divided into two major elements: Conceptual and technical. Conceptual Screenwriting Conceptual screenwriting involves the creation of a compelling and innovative story premise that: • Is materially different from and superior to other movies that have been produced recently. • Will resonate with large North American demographics. This should ideally include appeal to all four quadrants of males and females above and below 25 as well as racial/social/cultural preferences. • Will inspire large international audiences whose preferences may be very different. • Includes unique characters with strong character arcs. • Allows for superior production values on cost effective production budgets. • Conveys compelling plot progressions and themes that resonate. • Contains a multitude of powerful resonance elements. Conceptual screenwriting requires a diversity of experience and skill sets that are seldom found in any one person. Please consider the following skill sets that are key to financially productive screenwriting: • An advanced understanding of human psychology • An ability to identify target markets and how to appeal to many of them in one concept • The financial sophistication to associate story content with production costs and potential revenues • The sophistication to write within a creative and business vision that will be ROI productive • The ability to conceive of concepts that are fresh, relevant and inspiring to many people • The skill to create compelling characters that engage the audience on many resonance levels • The skill to weave all of the above into a sound story structure and progression • A high level of life awareness and emotional maturity • A reservoir of diverse life experience to drive compelling content and powerful resonance elements The last element in the list above is the most vital to creating truly great films that will resonate with large international audiences. It is also the most difficult skill set to find because it is lacking among most career screenwriters who have little diversity of life experience. It is one thing to imagine concepts, stories, situations, emotions and resonance elements. It is a very different thing to have experienced these factors in life itself and to successfully weave them into stories in compelling ways. Screenwriting classes and seminars can be useful in honing the craft of screenwriting but they are no substitute for a broad diversity of real life experience when creating great story concepts and situations.

69 Technical Screenwriting Technical screenwriting includes the craft of enhancing and converting the conceptual elements into a format that matches technical production requirements while integrating and enhancing dialog and action sequences to produce strong production values. There hundreds of screenwriters who have mastered technical screenwriting. There are very few screenwriters who have mastered conceptual screenwriting. There are far less who have mastered both. This reality exists because most screenwriters do not possess a broad diversity of life experience that can be the source of story concepts that will resonate with large audience demographics. It is very rare to find a screenwriter who has experienced enough of life to write compelling stories that will resonate on many sensory and life relevant levels. This is why so many films fail to find a large audience. RSL believes that the skill sets of conceptual and technical screenwriting are significantly different and that relying on one person to master both is not the most effective way to achieve consistently superior outcomes. A much better approach is collaboration between two or more screenwriters who have mastered conceptual and/or technical screenwriting. Given the intrinsic merit of this philosophy, all of the projects in the RSL slate are currently very advanced in terms of conceptual screenwriting and less completed at the technical level. This status will require enhancement of the screenplays to optimize their technical features after the funding of the “Primary Capital Facility”. This approach will allow RSL to employ very strong technical screenwriting resources to enhance the screenplays prior to and during pre-production. The screenplays are all well advanced as well as conceptually and structurally sound so the technical enhancements will not be time consuming.

Key Financial Success Criteria & Methodologies Story concept, content, elements and structure are the most important factors in achieving cinematic and financial success in filmmaking. Despite this objective fact, the prevailing industry system largely ignores this reality and promotes the notion that directing and acting talent are the primary success factors. In truth, there are countless directors and actors who can make a great story a cinematic and financial success but no one can make a poor movie concept successful. Accordingly, RSL place its major focus on the creation of superior stories that will resonate with large target audiences. This approach greatly reduces the value of costly “A List” talent and costly effects in achieving cinematic and financial success without diminishing the production and acting values of the movie. All of RSL’s entertaining movies have strong female protagonists and are set in the modern age in the action/thriller/drama/clandestine genres. These life relevant stories involve the most profound social and geopolitical issues of our times. They rely on real world scenarios and powerful characters rather than common theatrical contrivances and costly computer generated special effects and chase scenes. They also project positive alternative narratives in the social, professional, political and geopolitical realms that will compare favorably to the gratuitous violence, sex, action, amorality and depravity that dominate modern movie content.

70 It is vitally important to understand these concepts and contrasts to grasp the value of the RSL vision and its slate. Please consider the following methodologies that drive the RSL value creation proposition: • All RSL films are designed to be produced on production budgets of not more than $30 million without sacrificing important production values. • Downside investment risk is limited by smaller production budgets that permit project risk diversification and advanced risk management practices employed by RSL. These risk mitigants will be augmented by substantial film production spend rebates and other “soft money” revenue streams as well as key pre-sales of international territories to create market and underwriting valuations. • Huge studio overhead and distribution costs are avoided by a laser focus on cost control and effectiveness as well as self-funding and control of marketing budgets/distribution strategies. • Production budgets are reduced by substituting superior story content for shallow “Hollywood” contrivances that rely on costly and repetitive CGI and special effects that too often fail to engage audiences on an emotional, intellectual or visceral level. • All RSL films avoid investments in costly “A List” acting talent that would drive up production budgets without creating the 3x+ revenue increase that is necessary to recover the cost of their services. RSL will source and develop the acting talent of the future. • The subject matter is designed to engage the spectrum of the human intellect and emotions in very profound and visceral ways. These films seek to use film to illuminate a path to a much better world. • The content of the RSI slate compares very favorably to the slates of any studio or "Indie" producer. The projects do not rely on vast amounts of costly special effects to inspire audience enthusiasm. The net effect of the above factors allows RSL to reach its minimum goal of a 50% ROI by producing these films on 29% of the genre average costs and reaching 35% of the genre average box office revenues. Revenues that exceed 35% of the genre average unleash very superior ROEs. A subsequent IPO offers the real potential to multiply these project level ROEs by an 100x to 300x factor as demonstrated by the Lions Gate Entertainment and Netflix examples.

Advanced Content Evaluation Metrics Over 85% of movie fail to achieve sufficient market acceptance to generate enough net revenues to recover the costs of production, marketing, distribution and producer overhead. This reality persists because the movie industry does a poor job of assessing the viewing preferences of broad spectrum international demographics and creating movie concepts, content and characters that inspire them to view the movies. The industry also opts to create films that target narrow demographics rather than much larger, mainstream audiences. It was vital for RSL to solve this problem in order to create a highly profitable and sustainable business model and studio. Movie industry mythology asserts that it is impossible to project market acceptance of any movie, especially if it is not a sequel. In reality, it is not difficult to identify the 85% of movie concepts that are likely to lose money and to avoid the types of movies that lose money.

71 RSL invested substantial time and thought on the creation of advanced content evaluation metrics that can largely predict the movie concepts, content and characters that should be avoided to insure a high profitability success rate. The evaluation metrics and process are too vast to explain in this forum but the RSL summary coverage template below demonstrates its after effect and reveal the basic methods that are employed to insure strong market and broad demographic acceptance. The example below compares the RSL screenplays “Divided We Fall” and “America 2.0” to the recent James Bond Movie “Spectre” on 93 different evaluation elements that are weighted in their importance. These two RSL projects will be the first films in two new franchise trilogies so it is very important that they achieve very strong market acceptance. Apologies for inserting this lengthy chart here but it is very important to understand these methodologies to grasp the full RSL value proposition.

Franchise/Source Material Profile America Divided Spectre 2.0 We Fall 1 Proven franchise (0 to 1000 rating range) 0 0 1000 2 Franchise potential (0 to 200 rating range) 200 200 200 3 Highly successful book or other source (0 to 200 0 0 200 range) 4 Production budget (500 rating is a $30 million 500 500 10 budget. Very low and very high budgets are 0 ratings.) Section Total 700 700 1410

Key Profile Features America Divided Spectre 2.0 We Fall (A rating of 0 is low/poor if low - 50 is great/high) 4 Perpetual action an/or major CGI elements 20 20 50 5 High genre average global revenue potential 40 40 50 6 Epic scope 50 40 10 7 High concept 50 50 0 8 New concept/premise 50 40 5 9 International resonance potential 30 30 50 10 Domestic resonance potential 40 30 50 11 Will the audience leave the theater with their 50 40 0 mindset altered in some profound and positive ways that continue to resonate 12 Movie Rating – G is 15, PG is 30, PG 13 is 50, R 50 50 50 is 10 Section Total 380 340 265

Key Story Features America Divided Spectre (A rating of 0 is low/poor - 30 is great/high) 2.0 We Fall 13 Triumph of the human spirit story 30 30 0 14 Compelling, clear & cohesive story 30 30 10 15 Overall story plausibility/believability 20 30 5 16 Plausibility of the concepts 30 30 10 17 Story depth and range (Shallow is 0 – Deep is 30) 25 25 10 18 Reliance on plot contrivances (Yes 0 - No 30) 15 20 10 19 Life relevance 30 30 5 20 Life affirming 25 25 5 21 Reconciliation elements 30 20 0 22 Positive spirituality 25 5 0 23 Positive role models 30 30 10 24 Profound interpersonal relationships 20 20 0 25 Projects a positive narrative to the audience 30 30 5 26 Lights a path to reconciliation and a better world 25 25 0 27 Projects a positive alternative vision of the future 30 30 0 Section Total 395 380 70

Key Technical Features America Divided Spectre 2.0 We Fall (A rating of 0 is low/poor - 30 is great/high) 28 Screenwriting craftsmanship 15 15 5 29 Story structure (Includes 3 act structure) 20 20 15 30 Compelling plot progressions 25 25 10 31 Sub plot quality, progression & integration to plot 30 20 10 32 Overall thematics 30 20 0 33 Plot and character metaphors for bigger themes 30 25 5 34 Supporting characters quality & development 20 20 10 35 Dialog quality 15 15 25 36 CGI (Very high is 0 – Very low is 30) 25 25 10 37 Protagonist(s) audience engagement 25 25 15 38 Antagonist(s) audience engagement 5 15 5 39 Lead protagonist character arc progression 25 25 0 40 Co-Protagonist character arc progression 5 15 0 41 Lead antagonist character arc progression 0 0 0

73 Section Total 270 265 110 Resonance Elements America Divided Spectre 2.0 We Fall (A rating of 0 is low/poor - 25 is great/high) 42 Intellectual engagement 25 15 5 43 Thought provoking/Illuminating 25 25 0 44 Broad and intense emotional range engagement 20 25 5 45 Emotional journey/progressions 20 20 0 46 Tear inducing moments 15 20 0 47 Visceral engagement 20 20 15 48 Sensual engagement 10 20 5 49 Humor elements 10 5 10 50 Action elements 15 10 25 51 Adventure elements 15 15 20 52 Thriller elements 25 25 25 53 Violence elements 5 15 20 54 Dramatic elements 20 20 5 55 Horror elements 0 0 0 56 Science fiction elements 0 0 0 57 Awe inspiring visuals 25 15 20 58 Awe inspiring audio 25 10 10 59 Performance artistry elements 25 0 0 60 Martial artistry elements 15 10 25 61 Athletic prowess elements 20 10 25 62 Poignancy elements 15 20 0 63 Intimacy elements 0 10 0 64 Romance/Love story elements 10 15 0 65 Love elements (Can be for anyone) 10 5 0 66 Suspense elements 20 20 15 67 Jeopardy elements 15 25 25 68 Adversity elements 15 25 25 69 Conflict elements 20 20 20 70 Courage elements 25 25 20 71 Cognitive excellence elements (Higher 25 25 0 awareness) Major venues/Locations: 72 1. Washington DC 20 20 0

74 73 2. Syria 20 20 0 74 3. Iran 15 15 0 75 4. Moscow 0 20 0 76 5. Mexico City 0 0 15 77 6. Italy 0 0 25 78 7. London 0 0 20 79 8. The Alps 0 0 25 80 9. Morocco 0 0 20 Section Total 545 545 425

Market Demographics Profile America Divided Spectre 2.0 We Fall (A rating of 0 is low/poor - 40 is great/high) 81 Cross gender demographic appeal 35 35 20 82 Cross ethnic/racial demographic appeal 30 30 30 83 Cross cultural/global demographic appeal 25 25 40 84 Broad spectrum international demographic 40 40 20 resonance potential 85 Are the resonance elements something that 30 30 10 audiences have not generally seen before Male demographics 86 2 - 12 5 0 0 87 13 – 25 35 35 20 88 26 – 40 35 35 20 89 41 – 65 35 30 20 Female demographics 90 2 - 12 15 0 0 91 13 – 25 35 35 15 92 26 – 40 35 35 15 93 41 – 65 35 35 20 Section Total 390 365 230 Coverage Totals 2680 2595 2510

These comparisons are not intended as a basis for actual revenue projections but they do demonstrate how the $30 million budget RSL films can compete successfully with major $300 million movies in this genre like “Spectre” by employing many different and much less costly resonance elements that target much broader demographics.

75 Screenwriting Methodologies As with the content evaluation metrics, RSL has invested a huge amount of time, thought and resources in creating screenwriting methodologies that skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum international demographics. As with the evaluation metrics, the scope of the methodologies is far too large to cover in this venue. However, the chart below show a partial excerpt from the resonance grid on “America 2.0”. You will notice that the horizontal axis includes columns that represent 10 different resonance elements out of the 25 resonance elements that RSL evaluates on each scene. The vertical axis represents the scene number in the screenplay which can be near 200 scenes in these types of movies. The entries on the grid assign resonance factors on a scale of from 1 to 10 for each resonance element in each scene of the movie.

Scene Action Venue/ Violence Drama Suspense Fear/ Conflict Adversity Courage Love/ Adventure Jeopardy Romance 1 10 8 2 8 3 8 10 6 4 2 5 3 4 5 3 6 5 5 1 6 10 8 8 10 10 10 10 5 10 7 7 9 8 3 3 8 5 9 2 4 6 7 5 10 7 6 10 9 9 10 10 10 7 11 3 4 7 4 12 4 10 4 4 13 8 14 8 10 6 15 4 10 5 6 7 16 5 10 5 6 9 17 10 10 6 10 6 18 8 10 8 10 10 10 10 10 8 19 3 8 10 10 10 6 20 3 8 10 10 10 6

Each resonance element has different resonance factors for each demographic. The Action element will have a much higher resonance factor for men and the Love/Romance factor will be much higher for women. RSL invest a huge amount of thought and analysis into creating and assessing resonance elements and their corresponding attraction factors to insure very broad demographic market acceptance.

76 This is not a mathematical process. It takes tremendous artistic skill to devise a broad diversity of resonance elements and weave them together into a compelling motion picture.

Concept Evaluation, Screenwriting & Development Summary

The modern film industry does a poor job of differentiating conceptual and technical screenwriting and is almost uniformly guilty of making story choices based on the strength of technical screenwriting. The consistent result of this approach is movies that may be technically sound but are conceptually uninspiring and “dead on arrival” at the theaters. The RSL story development approach will resolve this issue as one very important element in creating an advanced and proprietary process that will consistently deliver superior ROEs to audiences and investors.

The RSL slate has not been sourced from random screenwriters who are conditioned to writing to meet the flawed expectations of studios and producers. Each story has been designed and written to fill the void of thought provoking and viscerally engaging films that transcend demographic and cultural differences to appeal to large international audiences. These are triumph of the human spirit stories that involve real people overcoming tragedies and extreme obstacles to achieve great things in the modern world.

Unlike the major studios and producers, RSL will not be scanning the small incestuous universe of talent agencies and “produced” screenwriters in often futile searches for superior movie concepts. RSL has already written developed a superior slate that was specifically written with the RSL vision and criteria in mind. The slate is designed to launch up to nine major franchises that will serve as a compelling foundation for a successful IPO profile that will deliver extraordinary ROEs to RSL investors.

RSL Movies in Development

The sourcing and development of compelling story content that will attract large global audiences is the greatest challenge of the movie industry. Story sourcing in “Hollywood’ is an incestuous and closed system where even the best ideas too often get lost in the exclusionary legal and cultural imperatives that prevail in the industry. The result of this obsolete and ineffectual process is shallow, stale and uninspiring content with very limited resonance elements beyond gratuitous action, violence, sexuality depravity, horror and computer generated effects.

It is especially difficult to acquire stories that match the vision of RSL because 1) the story structures and thematic elements are outside the “Hollywood” mainstream and 2) the multitude of market and global audience resonance elements that are required to met RSL’s standards. As a result, RSL has adopted a policy of writing and developing all of its own content to match RSL’s stringent content requirements and its filmmaking vision, business plan, investment goals and capital markets strategy.

RSL is not a theory in search of strong projects to produce. RSL has written and developed a compelling slate of 14 major film projects that meet all of RSL’s criteria. They are designed to launch up to 10 different film franchises in five different genres, They can all be produced on production budgets of less than $30 million each and are all crafted to resonate with numerous resonance elements that will inspire very large international audiences. Please consider these compelling concepts relative to common “Hollywood” films: Please visit the link below on the RSL website for a summary of the 14 RSL movie projects: http://www.renaissancestudio.org/movie-projects.html

Please visit the links below for video synopses on the two films that will launch 2 major film franchise trilogies that will serve as cornerstones for the new RSL studio:

• Michelle Burns - “Divided We Fall” - https://www.youtube.com/watch?v=dF-prvbwISQ

• Arielle DeNovo – “America 2.0” - https://www.youtube.com/watch?v=Lcgqff0Atkg

Imagine these choices on a movie marquis to see the potential of the RSL vision. RSL believes that all of these projects compare very favorably to ANY film in theaters today.

These well diversified, high concept projects are designed to appeal to the very large "disaffected" audiences by engaging the most important social and political issues of the modern world in profound and poignant ways.

All of these triumph of the human spirit stories are imbued with a multitude of intellectual, emotional, visual, audio, sensual, visceral, artistic, humor and romantic resonance elements that drive large international audience attendance. Each one of them has strong potential to drive sustainable film

78 franchises that are key to creating the optimum IPO profile that will unlock a multi-billion dollar ROI in year 5.

These screenplays are not random projects discovered through deeply flawed “Hollywood” script evaluation techniques. Each of these exciting motion pictures is carefully crafted to match the RSL vision of modest budget films that are designed to inspire large international audiences and deliver superior ROEs to insightful investors. Collectively, they represent a very sound foundation for launching a new paradigm in filmmaking and investment.

The log lines on the RSL films might reveal story elements that seem familiar but please consider the following before reaching any conclusions:

• All of these original scripts include triumph of the human spirit stories in which very courageous people overcome personal tragedies and extreme obstacles to achieve great things. • RSL believes that films can effect positive social and political changes and make the earth a better place. Accordingly, all RSL films address the most important issues of our times with a goal of illumination that stimulates reconciliation through higher awareness. • Realistic progressions are key elements to every story. Artistry and romance enhance the appeal. • Beneath almost every major plot progression is a positive theme that transcends cultures. • Every story is designed to affect the human heart, mind and spirit in profound and emotional ways. • None of these stories requires huge expenditures on special effects or "STAR" talent to succeed. Advanced drafts of these compelling screenplays are all completed and RSL is currently sourcing capital and production partners for final development and production.

Project Business Plans

Short form project business plans are available for review at the links below. These plans will be dramatically enhanced once the primary capital is committed but they are useful points of reference in their current form.

• “America 2.0” http://nebula.wsimg.com/6071266be8e953589cd5675cca9bc7fb?AccessKeyId=9E533268DA51246E F35E&disposition=0&alloworigin=1

• “Divided We Fall”

http://nebula.wsimg.com/976f4ec864a18e12d92957267d71de51?AccessKeyId=9E533268DA51246E F35E&disposition=0&alloworigin=1

• “Revelations”

http://nebula.wsimg.com/8d411e1b11802ec08387e9445d5c5395?AccessKeyId=9E533268DA51246 EF35E&disposition=0&alloworigin=1

• “End Game”

http://nebula.wsimg.com/7ae4a19115c4c9df5f260004543726a8?AccessKeyId=9E533268DA51246E F35E&disposition=0&alloworigin=1

• “Insurrection”

http://nebula.wsimg.com/dcff37ce7e35faae8d19d060162d2d12?AccessKeyId=9E533268DA51246EF 35E&disposition=0&alloworigin=1

Are RSL Movie Projects Really Better?

A vital key to the success of the RSL business plan is the ability to produce films that will attract very large global audiences. RSL’s strategy is to produce movies that have very strong points of positive differentiation from the films that are being produced by “Hollywood” studios and “Indie” producers. The goal is to produce motion pictures that will attract the very large “disaffected” audiences who very seldom go to theaters because they are not inspired by the movies that the studios and producers are creating.

RSL believes that there is a large void of exciting films with content that is intellectually and emotionally engaging and life relevant. Accordingly, all of RSL’s films are set in modern times and address subject matter that is compelling and relevant to audiences on a real world and visceral level. These are movies that engage the heart, mind, emotions and spirit while illuminating compelling perspectives on the modern world that transcend cultural differences with the goal of contributing to greater understanding and less conflict.

There is no empirical way to prove that RSL films are better until they are produced and attract large audiences. Therefore, the best approach to assessing the likelihood of achieving box office success is to compare the RSL projects to films that are currently showing in theaters. RSL believes that the simple comparison below will illuminate very positive points of differentiation from the movies that are recently in the theaters. Please review the summary below with a focus on: • How well the subject matter and budgets compare to the current films? • How likely it would be that global audiences would be inspired to go to the theater to see the films? • What is the intuitive potential for superior ROEs on each film? • What is the likelihood that each film will serve as a basis for a film franchise? • Which films would inspire you and those you know to go to the theater?

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80 RSL Slate Recent Box Office Top 11

“AMERICA 2.0” - Thriller - Action - Artistry The Other Woman - Comedy Budget - $30 million Budget - $40 million A hyper-intelligent young woman devises a complex Thee women conspire against one man who system to save America and humanity from itself is cheating on all of them

“Revelations" - Drama - Thriller - Romance – Artistry Captain America – Winter Soldier - Action Budget - $27.5 million Budget - $170 million An American guy and a Russian phenom discover a 3 super heroes battle a bad guy who leads a love that transcends the Cold War conspiracy against the USA

"Divided We Fall" - Action - Thriller - Romance Heaven Is For Real - Spiritual drama Budget - $30 million Budget - $12 million A brilliant CIA analyst races to stop a plot by rogue A young boy survives a near death Iranians to devastate America experience to talk about heaven

“End Game” - Sequel to "Divided We Fall" Rio 2 – Animated Adventure Budget - $30 million Budget - $130 million An American heroine and a female Iranian assassin Animated birds try to make a home in the overcome extreme hatreds to create peace Amazon jungle

“Insurrection” - Sequel to “End Game” & Brick Mansions - Action “Revelations” Budget - $30 million Budget - $28 million Michelle Burns leads the conversion of the USA and Bad guys fight it out with good guys in Russia from hostile adversaries into allies dystopian Detroit

"Metamorphosis" - Action - Thriller - Romance Transcendence – Thriller - Suspense Budget - $30 million Budget - $100 million A Riviera singer outwits a ruthless Mediterranean Johnny Depp’s artificial intelligence crime family to survive & fulfill her dreams experiments go very wrong.

"Mastermind" - Action - Thriller - Suspense The Quiet Ones – Horror Budget - $30 million Budget - $10 million (Est. Not Public) A female French agent and an ex-CIA head case battle A London Professor and his class examine modern Gabriel to avoid the apocalypse a girl with terrible secrets and get horror

"Not Without Honor" - Action - Thriller - Romance Bears – Nature Adventure Budget - $27.5 million Budget - Unknown A 9/11 survivor becomes a troubled war hero caught in A Disney nature film about bears the web of a criminal psychopath

"The Coming" - Action - Thriller - Spirituality Divergent – Youth – Dystopian Adventure

81 Budget - $27.5 million Budget - $85 million A Christ like figure appears to stop an Armageddon Young adults fighting to survive in scenario and unleash a new age of peace and prosperity dystopian Chicago

“Donahue - Origins” - Action - Thriller - Romance Draft Day – Sports Drama Budget - $30 million Budget - $25 million A rogue CIA agent races to stop a psychopath from A story about an the Cleveland Browns seizing Pakistan's nuclear arsenal general manager on NFL draft day

“Treachery” - Action - Thriller – Spirituality - Artistry Amazing Spiderman 2 - Action - Superhero Budget - $30 million Budget - $200 million Arielle & Talia race to stop a rogue American Spiderman returns again President who is unleashing global anarchy

The purpose of the chart above is to highlight the sharp and positive contrasts between the RSL slate and the shallow and narrow market movies that “Hollywood” is producing that have no hope of reaching the huge “disaffected” audiences. None of the “Hollywood” movies above offers a compelling, life relevant and emotionally engaging concept with characters that will inspire very large international audiences.

As a simple exercise, check the films on the chart that you believe large numbers of people across the earth would want to see.

The Michelle Burns Trilogy – The RSL Launch Franchise

Every new enterprise requires a compelling launch premise. In the realm of film, multi film “franchises” based on progressions of the same characters through a series of films have been among the most successful from a financial perspective. A review of the financial performance of films over time indicates that the action/adventure/thriller genre has proven to be the most consistently successful. Within that genre, the “James Bond”, “Mission Impossible” and “Jason Bourne” franchises have been very successful by focusing on the modern world of espionage and other clandestine activities.

Given the strong profile of this genre, RSL has elected it as the market entry point to optimize and confirm the cinematic, box office and financial viability of the RSL business strategy. Rather than directly emulate the profiles of these previous franchises, RSL has elected to fill the great void of female protagonists in the genre around a character named Michelle Burns. This strategy is grounded in the following concepts:

• Introduce Michelle as a strong female lead protagonist in the “James Bond”, “Jason Bourne” and “Mission Impossible” genre. • Make Michelle a compelling character who evolves from an attractive and hyper-intelligent CIA analyst into a feminine force of nature who takes on and resolves the biggest geo-political issues of the modern age with her superior intellect and resourcefulness.

82 • Ground the stories is plausible real world scenarios rather than typical and shallow “Hollywood” contrivances. • Make her mind, her cunning, her higher awareness and her resourcefulness her primary weapons instead of car chases, martial arts and brute force. • Use these alternative attributes as a basis for reducing production costs while reaching the much larger “disaffected” audiences who saw less than 3 movies on average in theaters in 2011. These discriminate audiences want to be inspired, illuminated, and mentally challenged in addition to visually entertained. • Allow Michelle to have much broader emotional range that creates a profound emotional engagement with the audience. Use this and her physical beauty, intellect, courage and resourcefulness to captivate audiences in a broad demographic range. • Project Michelle as a very strong modern feminine role model for young women to admire and emulate versus the too often negative stereotypes perpetuated by “Hollywood”. • Focus on very realistic modern world geo-strategic threats as the context for the antagonists rather than contrived Hollywood bad guys with shallow motivations. The Michelle Burns Trilogy currently consists of the following completed screenplays in sequence: • Divided We Fall • End Game • Insurrection

RSL intends to add additional films to this sequence to build an enduring female American "James Bond" type franchise that involves the most important real world geopolitical issues of our time with realistic characters that inspire exciting emotions. “Insurrection” is also a sequel to “Revelations” that combines the two story lines and characters in a compelling way. This crossover of franchise approach was very successful in “The Avengers” in 2012.

The “Michelle Burns” Character Profile

Modern cinema and culture are largely devoid of exciting and positive feminine protagonists & role models. Michelle Burns is designed to display the most positive attributes of modern femininity as a means to attract large audiences: • Extraordinary intelligence & insightfulness • Captivating and sophisticated natural beauty • Exudes an irresistible but subtle sensuality • Higher awareness in all things - prescient • Strong & insightful leadership skills • High educational & professional achievement • Emotional maturity & Insightful life priorities

83 • Great emotional depth & range • A compelling presence that transcends beauty • Romantically reserved but not invulnerable • A force to be reckoned with on all levels • Extreme courage & determination • Not into materialism or superficiality • Awe inspiring in the totality of her persona

While the above profile may seem impossible in the real world, cultural transformation often begins with the appearance of extraordinary characters that can reset cultural norms & expectations. Men, women and young adults are naturally attracted to all these attributes in women. These traits will also transcend cultural differences to attract global audiences.

Michelle is a character than men & women will enjoy and want their daughters to emulate. This is the foundation of her powerful cinematic appeal.

“Revelations” - Transcending Political Differences Through Romance & Artistry

"Revelations" is a romantic political thriller that exemplifies RSL's strategic vision. It is the epic story of a wealthy American guy and a Russian artistic phenom who meet in Volgograd in 1979 where they make a powerful romantic connection that transcends the Cold War and the turmoil that follows. Politics tears them apart for over a decade, but they are reunited in the tumult of post soviet Russia where they become pawns in a violent political conspiracy that they must defeat for a chance to share a life together.

“Revelations” contains a proven cultural immersion story structure similar to "Dances With Wolves" and "Avatar", two of the most successful film investments of all time. It tells the compelling story of the heroic soviet people and their fight for freedom and prosperity that brought an end to the USSR. It is also the ultimate love conquers all story that explores deep romantic intimacy and symbolizes the great missed opportunities between the USA and Russia.

It includes awe inspiring music and performance artistry as well as a powerful emotional progression that is designed to illuminate and engage the human heart, mind and spirit in compelling ways. The total production budget is less than $20 million with huge global revenue potential.

“AMERICA 2.0” – A Powerful American Reality Check

“AMERICA 2.0” is an artistry driven political thriller that focuses on a hyper intelligent young woman named Arielle who achieves awe inspiring artistry in every realm she attempts. Discovery of her extreme intellect by powerful adversaries forces her artistry into the scientific and geopolitical realms. The story evolves into a riveting political thriller with the most powerful and relevant end game ever conceived in a screenplay.

84 "AMERICA 2.0" is designed to reveal the power of exalting performance artistry as a basis for an evolution into artistry in the scientific and political realms. The film contains a multitude of action, performance artistry and thriller scenarios that engage the audience on cerebral, visual and emotional levels.

The surprise end game of the film exposes and resolves the most difficult political issues of our time by elevating them into the realm of artistry. The goal is to inspire the audience with the extraordinary things that can be achieved in any realm when people refuse to settle for less than artistry.

"AMERICA 2.0" is designed to be a transcendent audience experience on intellectual, political, scientific, spiritual, emotional and artistic levels and to introduce the viewer to a higher awareness. The project execution must challenge the skills of the world’s top actors, artists, composers, musicians, singers, acrobats, contortionists, gymnasts, dancers, divers, choreographers, ice skaters and production teams. It is not hyperbole to suggest that this film will elevate the careers of everyone who is associated with the project because it will expand the horizons of artistry on so many levels.

The profound endgame of “AMERICA 2.0” addresses the most important political and social issues of the modern world in a way that illuminates a path to a national reconciliation that benefits all Americans and the world beyond. This film represents a unique opportunity to demonstrate that a national consensus can be achieved in the higher realm of political artistry that makes our senseless liberal versus conservative conflict irrelevant. Film is perhaps the only medium where this higher awareness can be conveyed. The hope is to inspire Americans to start demanding excellence of themselves and their government.

The unique cinematic experience of watching this woman's beautiful mind and artistry unfold in her determined quest for freedom and then global political transformation will have a profound effect on almost any audience because it is a powerful metaphor for their own lives.

“Treachery” is the compelling sequel to “America 2.0” and the most recent addition to the RSL slate. It is a projection of a terrifying scenario that could plausibly unfold if a rogue American president came to power. Arielle and her sister Talia are all that stands between humanity and catastrophe.

The Movie Market Opportunity

Almost everyone in the developed world has had a relationship with movies all their lives. Almost everyone enjoys attending a great movie. Virtually everyone has experienced the recurring feeling of wanting to go to a movie and reviewing the movie listings and being unable to find a single film that inspires their interest. Of deciding to take a leap of faith to go to a film that might be interesting only to be disappointed. Of sitting through two hours waiting in futility for the movie to inspire their heart, mind, emotions or spirit in some enjoyable way. Of wondering why there are so few great movies. The result of these feelings is large segments of people reducing movie attendance or abandoning it all together.

All of these familiar feelings are the end product of a movie industry that has largely lost connection with what audiences want to see in the theater. This problem can be traced to:

• Failed story sourcing and development practices that neither recognize nor respect the great art of compelling story telling. • A failure to properly value, develop, direct and compensate screenwriters for the value they create. Is it a surprise that the quality of movies has deteriorated along with screenwriting compensation? • An industry mindset that does very little effective market research and has very little respect for the intelligence of their audiences or concern for their preferences. • Business practices that have little regard for investors or developing great stories that will appeal to broad demographics and global audiences, and produce superior rates of return. • Failing to design and produce movies that inspire and illuminate as well as entertain. • A failure to create entertaining and relevant story scenarios that are a positive escape from the difficult realities of the modern world. • The prevalent belief that special effects and actor personalities are a good substitute for great stories. • A focus on films that are designed to appeal to repetitive youth and indiscriminate audiences. • Investment reliance on “A List” talent preferences rather than sound market research on audiences.

There may be no industry on earth where there is a bigger disconnect between the product and its potential market, or less concern for optimizing the market penetration or income potential for the capital investors. This strange reality is a problem but it is also a huge opportunity for exploitation by sophisticated story development entrepreneurs and strategic investors.

RSL has been founded to create fundamentally different approach to movie making that focuses on maximizing the size of global audiences, minimizing costs of production and providing transparency and reliably superior rates of return to investors.

86 The Market Entry Premise

Creating Points Of Positive Differentiation

RSL will be competing with major studios that have enormous capital and human resources as well as long track records, major brands and broad infrastructure in place. The great vulnerability of the major studios is their commitment to failed story development, culture and business practices that consistently fail to inspire large global audiences. Studios are also burdened with very bloated overhead costs and a strategy of creating ever fewer films with ever larger budgets that all too often rely on visual effects rather than superior stories. This approach has the effect of concentrating market acceptance risks in fewer projects and represents a business strategy that is almost certain to fail in the long run as demonstrated with the multitude of major film projects that have failed in the last two years.

To achieve market entry against much larger and well established competitors and deliver superior ROI success, RSL must offer strong points of positive differentiation from the entities that they will be competing against. Accordingly, the RSL business strategy focuses on creating these very positive points of differentiation through its innovative approaches to story development, business practices, marketing and distribution.

The sourcing and development of prescient and poignant stories that can be produced on modest budgets and resonate with very large global audiences is the most important factor in creating superior ROEs in motion pictures. RSL will have a major competitive advantage versus the industry based on the following points of positive differentiation from the “Hollywood” studios:

“Hollywood” Studios Profile RSL Profile • A very mature business model that typically • A modern and innovative business model that makes makes big budget movies that only narrow modest budget movies that large global audiences audiences want to see. want to see. • An insular story development culture that • An insightful story development system and culture limits innovation while it systematically that encourages innovation and demands that ignores audience preferences. projects target large global audiences. • Denigrates the value of writers rather than • Nurture, develop, inspire, respect and reward writers inspiring them, respecting them and for creating stories that can be produced on modest offering them rewards that match their budgets and resonate with large global audiences value creation. and deliver superior ROEs. • A system that consistently produces • A system that targets the over 89% of “disaffected” products that do not match the preferences movie goers who want to be inspired and of over 90% of its potential markets. emotionally engaged as well as visually entertained. • Story development that focuses on deeply • Story development that focuses on creating awe flawed and shallow “coverage” metrics inspiring, triumph of the human spirit films that

87 rather than global audience preferences. large global audiences want to see. • Rely on costly action sequences and CGI to • Rely on cost effective stories that powerfully engage create visually stimulating films around the human heart, mind and spirit without costly superficial stories. visual effects. • Story structures built on shallow characters • Story structures that are built around compelling and contrivances that emphasize visual stories, characters and real world scenarios that effects over story resonance elements. emotionally and intellectually resonate. • Distribution metrics that focus on costly • Distribution metrics that focus on the quality of the acting talent attachments rather than the story elements, writing and global audience appeal. quality of the story and global audience Recognition that there are many great actors who appeal. This persists despite the fact that the can execute a well crafted film to reach superior acting talent has almost no correlation to ROEs at a low cost point. investment ROI success. • Create shallow and dark films that rely on • Create triumph of the human spirit stories that gratuitous sexuality, action, violence, horror address the most important issues of our time and and depravity and avoid the biggest issues engage audiences on intellectual, emotional, of our time. visceral, sensual, romantic, artistry, audio and poignant levels. • Exploit negative culture and role models for • Project positive culture and role models for adolescents. adolescents. • Films that too often fail to inspire audiences • Films that inspire large audiences to go to the to go to the theater and fail to reward them theaters and deliver a movie experience that exceeds if they do. their expectations. • Films that consistently lose money for • Films that consistently deliver extraordinary ROEs investors. to investors.

The table above could be extended considerably with the positive contrasts between the two visions. The important takeaway is that there is a large opportunity to create films that inspire the huge “disaffected” global audiences who seldom find inspiration in anything “Hollywood” is producing. These contrasts represent a huge exploitation opportunity for insightful investors and Ardmore. You have to look no further than the current movie listings versus the RSL slate to understand the reality of this opportunity. Independent (“Indie”) filmmakers attempt to challenge the studio system with small films that are produced on modest budgets that may tell interesting stories. However, they are targeted at small target audiences and seldom achieve the goal of reaching large theatrical distribution to domestic and international audiences that drive superior ROEs. Investing in the almost 12,000 Indie films that are produced each year with a .1% chance of reaching theaters is not a business model that should inspire any investor. These positive points of differentiation for RSL are key to inspiring audiences and capital partners to invest in the RSL vision. They also represent reasons for optimism that RSL can succeed in raising capital and delivering consistently superior ROEs.

88 The RSL Screenwriting Advantage The reality is that the RSL author has a very large and diverse life experience that is a strong resource for writing that almost all conventional screenwriters do not possess. Almost all screenwriters create stories in the theoretical sphere while RSL creates stories that spring from actual life experience and modern realities that are largely lost in the fog of political and industry distractions.

Almost all conventional “Hollywood” screenwriters are forced to write within the "Box" of conventional and deeply flawed “Hollywood” thinking. Almost none possess the concern or skill sets to write films that can be produced on modest budgets and appeal to large global audiences.

The RSL writer has been writing movie screenplays for over twenty years that are designed with the RSL commercial attributes in mind. The only reason they have not been produced is that the writer has been too involved with their primary capital markets career and the industry story development practices are designed to exclude material that dies not fall within the confines of the failed industry status quo.

It is almost impossible to produce a great movie within the existing “Hollywood” culture because it excludes almost anything that is entertaining to very large global audiences. Yes, this seems amazing but a visit to the current movie listings will verify this assertion. “Hollywood” has no clue how to consistently create great movies and seems to have a gift for creating movies that almost no one wants to see. This irrational reality is the great opportunity that RSL is designed to exploit.

The RSL Investment Accessibility Advantage There is virtually NO venue other than RSL where equity investors can access 1) the strong content, story structures and modest budget projects that are specifically designed to appeal to very large global audiences and 2) a compelling approach to creating an IPO profile that can access the 100x to 300x P/E ratios in the public markets. These are the key features that drive extraordinary ROEs for hard equity investors. The most brilliant financial structures are only as good as the stories themselves. No amount of financial engineering will ever turn an average or worse story into a great equity investment in this industry. There may be no other channel than RSL that is open to independent investors to access the great stories that drive superior ROEs. RSL is a unique source of great stories that are key to reaching large global audiences on modest budgets.

A combination of insightful financial resources and RSL's business plan and projects creates a very powerful equity investment profile for those who invest the time to fully understand RSL vision.

Social Conscience – Creating A Positive Alternative Sociopolitical Narrative Though Movies Almost all humans share a common desire to live in peace, liberty and prosperity but the world is immersed in economic stagnation, political strife and social decay. RSL asserts that movies are a powerful medium to effect positive social, economic and political change and that engaging the most important issues of the modern age in productive and non-partisan ways is a path to improving the human

89 condition and consistent financial success in filmmaking. RSL films will resonate with people of all ages and cultures who value positive insights in a difficult world. All RSL films will be triumph of the human spirit stories that inspire and illuminate as they entertain.

• America languishes in economic stagnation, increasing poverty and social decline as over 92 million adults are out of the workforce and personal wealth deteriorates. • America’s education systems increasingly produce multitudes of government dependents rather than legions of super achievers that can succeed in an ever more competitive global economy. • America’s government has become an ever larger consumer and re-distributor of wealth and prosperity rather than an efficient facilitator of a free enterprise economy that produces greater prosperity for all. • The USA is rapidly retreating from its global responsibilities and this is contributing to an ever increasing series of conflicts across the globe. • Global economies are languishing in stagnation, debt and entitlement problems that are suppressing economic prosperity and fostering economic despair that drives conflicts. • The fabric of modern civilization is under siege by the rise of amoral depravity as positive social norms are overwhelmed by negative cultural forces. • After 15 years of war and sacrifice, radical Islam is more dangerous than ever. • Senseless religious conflicts increasingly threaten humanity. • Self-serving political differences prevent government by positive consensus to the detriment of all. • In Russia, the hope of liberty and democracy has receded into wanton corruption and destructive nationalism that is returning the earth to senseless and destructive geopolitical conflict. • Russia is ruthlessly annexing portions of its neighbor countries without serious consequence. • NATO is about to abandon Afghanistan to the Taliban and al Qaeda as nuclear Pakistan is increasingly consumed by political strife. • China is beginning to aggressively assert its influence in Asia beyond its borders. • Modern media focuses almost completely on the negative aspects of humanity. Modern movies are too often driven by gratuitous violence, sex, substance abuse, horror and depravity.

Despite the above realities, almost no one is offering a positive alternative narrative or lighting a path to a better world. Younger generations are growing up in a world where there are increasingly few positive role models and narratives to challenge the overwhelming negative narratives of world conflicts, stagnant economics, crime and modern cultural decline. RSL is grounded in a desire to create films that make a positive social impact in a difficult world and the RSL film slate is one avenue for accomplishing that goal. “AMERICA 2.0”. “Donahue – Origins”, ”The "Michelle Burns" trilogy, "Revelations", “The Warning” and "The Coming" are all films that are designed to illuminate the realities of the most important geopolitical issues of our age and offer a positive alternative narrative.

These films illuminate common sense solutions to the issues behind the destructive issues and conflicts that persist in the USA, the EU, the Middle East, the Far East and Russia to our collective detriment. Lighting a realistic path to resolution of those conflicts through RSL films could be one very important way to redirect global societies to reach their full economic potential through cooperation rather than conflict. This is also a key element in transcending cultural and demographic differences to inspire global audiences to go to movies and thereby deliver consistently superior ROEs to RSL investors.

RSL is dedicated to the belief that motion pictures can illuminate a path to a much better world.

Movie Industry Overview

Movies may represent the most lucrative and unexploited investment profile in the capital markets.

• The movie market is huge and global with large groups of consumers that are not being targeted • The only practical limit on product demand is the supply of quality products • Perhaps no industry offers the potential for faster returns of capital or higher returns on investment • Barriers to market entry are low compared to other industries

Please consider these Motion Picture Association of America (“MPAA”) statistics from 2015 that can be found at the link below: http://www.mpaa.org/wp-content/uploads/2016/04/MPAA-Theatrical-Market-Statistics- 2015_Final.pdf

• 90% of citizens (309 million) in USA - Canada saw about 2 movies in theaters on average in 2015 • 31% of citizens (105 million) in USA - Canada saw no movies in theaters in 2015 • Total admissions in USA - Canada have fallen 16% from 1.57 billion in 2002 to 1.32 billion in 2015 • 10% of citizens (34 million) in USA - Canada saw 49% of the movies in theaters in 2015 • The USA – Canada proportion of the global market was up 1% to 29% in 2015 • 708 films were released in 2015 but the top 25 films made up 55% of box office revenues in USA - Canada • Only 6 of the top 25 domestic grossing films in 2015 were R rated - only 1 was in the top 15

Several RSL observations on this data:

• There are huge numbers of people who do not attend movies often: Disaffected audiences • There are sound reasons to believe that low movie attendance is directly related to poor movie content • The movie industry is highly focused on creating films for the 10% who are frequent moviegoers • There is reason to believe that frequent movie goers go to the theater more often because the industry produces more of the gratuitous action/violence/computer generated effects films that they prefer. The inverse is very likely true for the other 90% of infrequent movie goers. • Hollywood systematically ignores the story preferences of huge potential global audiences • Films that ignore international audiences miss over two thirds of their revenue potential • Making R rated films is not the best path to reaching huge box office revenues and investor returns

RSL believes the movie industry is falling far short of its full market potential because it is plagued by unsound story development and business practices that result in large disaffected audiences and

92 disillusioned investors. RSL was founded on the premise that sound business principles can be applied to develop modest budget movies with broad demographic and global market profiles that mitigate the inherent risks of movie investing and offer huge rates of return on investment. The only major constraint on market demand is the quantity of quality market supply. RSL is convinced that the demand for high quality movies remains strong, but the supply of quality films has perhaps never been lower than it is today. Therefore, the timing could not be more ideal for the entrance of a sophisticated business strategy that exploits the flaws and opportunities that are readily available. This plan should focus on developing strong story content that appeals to global audiences and can be produced on modest capital budgets. It should also offer investors multiple investment profiles and complete transparency and honesty on budgets, costs and revenue streams. RSL has been formed to offer sophisticated and insightful strategic investors the opportunity to invest directly in very well conceived movie projects with very high investment success potential.

Movie Industry Fundamentals

The Motion Picture Association of America (“MPAA”) compiles annual statistics on movie attendance and revenues. Below are a few key excerpts:

USA/Can. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Tickets (Billions) 1.49 1.40 1.41 1.40 1.39 1.42 1.34 1.28 1.36 1.34 1.27 1.32 % Change (4%) (6%) 1% (1%) (1%) 2% (4%) (4%) 6% (1%) (5%) 4% Revenue (Billions) $9.27 $8.95 $9.25 $9.63 $9.95 $10.6 $10.6 $10.2 $10.8 $10.9 $10.4 $11.1 % Change (1%) (3%) 3% 4% 3% 7% 0% (4%) 6% 1% (5%) 7%

Source: MPAA Statistics There are several important takeaways from this USA/Canada data: • Admissions have fallen 11.5% from 2004. • Despite falling admissions, revenues have grown by 20% since 2004 through higher ticket prices. • Total revenues have been essentially flat over the last seven years. • It appears that higher ticket prices may no longer be able to offset falling admissions. • The overall population has grown over 10% over the last 11 years. • Clearly the demand for movies has been stagnant over the last 11 years. The key question is whether falling admissions are a function of declining core demand for movies or increasing disaffection with the movies that “Hollywood” has been producing. RSL believes that there is a strong likelihood that the latter is the case.

93 Key Audience Data

Almost every person who scans movie listings understands the recurring frustration of wanting to go to a movie and being unable to find a film that inspires their interest. RSL believes that there are large movie audiences that never make it to the theater because they cannot find a film that captures their interest or imagination. RSL feels this large “hidden” audience represents a lucrative investment opportunity for investors who finance films that inspire audiences on an emotional, intellectual and spiritual level. Please consider the following data that supports the potential size of the “hidden” audience:

Description Quantity Quantity % Total % Total Average 2015 (Millions) % (Millions) Movie Tickets Tickets Annual USA + Canada Population Movie Goers Goers Tickets Moviegoers 235.0 69% Indiscriminate 34 14% 647 49% 19 Discriminate 201 86% 673 51% 3.3 Non- 108.0 31% 0 0 moviegoers Total 343.0 100% 235 100% 1,320 100% 5.6

Source: MPAA Statistics 2015

There are several important takeaways from this USA/Canada admissions data: • 31% of the potential audience has stopped going to movies in theaters all together. • 86% of movie goers are seeing only one movie every four months on average. • 84% of the actual movie going audience is only seeing one movie every 3 months on average. • The 14% of frequent moviegoers are seeing 1.6 movies per month. “Hollywood” studios have become almost completely focused on catering to the indiscriminate but frequent moviegoer audience while largely ignoring the preferences of the much large discriminate audiences. Thus the endless parade of very expensive movies with superficial stories and heavy special effects. A key question is whether or not movies can be produced that will stimulate much larger attendance by the discriminate and non-movie going audiences. RSL believes the answer is yes and its entire business strategy is designed to exploit this opportunity.

Key Audience Profiles

RSL believes that potential movie audiences are divided into three primary categories:

• Indiscriminate - Frequent

• These are avid moviegoers who bought 49% of actual tickets sold in 2015.

94 • They attend 1.6 movies on average in theaters each month. • They tend to be genre rather than content focused and are generally content with superficial and special effects driven stories. • They are largely under 40 years of age. • They total 10% of the population but they purchased 49% of movie admissions in 2015. • They are “Hollywood’s” almost exclusive target market.

• Discriminate - Infrequent

• This group of people is seven times as large as the indiscriminate - frequent moviegoer audience. • They must be inspired by the premise, the themes or the content of the story to go to the theater. • They tend to be older and more mature/sophisticated on average than indiscriminate moviegoers. • They make up 86% of the moviegoer population but only bought 50% of admission in 2015. • They attend movies once every 3.6 months on average. • They attend movies infrequently because their preferences are largely ignored by Hollywood.

• Non-Moviegoers

• This group is over 3 times as large as the indiscriminate – frequent moviegoer audience. • Their profile can be any age of people and they are much like the infrequent group but they are even more discriminate about movies. • These people have checked out of movie going in large part because there is nothing in the theaters that they want to see. • They have seen all of the “over the top” car chases, action sequences and special effects that they ever want to see. “Hollywood” ignores their preferences so they are ignoring “Hollywood”. RSL cannot support all of the above assertions with hard data but RSL believes that all of these assertions will be intuitively correct to anyone who observes the movie industry as a potential moviegoer. “Hollywood” simply does not do a good job of making movies that a lot of people want to see. This is in large part because they have become almost completely focused on serving the very small subset of frequent and indiscriminate moviegoers to the exclusion of much larger potential audiences. RSL believes that it is intuitively reasonable to assume that most members of the discriminate movie going universe would prefer to attend a movie at least once a month and perhaps as often as twice a month or more if there were films that stimulated their interest. While the rising cost of tickets is a minimal deterrent factor, RSL believes that the primary impediments to a dramatic increase in movie attendance and revenues are:

• The formulaic and superficial quality of the movies that Hollywood is producing. • The exclusionary story sourcing and development practices of the film industry. • The mismatch between the films “Hollywood” is making and the films audiences want to see.

95 • The absence of a dynamic investment capital raising system in the industry. In theory, the only practical limitation on global box office receipts is the ability of the film industry to deliver quality films that attract audiences. From this perspective, very large box office revenue opportunities are being missed by flawed capital raising, business, marketing, creative, development and production processes in the film industry that consistently create superficial films that seldom inspire more than indifference in many potential moviegoers.

The International Box Office Opportunity

Non-USA/ Canada 2007 2008 2009 2010 2011 2012 2013 2014 2015 Revenue ($Billions) $16.6 $18.1 $18.8 $21.0 $22.4 $23.9 $25.0 $26 $27.2 As % Global Box office 63% 65% 64% 66% 69% 69% 70% 72% 71%

RSL believes that most of the international growth is largely related to the rapid expansion of new theaters, especially in Chian. International box office revenues continue to be above 2/3 of total global receipts. Therefore, it is important to design films that will appeal to international audiences where 71% of revenues are originating. “Avatar” was the largest grossing movie ever on a global basis: “AVATAR” Revenues Amount % of Total Domestic USA Box Office $ 750 Million 27.7% International Box Office $1,959 Million 72.3% Total Revenues $2,709 Million 100.0% USA DVD Sales $ 142 Million Revised Total Revenues $2,851 Million

This data firmly establishes the reality that the international market for films is much larger that the domestic USA/Canada markets. Therefore, films that can appeal to international markets by transcending cultural barriers can realize many multiples of their domestic USA box office potential. RSL believes that the same film industry flaws that are suppressing domestic USA movie attendance are an even bigger box office suppression factor in the much larger international markets. 2015 was the highest grossing year in global box office history with $38.3 billion of global ticket sales, up 5% from 2014. USA/Canada ticket revenues also rose 4% to $11.1 billion. While the economy remains sluggish, RSL believes that that the slow growth in ticket admissions and revenues is more reflective of the uninspiring quality of Hollywood productions that are not well designed to inspire large disaffected audiences to go to the theater. RSL believes that higher quality film content can further raise the ceiling of audience attendance, revenue and investor income.

96 Keys To Film Investment Success The history of film shows that the most successful production companies have matched superior film content and production execution with powerful global distribution networks. Despite the recent poor performance of the global economy and the capital markets, selective film investors can enjoy very attractive ROEs when they correctly assess the quality of the individual projects and the strength of the production and distribution teams. A soundly structured film project can represent a very attractive investment opportunity relative to almost any other investment option in the current economy.

RSL seeks to break through the self imposed creative and entertainment ceiling of Hollywood to create more memorable and epic cinematic experiences that explore compelling and relevant themes and positively affect the audience’s thinking on important subjects beyond the theater. RSL also intends to execute all these film projects on modest budgets that will position them to achieve superior risk adjusted rates on return for investors.

Movies Remain The Best Entertainment Value By Far The following data from MPAA for 2015 demonstrates that movies remained the most cost effective entertainment alternative for a family of four in 2015: Average Family of 4 Admission Costs

Movies $ 34 MLB $116 Theme parks $209 NBA $216 NHL $249 NFL $343 These major differentials in costs make movies the most cost effective form of family entertainment outside the home. This reality further illuminates the huge potential of well-conceived and marketed movies that are crafted to attract large audience with superior story content.

The Existing Movie Investment Profile

An objective investment analysis of the industry would reveal huge investment return opportunities and substantial risks and industry flaws that must be successfully exploited and managed to achieve superior rates of return on invested capital. Please consider the following data points:

Movie Investment Profile Positives

• A huge international consumer base Almost everyone in the developed world has had an ongoing relationship with the movie industry. Most people across the earth enjoy going to movies for a low cost source of entertainment and as an escape from the realities of a difficult world. • An attractive industry profile Movies are a $120 billion global industry annually with strong growth and investment return potential. The only major limitation on revenues and income is the supply of a quality product, not the demand. • Untapped market potential Product quality is the only major constraint on consumer demand. The volume of customers in this industry is huge, global and eager for improved product quality. People would go to movies a lot more often if there were more great movies to see. There is perhaps a $70 billion reservoir of untapped demand for quality films. • Manageable issues Product quality can be affected by skilled professionals and sound market research that drives story development to appeal across demographics and global cultures • Low barriers to entry Barriers to entry into the movie industry are low relative to most industries. All that is needed is a great story, a quality production team, an insightful investor and the business acumen to execute a successful business, risk management and distribution plan. • High cost/vulnerable competitors It is a very mature industry that is dominated by large companies with very high costs of production, and an ever-diminishing ability to develop high quality products on a cost effective basis. • Competitors failing to serve the market Many people have stopped going to movies because the product quality is so consistently poor. This reality is the result of a systemic disconnect between the product preferences of movie producers and global audiences. This is a positive because there is a huge opportunity to correct the disconnect.

98 • Exciting investment return potential Very few investment alternatives offer the possibility of a more rapid return of capital to investors with higher rates of return when films are successful. A well executed, modest budget film should result in recovery of many multiples of the initial production and promotion budgets within two months of the release of the film, and a substantial after market annuity from DVD rentals/sales, cable/satellite, and TV revenues. The keys to investment return success are a strong story with global market appeal that can be produced by a highly professional execution team on a modest production budget.

Investment Profile Negatives • Most movie projects lose money for investors This is largely because the content of the film fails to find an audience and/or the production and distribution companies consume the profitability above the investor distribution line. This persistent problem is traceable to flawed industry practices and a failed system of market research and story development to match global audience preferences. • Poor industry business practices • The movie industry is unique because every film involves the introduction of a new product to market with no certainty of market acceptance and very little if any market research. • Product design and structuring are generally left to the discretion of industry executives and filmmakers with almost no specific market research on the film concept or validation. • Investment and production decisions are most often made based on the “perceived” prior track record of the production team rather than the intrinsic merit of the film project itself. Perceived is the key word because many well known producers, directors and actors do not have successful track records achieving high rates of return for investors. • Many film projects are nothing more than vanity projects for studio executives, producers, directors and actors that are not well designed to appeal to large domestic and international audiences. • No industry offers less respect for the professionals (screenwriters) who design the product, the investors who finance the production and consumer preferences. • No industry offer less transparency and honesty to investors on budgets, costs, revenues and income. • Industry professionals and agents are extremely exclusionary and insular. The best stories that are made available to Hollywood are never produced because the system is all about who you know rather than the intrinsic merit of the concepts themselves.

99 • Story quality erosion Systematic and increasing disrespect for screenwriters has created persistent erosion in story quality that is a major factor in the ability of films to find and inspire audiences. Great stories and concepts are the drivers of huge movie revenues, but screenwriter compensation has fallen dramatically over the last fifteen years. This problem has become so acute that screenwriting is no longer a lucrative career that can attract high quality writers with the diverse life experience to write great stories that attract huge audiences on a consistent basis.

• Product design issues Screenwriters are largely not coached to design modest budget screenplays that can appeal to large global audiences, limit risks and maximize investor ROEs.

• Financial risks are rising rapidly in tandem with average movie costs There has been a significant increase in the average cost per movie over time. Hollywood studios are investing in much larger budget movies that concentrate financial risk in fewer projects. Very expensive special effects have become a huge driver of movies as a substitute for quality story content and characters. This progression has the effect of alienating many sophisticated moviegoers and increasing the risks to investors by concentrating investor dollars in fewer films. This also reduces the possible multiples of return on investment to offset the risks. A double negative edged sword for investors.

The recent and epic box office failures of “John Carter” (Disney) and “Battleship” (Universal) are strong evidence of the unsound nature of committing over $300 million in production and promotion costs in films. The lesson is that it is unsound to invest huge sums in superficial films that are long on the dazzle of familiar special effects and short on heart and emotional engagement. Movies of this type cannot consistently succeed without some major audience appeal factors beyond minor attachments to novels no one has read in decades and old board games.

The relative success of “The Avengers” does not validate the overall strategy of high-risk concentration. The film is successful and will likely achieve global box office revenues of four times its production and promotional budget of approximately $320 million. “Hunger Games” is the other big success this year that will likely achieve a similar four times box office multiple of its all in costs.

However, at least half of the box office revenues of both these films are kept by the theaters so the studios are only netting approximately a 2x multiple of their costs after gambling on the possibility of a “John Carter” or “Battleship” or “Lone Ranger” or “Ronin 57” type disaster. The addition of ancillary DVD and other revenue may push their returns to a 3x multiple if they are well received in those markets.

100 These results may still be overstated by the larger than 50% theater/distributor takes in the international markets. They may also be understated by studio margins loaded into the base budgets to avoid investor participation.

By contrast, RSL’s goal is to produce modest budget films under $50 million of all in costs that are designed to reach large global audiences and achieve net multiples in excess of 5x from box office alone with the potential to move to 6x-7x multiples including the ancillary markets. This will be achieved by a combination of dramatically lower RSL overhead and special effects costs. This will be made possible by RSL’s superior story profiles that focus on inspirational content as well as stronger character progressions and relevant, emotion driven content.

• Poor investment criteria prevails Reliance on “STAR” power and/or big name director attachments to attract investors, distributors and audiences has resulted in a lot of very poor movies being made and inflated acting costs that are not justified by increased profits to investors. In reality, the greatest actors cannot make an average story an investment success but a great story can make an unknown actor look great and a movie create strong investment returns. Countless investors lose money by repeatedly make the false assumption that big “STAR” or big name director attachments are an indicator of a great investment despite the massive evidence to the contrary. James Cameron and Steven Spielberg may be the only consistent exceptions, but their projects are infrequent and generally not available for direct investment.

• Few sound movie investment alternatives The current industry paradigm offers few opportunities for sophisticated investors to invest directly in quality projects with full disclosure and transparency on project costs, revenues and distributions. The industry systematically hides historical and project cost and revenue data from investors and structures deals to maximize their profitability at the expense of investor returns. • Investing in major studios is not a real option because they are owned by large conglomerates with other much larger lines of business that distort the high return potential of movies. Lions Gate is the one public exception, but the company has a very poor story development track record that has contributed to only a 9% rise in its stock price over the last 5 years. This very modest rise in stock value is not attractive given the risk profile of the industry. • So called “slate” investments in packages of studio films are not generally appealing because of huge studio overhead allocations, massive movie budgets that concentrate risk, lack of transparency on budgets and poor story development practices. This approach typically does not represent an attractive investment profile for sophisticated investors seeking superior rates of return. • Investing in independent “Indie” films that are not well designed to inspire large global audiences and are not managed by sophisticated business professionals is not a sound investment strategy.

101 • Investing in “STAR” and director driven vanity projects with unsound story structures and limited market appeal profiles that are designed to make a lot of money for them whether the film succeeds or not is a near certain formula for investors losing money.

• Risk versus returns issues • It is no accident that big name studio executives, producers, directors and actors very seldom invest their own money in films. They much prefer a scenario where they get guaranteed compensation and substantial upside if the film succeeds while the investor takes the downside if it fails. Investors can often get a better risk/reward equation on the tables in Las Vegas. • This structure prevails in the film industry, but it is fundamentally unsound because it does not balance risk taking and rewards. Therefore, the pool of sophisticated investors has diminished over time, and this has been further aggravated by the poor state of the economy. As a result, the number of films being produced is in decline as is the demand for the services of the industry professionals who refuse to create a system that properly respects and rewards investors. • The current industry reality is not an attractive investment profile, and it does not incent the creation of lower budget films that appeal to large international audiences. Most industry professionals make their fortunes within the production, promotion and distribution budgets, not from the profitability of the film itself. This problem is exacerbated by movie industry practices that systematically do not provide transparency into movie budgets, costs and revenues.

• Market entry risk While barriers to entry to the movie industry are low relative to many other industries, there are significant obstacles to be overcome to create a successful, integrated movie development, production and distribution company outside the studio system:

• Agents and talent build their careers through fealty to the current Hollywood system. It is very difficult to get them to embrace different business practices. • Almost no one in the Hollywood system has the desire or initiative to think outside the current Hollywood “BOX” to create a better system of story/production development and film finance.

RSL intends to overcome these obstacles by: • Promoting superior projects that attract top talent who want to explore the full potential of their craft making relevant movies that inspire the human heart, mind and spirit. • Hollywood has a very high functional unemployment rate and RSL can offer the opportunity for talent to work on multiple projects. • While there is a lot of fealty to the status quo in the absence of an alternative, there is also a lot of distaste for the shallow, special effects driven films and self-serving business and creative practices of the studios.

102 RSL believes that its independent profile will offer a compelling alternative for people to maximize their careers making great films that attract large global audiences.

Movie Investment Profile Realities

Central to embracing these exciting investment opportunities is evaluating RSL within the investment dynamics of the modern film industry and the context of the current capital markets. Accordingly, we will focus on the movie industry as a whole and then place RSL into the broader context of film investment opportunities and the depressed capital markets. This approach should demonstrate the extraordinary investment potential of RSL and its strategy of creating a new generation of films that are designed to attract large international audiences with stories that inspire the human heart, mind and spirit

Small Independent Film Makers There is an accurate perception that independent film investment is a very high-risk proposition with very uncertain return potential even when films appear successful. This problem can be traced to the lack of transparency on budgets, revenues and costs as well as poor story development practices and unsophisticated business management expertise. Generally speaking, the independent film “Indie” markets are dominated by thousands of smaller budget films that are not structured to appeal to large global audiences, and never reach theaters. While a very small subset of “Indie” films are profitable, most very small budget films do not offer story structures, attributes and production values to excite distributors, theaters and audiences. Accordingly, RSL believes that conventional “Indie” films are very unsound investment. There is a strong argument that all the capital invested in “Indie” films would achieve much better investment results if it was invested in a few larger and very well designed films that target the large disaffected and international audiences that the studio system largely ignores. This is the RSL business model.

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103

Studios As of this date, Lions Gate and Dreamworks Animation are the only significant public companies in the film industry that are largely engaged in filmmaking and distribution. All of the other major studios are minor subsidiaries of much larger conglomerates that have multiple other lines of business. The chart below summarizes the stock performance of these parent companies over the last five years:

Company Parent Parent Stock Parent Stock 9 Year % Average Price 4/20/07 Price 6/3/16 Change Annual Return Disney Disney $31.79 $98.75 210% 23% Fox 21st Century $21.00 $29.60 41% 4.5% Paramount ViacomFox $39.45 $49.17 25% 2.8% Universal Comcast See note below See note below N/A N/A Sony Sony Corp. $53.78 $27.95 (48%) (5.3%) Warner Bros. Time Warner $39.75 $75.84 91% 10% Dreamworks Dreamworks $29.45 $40.38 37% 4% Animation Animation Dreamworks Reliance ADA Private Private N/A N/A Lions Gate Lions Gate $9.38 $23.43 149% 16.5%

*Notes: Comcast acquired GE’s half of NBC Universal in 2013. Therefore the historical data would be too distorted to be useful.

The main value of this data is to demonstrate that independent, publically traded studios like Lions Gate and Disney are the only direct avenue for sophisticated investors to pursue extraordinary rates of return in the film industry. Lions Gate is the only independent and public film company. It is buoyed by the success of “Hunger Games” in 2012, “Catching Fire” in 2013. Mockingjay 1 in 2014 and Mockingjay 2 in 2015 but the franchise has now expired and LGF has nothing to fill the huge earnings void. This reality caused the stock to fall from a peak of $41 in November 2015 to its current level.

With the exception of Lions Gate and Disney, the primary businesses of the parent companies are much larger than the film divisions and distort the returns on investment. None of these companies have offered the high rate of return profiles that are possible to achieve with well-structured low budget films that are designed to appeal to large global audiences.

The above data provides evidence that these companies might be much better off if they divest their other lines of business and focus on maximizing the profitability of their film making businesses through a more effective approach to global market research, story development and cost/risk management.

104 Slate Funds Certain large hedge funds and other investors invest in large packages (“Slates”) of movies produced by large studios. RSL believes that these funds are generally poor investments for the following reasons: • The production budgets of studio films can be up to five times larger than independent films with similar movie attributes. The studios load the production budgets with huge amounts of overhead and imbedded profits to insure that the studio makes money whether the film is successful or not. It is hard to see why this reality would be attractive to sophisticated investors. • The studios have moved to producing a few very large budget films that concentrate investors risk in a very few projects. This is a very disconcerting reality given the poor quality of the studio’s market research and story development practices. • The studio story development practices are deeply flawed. They often target a small demographic of young and indiscriminate moviegoers who comprise the 10% of the population that was responsible for 50% of theater admissions in 2015. • Studio films are generally very long on costly visual effects and very short on strong stories, themes and characters. They systematically create films that may dazzle the eyes for two hours but seldom engage the emotions or the hearts, minds and spirits of the audience.

Despite the deeply flawed studio investment profiles, certain film funds structure these Slate investment packages with studios because the studios can assemble large Slates and ensure global distribution. Very little data is available on the investment results of these funds but it is hard to imagine that they are consistently attractive investments given the very concentrated and unbalanced risk versus return profile from an investor perspective.

Large Independent Movie Producers with Studio Attachments

The large movie studios maintain “Production Deals” with larger independent movie producers who actually produce the films. These large producers typically receive their finding from the studios but they may also seek independent sources of film financing from investors or funds. Almost all of these producers are private companies that set up film specific “LLC” affiliates for each film or slate of films as the funding vehicles.

This approach limits the liability and financial downside of the producer and allows them build a “Baseline” level of profitability into the production, marketing and distribution costs that the producer bills to the “LLC”. If the film does well, the producer participates in the upside. If the film fails, the producer’s loss is limited to his small investment in the “LLC” less the profits made through billings to the “LLC”.

To avoid this trap, many investors have chosen to invest directly into existing or start up producers with “well established” industry professionals. This scenario may seem to be better on the surface, but, in reality the large executive compensation requirements of the “well established” industry professionals

105 insulate them from direct losses on the failure of film projects. The executives risk their jobs by sponsoring poor performing projects, but not their financial well-being.

RSL has carefully reviewed the ROI landscape of these large independent producers under all these alternatives. As the following section will demonstrate, investment in any of these scenarios is a disaster waiting to happen.

The Realities of Movie Investment The major studios have long dominated the movie industry because of their access to capital and their power over distribution and promotion. Ever increasing budgets loaded with studio overhead and profits have resulted in consistently poor return on investment performance by the studios on their projects. This reality in addition to their pervasive disregard for investors has reduced their access to capital. Modern technology and communication and the ever increasing costs of studio distribution have gradually eroded the value of their distribution power. RSL believes that these two realities represent an opportunity for the entry of a new and fully integrated Mini-Major production and distribution business model. Examples are useful to illustrate this point. The following budget numbers simulate the profiles of the same movie project in three different production and distribution scenarios.

Studio RSL Profile RSL Profile Production & With Studio With Self- Description Distribution Distribution Distribution Domestic Box Office $100,000,000 $100,000,000 $100,000,000 Foreign Box Office $50,000,000 $50,000,000 $50,000,000 Total Box Office $150,000,000 $150,000,000 $150,000,000 Less: Production Budget ($80,000,000) ($30,000,000) ($30,000,000) Less: Marketing Budget ($30,000,000) ($30,000,000) ($24,000,000) Less: Theater’s Share ($75,000,000) ($75,000,000) ($75,000,000) Less: Distributor Costs ($25,000,000) ($25,000.000) ($8,000.000) Net to Investors ($60,000,000) ($10,000,000) $13,000,000 ROI 75% Loss 33% Loss 43%

The above chart is useful in illustrating the difficult investment profile of independent movie production using studio distribution. No rational investor should invest in a studio profile because the ROI is far below what it should be given the inherent risks of movie production, especially within a studio system that is designed to exploit investors rather than reward them. RSL believes that the keys to achieving superior profitability for investors are as follows: • Avoid bloated studio overhead and self-serving business practices to achieve lower production budgets to create the same production values. • Avoid massive expenditures on special effects by substituting superior story content.

106 • Professionally manage the marketing/media buy, budgets to minimize costs and maximize market effectiveness. Studios typically make huge margins on promotion so they have no incentive to minimize expenditures. • Self-management of global distribution costs to avoid enormous studio margins. RSL expects margins to further improve through larger global box office penetration, DVD sales/rentals and other after market profitability as well as multiple productions that should reduce the distribution fees. Movie Industry Mythology – The Value of “A List” Talent There is a mythology in the film industry that critical acclaim and “A List” casts and directors are an accurate predictor of investment success. In reality, there are very few people in the industry that create consistently strong risk adjusted returns on investment for investors. Please consider the following chart that summarizes the production and direction career of Steven Spielberg, a great icon of the industry.

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107 There are several important observations that can be made from this data: • The ROEs are overstated because recent films have much larger than $30 million marketing budgets. • The most successful movies did not often include top “A List” acting talent at the time of production. • The investor ROEs have fallen as production budgets have increased and as his career has progressed. • With a few exceptions, Spielberg’s investment performance has been largely lackluster other than on Jaws and ET and the Jurassic Park and Raiders of the Lost Arc franchises. This is in part because his projects have been increasingly reliant on high cost studio productions and distribution.

The bottom line is that even Steven Spielberg is not a strong indicator of investment success. Other than James Cameron, there are almost no directors or actors that consistently increase movie revenues by the 4x their compensation factor that is required to recoup their compensation to producer equity.

108 Large Independent Film Producer Performance Review

As part of evaluating the investment potential of film making and developing a powerful market entry strategy, RSL has developed metrics for evaluating the financial and investment performance of all types of films. RSL aspires to be a large independent movie producer that has self-distribution capabilities. Accordingly we are including investment performance summaries for two producers who represent the two major categories of large independent filmmakers. These two have been randomly chosen and are representative of the financial performance of the categories they represent.

Scott Free Productions (SFP”) SFP is a large and well-established independent movie producer that is perhaps best known for its film “Gladiator” that won a best picture Oscar in 2000. A review of its more recent films since 2004 can be found below. Each film is evaluated based on its box office and DVD revenues as reliable data on other aftermarket revenue is not available. The sharp decline in DVD sales in recent years has limited ancillary net revenues and increased the vital importance of box office success.

Scott Free Prodco.

Movie Global Box Production Prints & Theater Est. Gross Distrib Est. To $ Millions Office & DVD Budget Advertising Take Profit Fees Producer Man on Fire $119 ($60) ($35) ($60) ($36) ($20) ($56) Kingdom of Heaven $219 ($110) ($45) ($110) ($46) ($37) ($83) In Her Shoes $8282 ($35) ($20) ($41) ($14) ($14) ($28) Domino $39 ($50) ($30) ($20) ($61) ($6) ($67) Tristin & Isolde $32 ($31) ($25) ($16) ($40) ($5) ($45) A Good Year $50 ($35) ($20) ($25) ($30) ($8) ($38) Deja Vu $221 ($80) ($40) ($110) ($59) ($37) ($96) Jesse James $25 ($30) ($15) ($12) ($32) ($4) ($36) American Gangster $342 ($100) ($50) ($171) $21 ($57) ($36) Body of Lies $131 ($68) ($35) ($65) ($37) ($31) ($68) Tell Tale $0 ($12) 0 0 ($12) 0 ($12) Pelham 123 $189 ($110) ($50) ($95) ($66) ($31) ($97) Cyrus $10 ($7) ($2) ($5) ($4) ($2) ($6) Robin Hood $386 ($210) ($70) ($193) ($87) ($64) ($151) The A Team $220 ($110) ($50) ($110) ($50) ($37) ($87) Unstoppable $208 ($95) ($45) ($104) ($36) ($34) ($70) Welcome to Rileys $312 ($130) ($50) ($156) ($24) ($52) ($76) The Grey $104 ($25) ($20) ($52) $7 ($17) ($10) Prometheus $442 ($130) ($60) ($221) $31 ($73) ($42) Stoker $9 ($12) ($2) ($4) ($9) ($1) ($10) The Counselor $71 ($25) ($15) ($35) ($4) ($13) ($17) Out of the Furnace $11 ($22) ($5) ($5) ($21) ($2) ($23) Totals $3,222 ($1,487) ($684) ($1,610) ($609) ($545) ($1,154)

109 Scott Free Productions Comments: • The above figures are educated estimates only. Historical theater, distributor, print & advertising costs are not disclosed so RSL has made some reasonable educated estimates for illustration purposes. • Theaters typically take about 50% of box office revenues +/- 5%. • Distributors typically take about 33% or more of net revenues after theater takes in exchange for their services and funding the marketing and advertising campaigns. • There is not an exact correlation between marketing expenditures and production budgets so all marketing figures shown are educated estimates. • The increasing budgets have not been a formula for achieving superior ROEs. It simply concentrates the risks in fewer films. • A review of the movies themselves reveals stories that are not well designed to reach large global audiences on modest budget films. There are no rational franchise possibilities. • None of the films on the Scott Free slate would have met both RSL story content and budget standards for production. • The investment ROI picture illustrated by the figures above is one that would not be attractive to any rational investor and yet the studios and investors continue to fund Scott Free projects. • Yes, revenues from other non theatrical/non DVD sale sources would reduce the losses somewhat but not nearly enough to offset the losses in almost all cases. GK Films (“GKF”)

GKF is not as well known or established as SFP. It has relationships with studios but it also obtains significant equity capital from independent investors who do not want to invest in studio slates. Below is a summary of its major projects since 2009.

GK Films Movie Global Box Production Prints & Theater Est. Gross Distrib Est. To $ Millions Office & DVD Budget Advertisin Take Profit Fees Producer g The Young Victoria $39 ($35) ($15) ($20) ($31) ($7) ($38) Edge of Darkness $100 ($60) ($30) ($50) ($40) ($17) ($57) The Town $205 ($37) ($25) ($102) $41 ($34) $7 The Tourist $301 ($100) ($50) ($150) $1 ($50) ($49) Rango $284 ($135) ($60) ($142) ($53) ($47) ($100) The Rum Diary $28 ($50) ($15) ($14) ($51) ($5) ($56) London Boulevard $6 ($12) ($2) ($3) ($11) ($1) ($12) Hugo $218 ($180) ($70) ($109) ($141) ($36) ($177) Blood & Honey $0 ($10) ($2) ($0) ($12) ($0) ($12) Dark Shadows $260 ($150) ($60) ($130) ($80) ($43) ($123) Argo $262 ($45) ($30) ($131) $56 ($44) $12 World War Z $593 ($190) ($75) ($296) $32 ($99) ($67) Totals $2,296 ($1,004) ($434) ($1,147) ($289) ($383) ($672)

110 GK Films Comments:

• The revenue and cost assumption qualifiers from SFP above apply here as well. • As with SFP, the financial performance of GK Films has been a financial disaster for its independent investors and yet it continues to produce films. • As with SFP, a review of the nature of the consistently uninspiring stories reveals the most obvious reason for GKF’s poor ROI performance. There are no rational franchise possibilities. • The introduction of very expensive special effects in its huge budget films did not result in higher ROEs for investors. • As with SFP, None of the films on the Scott Free slate would have met both RSL story content and budget standards for production.

SFP and GKF are both representative of the vast majority of large and small independent producers. The bottom line is that it is irrational to rely on well established producers to source and develop film projects that will resonate with large international audiences, create sustainable franchises and deliver strong ROEs to equity investors.

This paradox exists because almost all of the producers rely on the same writing talent agents and other writing sources that are already known to them to source content. This flawed and incestuous system produces the same poor financial results regardless of which producer accesses the system. They are all searching in the same rotten barrel for a few good apples rather than cultivating good apples themselves. They apply near identical story development methodologies and are tone deaf to audience preferences.

The RSL Difference

These two examples have been shown as compelling evidence of the folly of investing in large independent producers or studio slates. The profiles shown here are very consistent with other large producers. Small independent films have an even worse investment track record because 90% of them never make it to theatrical release.

RSL believes the conceptual foundation of “Revelations” and its other five films in development compare favorably with every independent film listed above. “Avatar”, “Titanic” and “Dances with Wolves” are included as points of reference for the other films and because they all three employ the same basic romantic thriller/cultural immersion story structure as “Revelations”. RSL believes the use of this highly successful story structure is a reason for optimism about the global revenue potential of “Revelations”.

A review of all the data above reveals two key concepts that are central to the RSL investment vision. Highly profitable films must be conceived to 1) be filmed on modest budgets up to $30 million, 2) inspire vast global audiences to go to the theater and 3) have strong sequel potential. Films with budgets of less than $10 million seldom have the production values to achieve wide theatrical release that is necessary for superior ROEs. While these points should seem obvious, the data on SFP and GKF above clearly indicates that these clear realities elude major producers.

111

Why Invest In Movies?

The Capital Investment Alternatives The options for investment of capital to achieve strong ROEs has remained poor since the economic collapse of 2008. Current political realities offer little hope that investment profiles will improve in the near term. The dramatic shift in America from free enterprise driven economy to a suppressive, government centric model could hardly be worse for investors. Please consider the following realities:

• Economic growth is stagnant as of Q1-16 despite the expenditure of over $28 trillion by the USA federal government from 2008 through 2015 and the printing of near $80 billion each month by the Federal Reserve Bank to stimulate the economy. Global economic growth has slowed as the EU struggles with its debt crisis and economic growth in China falters. • Stock markets are overvalued because of excess liquidity from very large money printing by the Federal Reserve Bank. The markets also largely ignore the potentially very negative effects of Obamacare implementation. Real economic growth is at a standstill and unlikely to improve. • Bond markets offer no refuge because artificially low interest rates mean that bond values can only go down. Further downgrades in the ratings of USA debt seem unavoidable. • Commercial and residential real estate markets are over built and unlikely to offer a broad based recovery and strong risk adjusted ROEs in a stagnant or contracting economy. • Energy commodities are unlikely to offer predictable ROEs with natural gas markets over supplied and oil markets over valued relative to global economic realities and new production in the USA. Gold has receded. • High technology remains interesting but almost all opportunities are small in scope and ROI potential and or very mature in their life cycles. Government restrictions on start up capital raising and the negative effects of government regulations make it an unlikely investor refuge. So what is the exciting investment alternative given the above realities? RSL asserts that a compelling case can be made for motions pictures. On first assertion, this may stretch credulity given the extremely poor track record of film investments in the prevailing studio and “Indie” paradigms. Perhaps no industry can offer greater ROI potential and delivers worse ROI performance than movies. This reality persists because the story sourcing, development, culture and business practices of the “Hollywood” system are designed to ignore audience preferences and exploit investors rather than reward them for the investments they make.

“Hollywood” largely exploits the most negative, violent, shallow and immoral aspects of society that appeal to very small “Affinity” audiences with superficial films that most often inspire nothing more than disappointment or indifference. This reality represents an opportunity for insightful investors to create a new movie paradigm that illuminates a path to a much better world. Movies that offer a positive and hopeful escape from reality that can help trigger human progress, reconciliation and prosperity.

112 Film Investment ROI Opportunities Given the poor historical performance of almost all movie investments, it is important to review the sensational ROI potential of film investments. Below is a summary of a hypothetical movie that demonstrates the income potential of a film with various production budget and box office assumptions.

$ Millions Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7

Box office revenue $105 $140 $140 $200 $200 $300 $300 Production budget ($30) ($30) ($60) ($30) ($60) ($30) ($60) Advertising costs ($20) ($20) ($30) ($20) ($30) ($20) ($30) Theater costs ($55) ($70) ($70) ($100) ($100) ($150) ($150) Box Office Income $0 $20 ($20) $50 $10 $100 $65

Income as % budget 0% 66% (33%) 200% 17% 333% 108%

The chart above demonstrates the extraordinary earnings potential of modest budget films that achieve significant box office success as well the ROI consequences of larger budgets. The chart does not include any IPO benefits which could multiply ROEs up to 300x. The chart below shows the ticket sales that would be required to achieve the box office revenues in the chart above.

Tickets Millions Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7

Estimated Tickets at $8 13 17.5 17.5 25 25 37.5 37.5

Domestic frequent goers 43 43 43 43 43 43 43

% Domestic frequent 30% 41% 41% 58% 58% 88% 88%

Domestic moviegoers 225 225 225 225 225 225 225 % Domestic moviegoers 6% 8% 8% 9% 9% 17% 17%

Est. global moviegoers 725 725 725 725 725 725 725

% Global moviegoers 1.8% 2.4% 2.4% 3.4% 3.4% 5.2% 5.2%

* Global moviegoers are estimated based on USA–Canada being 29% of global box office revenues. • The RSL $30 million scenario achieves breakeven with 6% of the domestic moviegoer market and 31% of the genre average box office revenues. • Superior ROEs can be achieved with 8% of the domestic moviegoer market in the $30 million case. • Extraordinary ROEs above 300% are possible with only 17% domestic moviegoer market penetration.

113 • The estimated number of global moviegoers is only about 10% of the global population. The other 90% represent a potential growth market that can more than offset any domestic revenue shortfalls. • Completion of a successful IPO could increase ROEs by up to 300x. This very plausible scenario combines with RSL’s downside risk management methodologies to create an extraordinary risk adjusted ROI profile.

Huge market penetration is not required to achieve extraordinary ROEs. Movies that are well designed to appeal to large global audiences can offer early returns of capital and exceed the ROEs of almost any alternative investment. The IPO would further enhance liquidity options.

Film Investment Realities Well structured, feature motion picture projects offer one of the most attractive and underexploited avenues for achieving superior risk adjusted ROEs for insightful investors. Please consider these key investment profile features:

Movie Investment Attributes • Potential for an early return of capital – Two to three years • Multiple income streams – Box office, DVD, TV/Cable rights, Internet and other residuals • Superior risk adjusted ROEs – Target ROEs above 50% with strong upside potential beyond that level • Lengthy residual cash flow annuities after initial capital recoupment • Almost everyone in the developed world has a life relationship with movies and enjoys a great movie • Few in the film industry know how to produce great movies that deliver consistently superior ROEs • The only constraint on product demand is the supply of quality products • Barriers to entry are low and no industry is more ripe for the introduction of superior products • Existing suppliers are ignoring up to 80% of the potential market • Movies are recession resistant. The worse things become in the real world, the more people want to escape into alternative realities.

Movie Investment Issues • Studios are typically small subsidiaries of large conglomerates so direct investment access is limited • Studios increasingly invest in huge budget projects that concentrate and increase project risk • Studio budgets are highly inflated with unproductive overhead costs • Studio slate offerings are designed to exploit investors rather than reward them for the risks they take • Studios systematically avoid transparency on total revenues and their real costs • “Indie” films are typically small budget movies that do not draw huge audiences that drive big ROEs • Almost all of the over 15,000 “Indie” films each year never achieve theatrical release or profitability

114 • Industry story development processes are deeply flawed and typically ignore huge potential audiences • Studio distribution costs are very inflated to the detriment of film investors • Market acceptance is the great and unpredictable risk of all film investments • A visit to the current movie listings is profound evidence of the failure of the current industry business practices and the opportunity of an alternative business/investment model.

There may be no worse financial decision than to invest in studio or “Indie” films within the prevailing industry paradigms. This reality represents a huge investment exploitation opportunity for RSL.

A review of the big picture of the modern film industry in the context of the current economic and capital markets circumstances is a useful exercise in understanding the investment potential of RSL. • Global economic, social and political turmoil creates a desire for people to escape reality. People often view movies as a cost effective way to escape from reality and this represents a huge opportunity for the film industry. Unfortunately, the existing film industry systematically relies on superficial, formulaic and special effects driven content that may provide a shallow diversion for two hours, but does not inspire or illuminate the human heart, mind and spirit. • Millions of Americans and people across the globe would like to go to movies more frequently, but they are continually faced with empty slates of superficial films that do not attract their interest. This large pool of disaffected moviegoers represents a potentially significant business opportunity if films can be created that fulfill their desire for substantive stimulation of their emotions, their intellects and their imaginations. • Generally speaking, the real estate, stock, bond and commodity markets are not offering attractive rates of return to investors in the current economic environment. Hedge funds, mutual funds, pension funds, wealthy individuals, and life insurance companies are loaded with huge amounts of cash to invest with virtually no options that offer attractive risk adjusted returns on investment. • High quality film investments can offer a very attractive countercyclical investment opportunity that is unconstrained by demand limitations or price sensitivity if the film possesses the entertainment characteristics to attract global audiences. • The capital markets are searching for lucrative investment opportunities, but there is not a good system in the film industry to systematically match this capital investment demand with high quality film projects. Despite the potentially huge pool of interested investors, the film industry is not offering attractive investment profiles to potential investors. • Large studios generally force investors to invest in a slate of films rather than offering them the option to invest in individual projects. Large studios are also loaded with bloated overhead costs that add little value and drag down investment returns. • Independent production companies are fragmented and dispersed and generally lack the sophistication to create films that have large international box office potential. They also do not

115 typically have the scale to effectively access global distribution systems that can reliably create and retrieve international box office and aftermarket revenues for investors. • Independent producers also do not possess the business and capital markets sophistication to create attractive and reliable production, distribution and international revenue strategies and budgets that would inspire investor confidence. • The system of creating and retrieving international box office and aftermarket revenues is not well defined or organized to create comfort for potential independent investors. • In addition, it appears that very few if any film industry firms have developed a strategy to systematically create sophisticated and credible investor presentations and market potential investors. • Directors, actors and actresses are largely not being used as resources in film production promotion at the initial investment level despite the huge unemployed down time of most industry talent. This is a huge missed opportunity for the industry as a whole. • The industry generally practices a formulaic and self-defeating creative development system that excludes almost anyone who is not a film industry insider. This deeply flawed system produces the same inferior results as any other incestuous system that is practiced for too long. As a result, the industry is missing huge audience of intelligent filmgoers who want to be stimulated on more than just a visual level. • There is a pervasive dearth of movie content that inspires the heart, mind and spirit because the studios prefer to focus on technology, special effects and global distribution power rather than inspirational and character driven content. • There is a large void of quality films between the superficial large studio productions and small “Indie” films that are not well designed to attract large audiences. • There is little effort to create films that offer positive content that contributes to the betterment of the human condition or promotes cross cultural understanding. Films focus more on international and cultural conflicts rather than commonalities. • There are few films that are well designed to appeal to international markets.

Non-Movie Investment Alternatives Comparisons - Risks Versus Rewards

A review of existing investment alternatives is useful for comparison to the profile of film investments. A protracted period of poor economic performance has resulted in an unattractive investment landscape for sophisticated investors who are seeking superior rates of return. Please consider the following realities:

• Public stocks Lions Gate Entertainment (“LGF”) is just one example that demonstrates that public equity valuation metrics have become highly irrational and are dramatically overvaluing public stocks. Investments in

116 public stock funds or individual stocks offer nominal upside return potential with substantial downside if the global economy remains bogged down in the Euro and USA public debt issues, or a conflict breaks out in the Middle East that interrupts oil supplies or valuation metrics revert to fundamentals and rational analysis. Public equities are opportunities for IPO exploitation, not rational investment. • Hedge funds These variants on the public and private stock markets are inconsistent performers and offer only nominally higher returns when successful in most cases. • Commercial/residential real estate These markets have long been a favored investment vehicle but a full cycle analysis would indicate they are typically not attractive investments in the longer term. These markets are experiencing another irrational building spree in markets that are largely overbuilt and do not offer an attractive equity investment profile for the foreseeable future. The major economic growth that is needed to jumpstart these markets to attractive return levels is highly unlikely in the near to intermediate term. • Oil & natural gas Natural gas prices are extremely low with little upside because of ever increasing domestic supply. Oil prices have fallen over 50% since summer 2014 in response to slowing global growth and increasing production. This may reflect a significant paradigm shift driven by shale drilling technologies and changes in consumer consumption behavior. The upside could be huge if the Iran or ISIL scenarios erupt into a majo war in the Middle East but that scenario seems unlikely at this time. • Corporate & public debt Interest rates remain artificially low and cannot go significantly lower. Any substantial increase in inflation would cause rates of return to become negative very quickly. Almost inevitable further deterioration in the credit rating of the USA would reduce values as well.

The ongoing and massive printing of U.S. dollars by the Federal Reserve Bank is likely unsustainable and an ever present risk to stock values, private businesses, real estate values and the economy in general. These huge liquidity injections are having the effect of inflating values in most markets about their intrinsic worth. This is not an attractive equity investment profile for any rational analyst. RSL – A Potential Investment Refuge In Uncertain Times RSL believes that overall economic and capital market uncertainties make investments in a well designed movie profile outside the studio and “Indie” systems an attractive risk adjusted ROI alternative to current film and non-film investments. The recent recession demonstrated that box office admissions fell by only 4% in 2008 at the depths of the recession and rebounded quickly in 2009. There is also reason to believe that the low admission costs of movies make them a more attractive alternative to much higher cost public entertainment options, especially in difficult economic times.

117 RSL Financial Projection Summary

RSL has accumulated a compelling slate of 14 feature motion picture screenplays that are currently in development. Each project has substantial merit so they will be thoroughly evaluated by RSL and its production partners/teams to determine the order of production to optimize cash flow to RSL and its investors. Below is a Base Case scenario for execution of the RSL projects over the first 4 years.

118 Key assumptions and observations on the scenario above are as follows:

• The summary above is supported by detailed Excel spreadsheets with budgets for each project and RSL corporate expenses. • The RSL Base Case Projections for each of the films assume production budgets at $30 Million (29% of the genre average of $104 million) with box office/DVD revenues $193 Million (45% of the genre average of $429 million). • The production budget assumptions are supported by proforma budget templates and are realistic because they will not be inflated by huge expenditures on CGI/special effects, large “A List” actor premiums or enormous studio overhead allocations. • The revenue assumptions are well below the genre averages and do not include assumptions for any non-box office revenues that will be very material. • The income assumptions are conservative because they do not include expense reductions from up to 40% spend rebate incentives. The qualifying costs are somewhat complicated so the summary on the previous page conservatives assumes a net 10% subsidy benefit on all project costs. • Significant tax benefits should also be considered as a significant net income benefit but is not included in the incomes calculations. • This projection is for illustration purposes only. Actual costs and box office revenues cannot be projected with precision on any movie project, especially at this stage of development. • RSL believes that the box office assumptions are reasonable but there can be no certainty of final global distribution or audience acceptance. • The Base Case scenario is designed with revenue levels and cost assumptions that would achieve a 941% 4 year ROI on the average $46 million amount outstanding on the Primary Capital Facility over the 20 months required for RSL to become cash flow self sustaining. This translates to an average 235% annual ROI on average over the four years. • No film would achieve the exact performance projected. Therefore, the eleven film scenario assumes that some films would underperform these expectations and others would over perform these assumptions. This diversification of films is key to achieving consistently superior ROEs. • While RSL has high confidence in all of these existing film projects, RSL reserves the right to substitute with films that are not on the list if they meet RSL’s high standards and specifications. One RSL strategy is to attract the best screenwriters available and train them to write to match RSL’s strategy. • The scenario only includes projected box office and DVD revenues and expenses because assumptions about other revenues are difficult to project. Revenues from rights sales to aftermarket providers are not included but could be very substantial. The assumptions do not include production

119 spend rebates / incentives, Brand Integration and other Soft Money revenues that would be aggressively pursued by RSL. The non-inclusion of all these items is conservative and can serve as offsets to underperformance on box office revenue assumptions. Collectively, all of these items that are not included could have a very material and positive impact on the ROEs. • Budgets of $24 million for marketing and advertising expenses have been included for each film. This would allow for the opening of each film in at least 2,500 domestic theaters and stimulate theaters to show RSL films. • The Primary Capital Facility will allow RSL to fund and control its own marketing expenses to insure the marketing content and strategy for each film as well as the target markets, timing and amounts of expenditures in each area. This flexibility will minimize marketing costs and maximize their effectiveness to the benefit of RSL investors. Lower costs allow funds for broader distribution if warranted by demand. • The scenario assumes that the Primary Capital Facility will be a revolver and that it will be fully repaid in a little over three years. No projections are made beyond four years but it would be RSL’s firm intention to continue to develop new movies to allow RSL to become an ongoing enterprise. • If RSL reaches or exceeds the performance levels in the chart above, there may well be IPO and/or private sale opportunities for RSL that could dramatically enhance the ROEs for RSL investors. • The maximum advance on Tranche B of the Primary Capital Facility is expected to be $111 million in month 14 and that amount should reduce rapidly after the first three movies reach the theaters in year two. The additional $39 million on the $100 million debt capital amount is available as a liquidity reserve to address any working capital or timing of release issues and to allow for opportunistic pursuit of additional movies that may arise in year one. RSL will complete detailed budgets, marketing plans, production plans and distribution plans as part of business plans for Board of Directors approval on each film project prior to any advances on the Primary Capital Facility.

120

Investment Risks & Considerations

Although it must be noted that typical film investment involves significant risks that include but are not limited to the following risks: • Market acceptance risk – There is no certainty that audiences will attend any movie. • Distribution risk – RSL films are different and may not be accepted by international distributors. • Execution risk – The risk that the RSL business plan will be effectively executed. • Financial risk – The production and advertising budgets may be larger than the net revenue results. • Completion risk – The risk that the film will be completed on time and budget. • Financial Transparency risk – The risk of improper accounting, auditing and revenue collection / disbursement practices. The magnitude of these risks will be substantially reduced / mitigated through: • RSL’s ability to arrange the direct and wide release of each film to Theatre Chains. This is enhanced by its creation of a compelling integrated studio profile and its ability to invest directly in significant marketing / advertising and strong promotional and marketing plans. • A strong film concept that appeals to a broad spectrum of domestic and international audiences. • Minimizing the film’s budget by avoiding big studio overhead and special effects costs, and seizing of available rebates / subsidies and other soft money benefits in certain filming locales and leveraging the equity invested by accessing of non-recourse debt at attractive costs of capital. • Sound relationships with multiple international sales / distribution networks. • Pre-production critiques / valuations and some pre-selling to international buyers and/or distributors. • A primary focus on minimizing costs and maximizing profits for the investors who take the risks. • The Primary Capital Facility will provide RSL with the financial resources to attract a top execution team. • All RSL film productions will be insured by Completion Bonds issued prior to start of official production that guarantees RSL and its investors/shareholders that the films will be finished on time and on budget. • RSL (unlike the major Studios) will only use international best practices on worldwide revenue collection, disbursement and reporting / transparency and auditing. This is accomplished by use of one or more internationally recognized and respected “International Collection Agencies” to collect revenues from the sale distribution and exploitation of each film and disburse funds according to written instructions and agreements pre-approved in advance first by the RSL Board of Directors and subsequently any third party beneficiaries (i.e. production talent,). RSL will only use Bondable

121 Production Accountants and will be annually audited by a major internationally respected auditing firm. The options for revenues are far greater than five years ago. The degree of risk has also been diminished with the development of strong international markets and with the diversified exhibition media available, i.e., theatrical release, DVD, home video, pay TV, network TV, Internet and non-theatrical. A quality film packaged with best use of the most advanced financial and production structures available to RSL today, ensures that the capital risk of each picture can be valued/ risk mitigated and or underwritten up to 100% of cost prior to start of actual production still leaving a reasonable chance to achieve an ROI above 50% over two years.

Return on the investment is largely a function of the film's cost of production and distribution in relation to its public appeal. The extent to which the picture will appeal to the public is largely dependent upon story content, acting talent/performances and the effectiveness of promotional/advertising activities. The RSL team is devoted to the appropriate assessments of each feature film opportunity and market taste evaluations to minimize the risk associated with film production. Risk Mitigation Strategies

• Prior to commencement of principal photography for each film project, RSL will generate foreign presales in certain smaller territories e.g., Eastern Europe, South America–Brazil, Australia, New Zealand etc., to 1), generate deposits, facilitate presales advances and 2) facilitate bankable sales estimates /advances for the remaining foreign territories and 3) validate market acceptance. • RSL will package the film projects to fully exploit all available government rebates, subsidies and or tax incentives and brand integration revenues (“Soft Money”). • These soft money revenues go can go straight to investment recoupment up to 50% (or more depending upon the amount of brand integration opportunities written into the screenplay), of the total production budget amount and when combined with foreign pre-sales and sales estimate advances (as above), can provide a combination of project underwriting and production cash flow or recoupment of up to 100% of the production budget with major territories such as the North American distribution market still not exploited. • Unlike most major studios and producers, RSL will offer fair and full financial transparency to key producers, directors and acting talent. This will facilitate RSL’s ability to induce them to take “back end” equity participations in lieu of a significant portion of their traditional “front end” compensation. This approach converts talent into investors, motivates them to perform at their highest level and reduces downside risks for RSL equity investors. It also provides RSL with a competitive advantage versus other producers in securing the optimum talent on a cost effective basis.

122 • RSL’s modest budgets and superior content origination methodologies that are focused on powerful resonance elements that will attract large global audience is the best hedge against downside risks. One major goal is to presell up to 100% of the production budget capital into international markets once RSL is well established. This goal is attainable because RSL will produce modest budget movies in genres that average over $400 million in revenues per film. Achievement of this goal will eliminate downside project risks while preserving huge global market revenues and earnings potential.

IMPORTANT NOTE: There are no guarantees that any film will be well received by critics or viewing audiences. Anyone considering investing in any film production, should consult with their own attorneys, film industry specialists and/or tax professionals before investing. No investor should invest any amount in movies that they cannot afford to lose in its entirety without hardship.

123

Business Plan Execution & Movie Production

Objectives

Raise the Primary Capital to employ the optimum human resources to successfully execute the RSL Business Plan and capital markets strategy to deliver Alphas above 10,000 to RSL investors in 5 years.

The RSL Approach Common practice in the movie industry is for a studio or producer to: • Acquire and develop a screenplay and budget • Attach a director and lead acting talent • Seek distribution • Seek financing This ineffectual process produces the poor product offerings that we see in theaters and losses for production equity over 85% of the time. By contrast, RSL will: • Secure commitments for $150 million of primary capital to create a going concern movie studio. • Assemble a small but exceptional executive execution team for approval by the RSL board of directors. • Secure a $10 million seed funding advance from the primary capital to launch the studio and optimize the screenplays with an advanced core development team. • Optimize the scripts and complete the budgets and project plans on the first few films with the producer, director and key talent attachments for RSL board of directors approval. • Attach the ideal project execution talent and casting. • Obtain RSL board of directors approval to proceed into production. • Contract production with first quartile producers and directors. • Self market, advertise and distribute only the RSL films. • Execute the RSL business plan and capital market strategies.

• RSL will secure a primary capital commitment and assemble a top tier executive, production and distribution team for approval by the RSL Board of Directors. Upon approval of the team and the corporate budget, seed funds of $10 million will be advanced.

124 • Going forward, RSL would prepare draw requests that would be tied to specific performance requirements in the budget for review and approval by the Escrow Agent as each project moves forward. This would operate much like a real estate construction project. • The RSL team will create the preliminary business, marketing, advertising and distribution plans and budgets for each film project with a commitment letter from the Completion Bond Company for submission to the RSL board of directors for approval. • Upon approval, pre-production funds would be released into the RSL “Operating Account”. • Upon completion of pre-production for each project, RSL submits the final project execution plans and budgets for approval. • Advances to the “Film Production Accounts” would be made under draw requests tied to the project budget requirements.

Converting The RSL Vision Into Reality RSL is a start up so the path from concept to operations is an importnant progression to consider. Below is a summary of an estimated time line goal from primary capital commitment through the first movie release. The timeline may vary based on the availability of key human resources and other factors. The fundings are front loaded by phase but can be advanced in monthy increments.

Project # 1 Primary Capital Project #1 Project #1 - Project #1 Fund P&A Costs Commiment Enhance Script Plans & Budgets Due Marketing $24 Million Days 5 - 45 Day 60 Days 360 - 450 Day 1 Day 360

Project #1 - Fund Fund Seed Capital Project #1 Fund Development Preproduction Project #1 Project #1 $10 Million $1 Million $2 Million Post production Theatrical Release Day 1 Day 30 Day 65 Days 240 - 390 Days 420 - 480

Project #1 - Engage Executive Search Assemble & Hire Creative Project #1 Firm Team Project #1 Preproduction Fund Post Production $7 Million DVD Release Day 2 Days 5 - 60 Days 40 - 120 Day 270 Days 480 & Beyond

Assemble & Hire Executive Project #1 Project #1 Project #1 Lease Primary Offices Team Crewing & Casting Production Ancillary Releases Day 2 Days 3 - 90 Days 40 - 110 Days 120 - 270 Days 510 & Beyond

Project #1 - Project #1 - Project #1 Furnish & Equip Offices Employ Admin & Tech Staff Fund Production $20 Final Plans & Budgets Due Residuals Days 2 - 30 Days 1 - 30 Million Day 110 Day 120 Infinite

125

Movie Production - A Contracting Business

Excellent production values are vital to cinematic and financial success. However, the ability to write and develop movie concepts that resonate with large international audiences is a much more important success factor than the production process itself. There are countless filmmakers who can convert a great story into movies with excellent production values. However, the poor content in theaters is evidence that few movie producers know how to create sensational movie concepts that resonate with large audiences. Accordingly, RSL will retain the more vital success factors in house and contract most of the production functions with third parties as is common industry practice. The chart below summarizes key functions and the responsible parties. Purple is for RSL. Blue is contracted. Green is shared between RSL and contractors. These responsibilities may vary based on individual project requirements.

Capital Executive Post Preproduction Promotion Sourcing Producing Production

Treasury & Script Producing Production Marketing Accounting Development

Screenplay Line Project Legal Advertising Editing Producing Budgets

Project Domestic Administration Screenwriting Directing Business Distribution Plans

Investor Market Research International Crewing Locations Relations & Matching Distribution

Corporate Story Concept Aftermarket Casting Sets Oversight Creation Distribution

Similar to commercial real estate projects, RSL will operate as the project developer and contract construction of the project.

The high quality of the execution teams that RSL submits for board of directors approval will allay all execution concerns. No production funds will be expended until the RSL board of directors approves 1) the RSL executive team and 2) the project execution plans, scripts and budgets for each project.

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Distribution, Marketing & Advertising

Overview

Studio distributors dominate the global film distribution markets to the detriment of profit seeking producers. They typically finance the marketing and advertising budgets for films in exchange for distribution rights within specific domestic and international markets. These type of distribution agreements are not attractive to RSL for the following reasons:

• The studios generally want control over story selection and content. This is a major issue because RSL wants to avoid the negative story development and business practices of “Hollywood” in order to insure profitability for RSL investors. • They demand priority rights on the recovery of all their costs plus fees that can be up to 20% of net revenues from theaters before RSL and its investors would start to receive recovery of their investments and profits. This is especially onerous because the theaters take about 50% of box office revenues off the top. This leaves only 30% of net revenues after marketing cost recoveries to recoup production costs and achieve an ROI for production investors. This is why almost all films lose money. It is also the reason that self-distribution is imperative to achieving superior ROEs for RSL investors. • They demand control the timing of theatrical releases as well as the budget amounts and the strategy of the marketing and distribution campaigns. This is a very big concern because studios often use affiliates with inflated pricing to execute the marketing and advertising campaigns. They also waste millions on unproductive marketing activities.

RSL does not believe that superior ROEs can be achieved for RSL investors by exclusively relying upon conventional studio affiliate distribution. The business models of these distributors rely upon very large profit margins layered on top of very bloated overhead structures and very limited risk taking practices. The net result of pursuing this path for distribution would be losses or inferior returns for RSL investors. Fortunately, the infrastructure and staffing required for maintaining a North American distribution operation has fallen significantly as consolidation of American theatrical exhibitors has combined with the transition to digital distribution of films to movie theaters. Thus, for RSL’s seasoned distribution teams with long-standing personal relationships with the foreign and domestic exhibition community, the barriers to such direct distribution have dissolved. RSL expects to engage in pre-selling its film titles to local distributors only in lesser international markets or where economics otherwise justify. RSL will ultimately distribute its films in larger international territories directly under its own name to maximize the retention of growing international revenues and establish a global brand. By embedding strategic employees in key international territories and with those buyers/distributors initially (until a more extensive regional foreign distribution structure is justified). RSL plans as soon as possible, to release films overseas under its own name to maintain efficiencies that

127 can generate higher-level international revenues on even modest successes than might be generated with alternative distribution structures. RSL intends to employ sophisticated and seasoned distribution professionals on its staff who will enhance management of territorial and ancillary distribution for all RSL projects and bypass all traditional studio distribution channels. This approach will require the internal enhancement of its strong domestic and international sales, marketing and distribution network that will enable RSL to further leverage the most productive movie markets at the minimum possible costs to RSL. This strategy will enable RSL to control marketing and advertising timing and expenditures while avoiding the huge margins and bloated costs of the studio distribution affiliates. RSL will not be independently distributing in markets where there is not strong evidence that RSL’s goal of a 50% ROI can be achieved and in such case it would sell distribution rights in such territory to a more established distributor. Even the major studios handle certain territories in such manner as they can’t compete in a small number of territories against ingrained distributors. The retention of distribution responsibilities will require RSL to fund most if not all of the print, marketing and advertising expenses for its domestic theatrical distributions. These costs can be very substantial and may in some, if not all cases require expenditures greater than the production budget amount itself. This approach entails more project risk concentration but it will still be far below the massive expenditures incurred by studios on their proprietary projects. RSL has included a $24 million “Media Buy” budget for each of its film projects for a wide screen opening. This is initially sufficient to exploit the most attractive demographic markets that deliver superior ROEs. If additional marketing / advertising expenses are required it’s indicative of an expanding audience that needs to be sustained proportionally and a great problem to have and easily financeable at that point.

Core Audience

RSL projects are designed to appeal to very broad domestic and international audiences and demographics. Their powerful cross-cultural themes should strongly appeal to men and women ages 10- 80 on an international basis. Their compelling stories with strong female protagonists and action/thriller elements as well as emotion driven and realistic romantic progressions should be a large draw for women and men and young adults of all ages. Their riveting thriller and action content should attract male audiences who will also find their ultimate dream girls in the female protagonists. The EU and the former Soviet Union will be major international markets as well as India, China and Latin America.

Theater Chains

RSL will aggressively pursue building on direct relationships with theater chains across the earth as an ROI imperative. Please visit Exhibit #2 for a case study on a major new studio investment that has been successful in reaching direct distribution agreements with all the major theater chains in North America.

128 The direct distribution approach offers great promise because all of the chains are afflicted by the generally poor quality of the films being produced and intrusions by non-theatrical content sources such as Netflix, Redbox, online, etc. into their markets. The trend to ever fewer and larger budget films by the studios is also reducing the volume of major film productions and creating major quality content issues for theaters that must operate 360+ days per year.

RSL intends to exploit these realities by offering a stream of superior film content supported by $24million marketing and advertising budgets for each film. RSL will also collaborate with the theater chains to optimize the effectiveness of the marketing and advertising expenditures.

The Self-Distribution Imperative The chart on page 22 of this business plan and the analysis that follows it summarize the ROI imperative of self-distribution. It is near impossible to achieve a successful IPO profile and superior ROEs for investors without creating an effective self-distribution capability. That can only be achieved by creating an integrated studio profile that can be respected by the major theater chains. Under existing finance conventions of the movie industry, producers raise equity and other capital to finance the development and production of a film. They then sell the rights to the film to a studio distributor or partner with distributors who are responsible for the costs for promotion and advertising of the film. Both approaches to film distribution have major drawbacks for independent film producers and investors: • Very few films are purchased by studios or distributors. If they are purchased, the studio or other distributor will seek to limit their downside risk of theatrical success by placing recoupment priorities on their Marketing advances and distribution fees. Under his scenario, the theaters take priorities on about 50% of box office revenues and the studios/distributors take another 20% if fees. This leaves only 30% of revenues to recoup all of the production and marketing costs less the purchase amount proceeds which are typically a fraction of the production/marketing expenses. • This is a scenario that no rational investor should embrace. It is a last resort that is designed to recover a portion of production costs to limit losses, not a strategy to achieve superior ROEs. Any ROI that can be achieved through a sale will very likely be far below the ROI that would be appropriate for the risks incurred by the producer and investors in creating the film. • Marketing and Advertising costs for wide domestic distribution can range between $20 million to $70+ million depending on the number of theaters and magnitude of promotional efforts and the size of the production budgets. If a studio distributor is engaged, the producer and investor will likely have no control over the amount spent by the distributor on marketing / advertising costs or the types of promotion and advertising that will be employed or the theatrical distribution strategy. This loss of control is a very significant risk factor in the investment return potential of a film. • Distributors often under spend on advertising to minimize their capital at risk or over spend on promotion activities that benefit their affiliates without optimizing theatrical revenue results for producers and investors.

129 • Studio and other distributors extract a very high price for their involvement in the distribution process. • They demand that they recoup their Marketing Costs before any benefits are passed through to the producer and investors. • They extract distribution fees of up to 25% of the net proceeds after recovery of marketing costs as distribution fees. • They then share in the net proceeds after recouping their capital invested and fees for their services before the producer and investor can begin to recoup their investment. • After theaters take approximately 50% of the box office receipts and the distributors recoup their costs and extract their fees and their share of remaining proceeds, the producers and investors who took the largest risks begin to recoup their investment.

This structure is very exploitive of investors because it has the effect of forcing the producer and investors to assume a very disproportionate amount of risk for very limited ROI potential. It makes it virtually impossible for the producer and investors to achieve superior risk adjusted rate of return. It is not a structure that is designed to produce superior ROEs for investors and not a structure that should attract any sophisticated equity investor.

RSL Distribution Advantages • RSL will source, develop and produce its motion pictures and has in-house industry leading skills and expertise, to manage sales, marketing and distribution of its films worldwide. • RSL will control its distribution rights and direct foreign sales to the international buyers through to releasing RSL films directly to the cinema owners in the North American Market. • RSL may initially rely on independent sales agents and distributors for distribution outside of North America until direct relationships can be created with the theater chains / buyers in certain key international markets. • New Zealand has become recognized in the industry as being in a world-leading position in the marketing, distribution cinema software management space. RSL has access to world leading software created in New Zealand for the worldwide cinema and film industry which provides big data analytics through the collection of information from cinemas around the world. This will help RSL to create targeted movie campaigns, for maximum effect and worldwide execution. • RSL will use this industry leading software solution for theatrical film marketing and distribution which is solely focused on the film distribution industry. It is highly detailed and yet offers all the functionality necessary for complete planning and control with comprehensive, user-friendly software, for professional management of RSL theatrical releases. • RSL can arrange the direct release of its films through all the major North American theatrical chains such as:

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RSL is able to:

. Arrange the release and book theatres across North America on a minimum opening of 2500 screens. . Manage its marketing and distribution strategy including PR, promotion, and creative media vendors (one-sheets, trailers, TV/Radio/Internet spots etc.)

Third Party Distribution of RSL Films

. Revenues from RSL motion pictures will be derived from domestic and foreign theatrical distribution, sales to television, as well full exploitation of all ancillary rights, such as SVOD, DVDs, pay cable and satellite television, soundtrack recordings, etc. The RSL revenue strategy combines traditional and all digital / internet based opportunities.

. RSL core strategy is to aggressively pursue global distribution independent of the major studio distributors. However, RSL has relationships with targeted distributors who might offer specific and specialized ancillary market access that would enhance RSL’s ability to achieve its overall ROI objectives. Below is a list of key distributors that RSL may work with under the right circumstances:

Alliance/Atlantis Warner Brothers Fox Columbia/Tristar NBC/Universal Paramount Lions Gate/Summit Sony Screen Gems

. The distribution goal will be to self-distribute and exploit competition opportunities among the distributors in certain territories that will enable RSL to achieve its investor ROI hurdle rates of 50%. RSL will also employ the sophistication to consider lower ROEs that would reduce project risks and increase risk adjusted ROEs. RSL will likely initially rely on certain foreign distributors in markets outside of North America. Foreign presales will be used to reduce capital at risk on certain film projects as beneficial.

131 Digital / Ancillary Market Distribution

. We also have an in-house direct channel to the expanding multi-screen ecosystem to maximize the roll out of our digital distribution business by optimizing revenues from every IP VOD channel, plus include rental kiosks, Internet streaming subscriptions and the DVD market. . We can even arrange release of our films day-and-date in theatres on the same day as they launch on the iTunes store, on Amazon Instant Video, on Dish Networks, the YouTube Movie Store and Android mobile devices, and all other cable and Internet VOD services we choose to work with and on release schedules we control and decide are most beneficial to maximize revenues. . This capability can improve marketing efficiencies of day-and-date theatrical and optimize returns from direct-to-video releases to all major channels thru VOD/electronic sell-through on all connected devices and services." Our fresh, well-marketed product will stay on the cutting edge of the ever- compressing windows to ensure that we benefit from a platform that delivers an anytime-anywhere capability in the medium of our choice and a positive digital viewing experience on any device in any location. . We can also arrange direct distribution of our DVDs for retail rentals, kiosks and by-mail services, subscription streaming services, pay TV and specialty markets (airlines, hotels, cruises). Advertising A great product or service is the best advertising in any market. “Hollywood” spends billions of dollars each year on unproductive advertising of poor products. It invests a large proportion of those dollars in online, TV and digital mediums that do not produce the 4x value multiple that are needed to achieve a positive ROI on the funds invested. In truth, the vast majority of advertising dollars spent are a revenue unproductive means for distributors to fleece producer equity out of potential profits through their advertising affiliates. These realities make it imperative for RSL to control the expenditure of advertising funds so that they can be directed to activities that achieve above a 4x revenue increase for each dollar invested. The $24 million marketing budgets that RSL has included in its financing request are the vital means to gaining control of advertising and commanding the respect of the theater chains so that direct distribution contracts can be created. The goal is to avoid spending as much of those funds as possible through the use of proprietary and most effective advertising techniques and methodologies. In reality, most people make their movie choices by catching online social media generated viral buzz and visiting the online or newspaper movie listings. They also respond to compelling movie trailers in theaters or Online or TV. The key to success is projecting a compelling movie premise that stands out from other films and triggers a desire to go to the theater. RSL will have superior movie concepts with powerful points of positive differentiation from other films. RSL will also be hiring cutting edge advertising professionals who will be laser focused on optimizing the effective projection of positive resonance elements and the ROI productivity of all advertising expenditures.

132 More importantly, RSL will create great products in the form of compelling movies that will create their own “buzz” through word of mouth which is the most powerful and least expensive marketing medium.

RSL Marketing & Market Research New Zealand has become recognized in the industry as perhaps the world’s best location to test new marketing campaigns, prior to launching them out to the rest of the world. This is because New Zealand has a population of under 4 million mostly middle class citizens so when an inexpensive in (NZ dollars) test marketing campaign works in NZ, time and again it has proven to work in the worlds larger markets.

Access to advanced technology allows RSL to collect vast quantities of data, whatever its origin, volume or velocity. The concept of Big Data revolves around our ability to action this information. We take this data and puts it into context – so we know what your customers want before they do. RSL tightly integrates customer intelligence and campaign management methodologies to provide RSL with a single view of RSL customers across many data sources. RSL can identify specific audiences and develop sharp influential campaigns that hit the mark.

By combining “Big Data” with customer intelligence, RSL can cast the audience for each movie by knowing whom they're talking to and what pushes their buttons. Data is fed to RSL from multiple sources, which can be profiled, sorted and combined using over 100 film centric filters to create literally millions of unique target audiences.

Brand Integration Revenue Sources. RSL has a team with proprietary knowledge, expertise and the relationships to enable it to work with the top 250 Brands in the world, and RSL intimately understands the business of Brand Integration and how to monetize it in ways that will create significant cash revenues for recoupment of RSL production costs.

133 This expertise is really just not available to independent producers and productions who really have no idea how it works or what the business of Brand Integration really is about and how different it really is from product placement. For a number of reasons the Brands, their representatives and agents have no motivation to educate them or the rest of the industry about how the business really works on this level. The trade secret expertise RSL draws upon comes from successfully providing proprietary Brand Integration services and significant revenue for Major Studio’s productions and franchises. For the right projects, Brand Integration Revenues can offset as much as 50% of the production costs so RSL is specifically focused in the final development of its screenplays and franchise properties to take maximum advantage of available Brand Integration Revenues.

Domestic Revenue Sources Domestic (North American) revenues usually, but not always, include Canadian motion picture and ancillary market distribution rights and are not limited to: • Theatrical exhibition • Non-theatrical exhibition • Airplanes- (rights for in-flight movies) • Hotels • Military bases and other facilities • Pay television systems for delivery by • Cable • Satellite delivery & wireless mobile • Pay-per-view and etc. • Internet and Internet-television subscription and VOD sales • Network and Local commercial television stations (syndication) • Home video including DVD, Blue-ray and other emerging technologies • Ancillary and subsidiary rights including • Novelization, (when a book follows the movie) • Published music, • TV, etc. • Sales to Independent TV Stations • College rights for campus screenings • Music sales for film soundtracks • Film related merchandise (toys, etc.)

134 International Revenue Sources Sale of territorial motion picture rights including but not limited to: • Theatrical exhibition • Non-theatrical exhibition • Airplanes- (rights for in-flight movies) • Hotels • Military bases and other facilities • Pay television systems for delivery by • Cable • Satellite delivery & wireless mobile • Pay-per-view and etc. • Internet and Internet-television subscription and VOD sales • Network and Local commercial television stations (syndication) • Home video including DVD, Blue-ray and other emerging technologies • Ancillary and subsidiary rights including • Novelization, (when a book follows the movie) • Published music, TV, etc. • Sales to Independent TV Stations • College rights for campus screenings • Music sales for film soundtracks • Film related merchandise (toys, etc.) The China Market China is the fastest growing movie market in the world as many new cinemas have been opened across China in recent years. In 2015, the China market grew by 50% and totaled 18% of the global movie market. RSL has completed a 5 page analytical summary on the China market that can be found at the link below: http://nebula.wsimg.com/7129304e4ece55b7b807f83f8b6ac860?AccessKeyId=9E533268DA51246EF35 E&disposition=0&alloworigin=1

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How Movie Distribution Works

Here is the path a film usually takes to get to the local theater:

• Someone has an idea for a movie. • They create an outline and promote interest in the idea. • A studio or investor decides to purchase rights to the film. • People are brought together to make the film (screenwriter, producer, director, cast, crew). • The film is completed and sent to the studio. • The studio makes a licensing agreement with a distributor. • The distribution company shows the movie (screening) to prospective buyers representing the theaters. • The buyers negotiate with the distributor on which movies they wish to lease and the terms of the lease agreement. • The prints are sent to the theaters a few days before the opening day. • The theater shows the movie for a specified number of weeks. • Audiences buy a ticket and watch the movie. • At the end of the engagement. The theater returns the print back to the distributor, and makes the agreed payment on the lease agreement.

RSL will seek to bypass domestic and international distributors and self-distribute wherever possible in order to control and optimize marketing and advertising expenditures and eliminate inflated distributor fees and costs.

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Capital Funding Alternatives

Overview The equity capital that RSL is seeking to raise will serve as the foundation for a sound capital structure that is designed to circumvent the exploitive “Hollywood” status quo and reward equity investors with superior returns for the risks they take. This goal will be accomplished as follows: • Raise the equity upfront to finance the base development and production costs of each project. • Eliminate studio and other conventional distributors from the investment equation by financing advertising through RSL. This will be achieved by exploiting conventional and unconventional sources of industry debt, pre sales and spend rebates / tax incentives to leverage RSL’s equity base. • Employ highly sophisticated distribution professionals to ensure global distribution on an ROI effective basis. • Focus exclusively on digital distribution to eliminate print costs. • Carefully manage the Media Buy budget to target the optimum markets that are likely to create an ROI that exceeds RSL’s target ROI minimum of 50%.

This approach should have a material effect in reducing total Media Buy Costs as well as distributor fees and overhead/profits that are often imbedded in the promotion and advertising costs.

Debt, Partner & Incentive Sources of Funds RSL has additional debt and government incentive sources of capital to leverage the RSL balance sheet, to mitigate certain equity risks and or to finance the Advertising budgets for each film. The sources of these funds can be summarized as follows: • Incentives/Subsidies/Production Spend Rebates Nations, states and municipalities often offer special tax incentives to film producers to induce them to film in their localities. These incentives typically range between 10% to 30% of qualifying production spend representing a near cost free source of capital. RSL will be pursuing them very aggressively as a source of funds for recoupment purposes and or to pay print, advertising and promotional costs. RSL will be locating its primary operations in New Zealand where up to 40% of the qualifying production spend is available to be rebated by the government. When analyzed in its entirety, New Zealand has the most desirable rebate and production value structures available in the industry. All sales taxes incurred during production are 100% rebated on a monthly basis and when this is combined with there being no capital gains tax and other tax mitigation advantages the combination of these factors will have a very positive and material impact on the earnings of RSL. They are not included in the financial projections out of conservatism. However the capital rebates and tax benefits act as a hedge against revenues that fail to meet expectations.

137 The actual amounts and terms of these incentives can vary on a film-by-film basis therefore; RSL will exercise great care in balancing the benefits of the incentives with the creative needs and financial profiles and locations as they relate to the requirements of individual projects.

• Brand Integration Revenues All of the RSL films are set in the modern age so they are excellent candidates for brand integration revenues from firms who want to promote their brands within the movies. These can be a very substantial source of cost free capital and revenues for RSL.

• Bank Debt The strength of RSL’s balance sheet will likely permit the use of bank debt as a low cost source of funds to finance up to 30% of production costs once RSL is established as a successful going concern.

• Gap/Mezzanine Financing Certain project profiles with strong international market potential may qualify “Gap” financing. This type of mezzanine financing is typically secured by the unsold distribution rights to specific foreign markets. It can provide up to 10% to 20% of production costs and is normally subordinate to bank debt so its costs of funds with reflect the additional risk profile.

• Foreign Pre-Sales

Pre-sales of individual film project distribution rights will be made to specific foreign markets as points of validation for the movie concept and as a source of funds for recoupment/underwriting and or to finance domestic marketing budgets.

• Partner Equity

While it is not a specific strategy at this point, RSL may elect to enter co-production or partnership arrangements with certain third parties to source additional equity capital for individual projects. This could be a valuable risk management tool for RSL that could also enable RSL to advance the pace of project development and production while enhancing the risk adjusted ROI.

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138 Project Capital Structure Example and Capital At Risk Summary As a point of reference, please consider the chart below that summarizes a potential capital structure scenario for a RSL project with RSL functioning as a corporate going concern. It also illustrates RSL’s plan to minimize actual RSL capital at risk.

Description Use of Funds Source of Funds % Production Budget $30,000,000 55% Marketing Budget $24,000,000 45% Total Uses $54,000,000 100% Subsidies $6,000,000 11% Brand Integration $10,000,000 19% Bank Debt $7,500,000 13%

Gap $3,750,000 7% Pre-Sales $3,750,000 7% Sub-Total Sources $31,000,000 57% RSL Capital At Risk $23,000,000 43% Totals $54,000,000 $54,000,000 100%

The above scenario is materially different from the conventional film finance model in which marketing costs are typically outsourced to distributors and the above funding sources are used to reduce the amount of equity required to fund production costs. While the RSL approach requires more initial equity, it eliminates the often very negative influence of distributors on the distribution strategy and dramatically reduces their bloated fees and cost structures. This should have the effect of materially reducing the revenue threshold for attaining RSL’s target project level ROI of 50%. Early RSL projects will have greater capital at risk until the corporate credit profile is well established.

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“Revelations” Concept & Investment Summary

This section on “Revelations” is intended to demonstrate one example of the level of thought that goes into the creation of each RSL project prior to reaching the pre-production phase. The dynamic approach to film making that RSL advocates requires the sourcing of extraordinary stories that lead viewers through the full spectrum of human emotions with themes that stimulate their imaginations and inspire their hearts, minds and spirits. Finding and developing such material is the biggest challenge and opportunity of the RSL business model. To demonstrate that such stories do exist beyond theory, we will focus on the RSL project “Revelations” as one example. The core concepts of “Revelations” are so strong that they actually inspired the formation of the RSL business model. This summary is designed to highlight the level of thought that has gone into creating each of the RSL projects. It is very important that all films produced by RSL achieve the goals of its business model and demonstrate the global box office power of an inspirational film that transcends cultural differences, and illuminates the minds of viewers with themes that directly relate to their own life experience. RSL believes that the film “Revelations” can achieve this goal, and potentially launch a revolution in film.

Brief “Revelations” Synopsis “Revelations” begins with Cliff Donahue traveling from Texas to the USSR on oilfield business in 1979 at the height of the Cold War. Cliff meets Julia who is an Olympic figure skater in training in Volgograd (Stalingrad). They discover a strong mutual attraction that climaxes in a near death experience that seals a bond of deep affection between them that transcends the Cold War. They are torn apart when the KGB forces Cliff to leave Russia as the USSR invades Afghanistan but they are briefly reunited at the winter Olympics at Lake Placid in early 1980. Julia wins the gold medal in awe-inspiring fashion as she channels her great affection for Cliff into her performance. She leaves Cliff with her medal and a promise of eternal devotion. Politics keeps them apart but their bond endures and they are reunited in 1991 in Moscow after the fall of the USSR. Julia has achieved her dream of being a prima ballerina at the Bolshoi and her achievements have elevated her to the status of a national icon. Julia's father has become a senior political figure in the turmoil of post Soviet Russia. Their happy reunion is soon interrupted when they become pawns in a ruthless conspiracy to overthrow the new Russian government. Cliff and Julia are forced to overcome extreme obstacles and violence to defeat the plot so they can finally share a life together.

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140 Key Story Structure Elements

“Revelations” is a romantic, action thriller with a story structure similar to “Avatar”, “Titanic” and “Dances with Wolves”. As such, it embraces a romantic/cultural immersion film structure that has contributed to the greatest box office successes in movie history. Please consider the following:

Film Production Domestic Total USA DVD Total Revenue as ($ Millions) Budget Box Office Box Office Sales/Rentals Multiple of Budget Avatar $237 $750 $2,740 $143 12.17x Titanic $200 $660 $1,901 $324 11.70x Dances With Wolves $ 19 $184 $ 424 Unknown 22.33x

Note: Titanic is believed to have achieved up to $1.2 billion in total DVD sale and rental revenues.

At the core of each of these films is a romantic thriller that transcends a hostile social or political divide as well an illuminating plot that exposes the reality that the opposing cultures have much in common on a human level. These stories expose the political and social myths that divide cultures, and thereby serve as a metaphor to a better understanding among all people. This approach succeeds because it appeals to the desire of most people to achieve social peace and enjoy romantic relationships that are grounded in deep affection and an enduring commitment to each other’s happiness.

Avatar and Titanic relied heavily on special effects that drove up their budgets, and reduced their revenue multiples of production costs. However, “Dances with Wolves” demonstrated that this story structure could be very successful on an international basis without huge investments in special effects.

In lieu of special effects, “Revelations” contains awe-inspiring sequences of Olympic figure skating, ballet and dancing that are supported by inspirational music. A primary goal of the “Revelations” film concept is to demonstrate that powerful, theme and character driven stories with high levels of performance artistry can compete with superficial big budget films that rely on technology driven effects.

Key Thematic Elements "Revelations" is a triumph of the human spirit story about a young Soviet woman who overcomes personal tragedy and harsh life obstacles in the USSR to succeed as an international performer at the highest levels of achievement through hard work and relentless dedication to her artistry. It is also an illuminating cross-cultural political story that exposes the many false myths about the Russian people that often dissolve into admiration on a human level. It is an effort to create a common bond of higher awareness between the Russian and American people that is a metaphor for human understanding and compassion across all cultures. Many Russian and other peoples long for the freedom that most Americans and Europeans take for granted, and some are willing to risk their lives to achieve it.

141 "Revelations" is also an inspirational love story that demonstrates that extraordinary love at the highest level of human consciousness can be found across cultures if it is grounded in deep affection and a spiritual bond that transcends ordinary relationships. Such a love is a window to a higher awareness that can be so special that people will risk everything for a chance to share a life together. “Revelations” is an attempt to reawaken the audience to the potential of what a man and a woman can experience together when they discover an enduring bond of mutual admiration and warmth where each person is dedicated to the other's happiness. It demonstrates that truly making love is not about sex, but achieving an intimate connection that can survive the difficulties of life through resilient bond of mutual affection. It is designed to expose young men and women to an inspiring alternative approach to their romantic lives in a global culture that has largely lost touch with what is truly important in love and life. Global audiences are craving substantive films that illuminate their minds, and and lead them through the full spectrum of human emotions in deeply affecting ways. The cross-cultural elements of this story have the potential to attract international audiences with powerful themes that transcend culture and nationality. Taken all together, this film can be a spiritually uplifting and transformational film because it engages the audience at the highest levels of the human experience, and lights the way to a higher consciousness about the most important issues of our lives. It contains awe-inspiring levels of performance artistry and music as well as some commercial elements to draw audiences to experience its compelling thematic aspects. It seeks to demonstrate that performance artistry at the highest level that engages the human spirit can be more entertaining than the most spectacular special effects. "Revelations" is inspired by experiences from the screenwriter’s own life so it is grounded in real thoughts and powerful emotions. It combines the ultimate love conquers all story with a riveting political thriller that will entertain while illuminating the viewer’s minds with compelling perspectives on some of the most relevant personal and political themes of our time.

Key Themes

Emotionally and intellectually engaging themes are vital to maximizing the success of any film.

• True love grounded in deep affection and devotion can conquer extreme obstacles. • A highly emotional romantic experience between characters from adversarial cultures who endure life’s tragedies and overcome extreme obstacles to pursue true love’s final resolution. • The triumph of the human spirit in overcoming all impediments to achieve great things. • The tragic conflict between the beauty of the Russian spirit and the darkness of its political realities. • Good triumphs over extreme evil in the end. • Many Russians are good people who dream of freedom and some are willing to risk everything for it. • Americans and Russians share much in common and negative perceptions about each other often dissolve into admiration on a human level. • The tragic loss of a loved one can be a force for achievement at the highest levels.

142 • The contrast of artistry and romance at the highest level with the darkest elements of political conflict. • An American is immersed in a supposedly adversarial culture and discovers much in common with the Russian people on a human level.

Key Commercial Elements

The following key elements could make “Revelations” an extraordinary viewing experience:

• Riveting dramatic scenes that are driven by the strength of the characters and story elements rather than costly special effects driven action sequences. • Well developed characters lead the audience through the full spectrum of emotions on an epic scale. • Awe inspiring ballet, dance and ice-skating sequences at the highest professional level. • An articulated musical score that enhances the visual elements and emotional progression. • Compelling romantic scenes that focus on deep affection driven sensuality rather common lust. • Intense conflicts from the political through the personal level. • Visually stimulating digital cinematic photography. • Strategic casting of memorable characters. The audience will be placed into an unstable period of time to fall in love and cheer on the defiance and relentless determination of the main characters in this beautifully epic story.

“Revelations” Investment Summary

RSL intends to produce a romantic thriller motion picture “Revelations” written by Donald Skipper under a proposed limited liability company and registered under the name, Revelations, LLC. (”RLLC”) The feature will be executed as an independent film with worldwide distribution. The estimated production funding needed is $27,500,000 USD. The motion picture, “Revelations’ is scheduled to be filmed in California, Michigan and Russia and parts of Europe to utilize tax advantaged leverage, film subsidies and to minimize production costs without compromising production quality. It will be filmed to achieve a MPAA rating of PG or PG-13 to maximize global audience potential.

Investment Highlights

Major reasons for investing in “Revelations’:

• The use of a romantic thriller/cultural immersion story structure that has contributed to the two biggest international box office successes in movie history. • Use of multiple genres and story/thematic elements that should appeal to international audiences. • The compelling nature of the story and its strong thematic, visual and artistic elements. • A low cost, but commercially viable motion picture with strong international revenue potential. • The realistic opportunity to create income that could be multiples of the film’s budgets.

143 • Partnering with experienced and seasoned production staff with a verifiable track record of creating films with high artistic standards. • Potential risk adjusted ROEs from theatrical and ancillary revenue sources that could dwarf other investment opportunities in the capital markets today.

“Revelations” Investment Potential

“Avatar” is the largest revenue producing movie of all time with current box office receipts estimated at above $2.8 billion. More importantly, only $750 million (27%) of the revenues were in the USA, and this is very strong evidence of the potential of international film markets.

While “Revelations” cannot match the production budget or special effects of “Avatar”, it does have very similar romantic and cultural immersion themes and strong visual, artistic and sound effects that should create substantial international viewer interest with proper distribution and promotional efforts that RSL can deliver.

At $27.5 million, “Revelation’s” production budget is about 10% of “Avatar’s”, and it has the potential to penetrate the same international markets as “Avatar”. If “Revelations” reaches 9% of “Avatar’s” total box office receipts, it would realize $250 million of revenue before DVDs and aftermarket revenue sources. “Avatar” generated approximately $130 million of revenues in Russia and Ukraine, and only 15% of that level would be required to recover “Revelations” production costs.

There is also a reasonable possibility that the Russian focus of the film and the international, cross cultural romantic theme could stimulate box office receipts in the former Soviet Union that approach “Avatar’s” levels.

“Revelations” represents a lucrative investment opportunity that can be summarized as follows:

• The story structure is very similar to “Avatar”, “Titanic” and “Dances with Wolves” that were all huge box office and investment successes. • The multiple genres offer something to attract audiences across the full global audience spectrum. • Awe inspiring performance artistry and music will enhance the appeal to discriminate audiences. • The Russian content should create substantial interest and revenues in Russia, Ukraine and the former Soviet Union where 277 million people reside. Multiples of production costs can likely be recovered in the former Soviet Union alone. • American movies are a very popular and low cost source of entertainment in most of the republics of the former Soviet Union as well as China and India. “Avatar” is strong recent evidence of their revenue potential. • The romantic cross cultural themes and compelling artistic and dramatic elements should serve as a strong foundation for U.S. box office performance. The story contains strong universal themes in multiple genres that should drive global viewer interest.

144 • Star power will not be used as a corner stone for success unless it is structured with significant ‘back end” compensation that is tied to actual box office success. • RSL will actively source and develop new acting talent that can deliver strong performances at much lower cost points. RSL believe in the box office power of introducing sensational new talent in movies. • Movie revenue resiliency in low economic times and emerging markets i.e. Russia, Ukraine, China, and India. • “Revelations” and the other RSL projects are specifically designed to appeal to both discriminate and indiscriminate viewing audiences and to both sexes of all age groups across many cultures. • Multiples of production costs can likely be recovered with net DVD rental/sales and TV/Cable right sales alone. • Out of the box marketing and internet promotion.

145

“Revelations” Production Execution Example

“Revelations” Timetable The following is a tentative timetable for the investor to better understand the time involved in making a motion picture. These are not firm commitments, but are anticipated time periods and may change as need requires. These time frames will begin upon release of production funds from the escrow account. 1st month • Pre-Production • Market acceptance study • Marketing of Film • Music Rights & Licensing • Secure Casting Director • Begin Casting & Crew • Begin Location Scouting • Lock Production Schedule • Allocate Equipment, Props & Costumes • Begin set construction 2nd month • Locations secured • Casting & Crew completed • Begin rehearsal • Equipment, props & costumes secured 3rd month • Establish Editorial • Begin principle photography 4th – 6th months • Continue Editorial • Marketing & Press Kit completed • End principal photography • First cut completed 7th - 8th months • Begin music composing • Begin sound cutting • Final cut, lock picture • Score Music & Mix sound • Folie completed • Final Cut to theaters, sales agents and international distributors

146

“Revelations” Release Schedule Example

Below is a summary of a potential release schedule for “Revelations” as a point of reference for the time lines for individual projects from investment to release Months After Approximate Market Initial Release Release period • Domestic Theatrical 12-14 months from green light 2 – 3 months

The following are dated from the initial domestic theatrical release:

• Foreign Theatrical 1 month 2 months • Domestic Home Video (DVD)* 2-6 months Infinite • Domestic Pay-Per-View 4-9 months 3 months • Domestic Pay Television 10-18 months 12-21 months • Domestic Network Television 30-36 months 18-36 months • Domestic Cable Television 30-36 months 3-5 years • Domestic Syndication 30-36 months 3-15 years • Foreign Theatrical - 4-6 months • Foreign home video 6-12 months - • Foreign television 18-24 months 18-30 months

The accessibility and growth of the foreign markets as well as the other ancillary markets (video, cable, etc.), coupled with the dominance of American made films has created a demand and an opportunity for the American film producer. According to the U.S. Department of Commerce, entertainment ranks behind only Aerospace/Defense as the United States’ leading export. Due to increased foreign demand, as much as 60% to 70% of a film’s revenues can now come from foreign market distribution. As the global economy has emerged, competition among distributors for completed quality films has increased, while the necessity for a producer to engage a distributor to sell films has decreased. European and Pacific Rim buyers all maintain offices in the U.S. for the purpose of acquiring independently produced U.S. films. In addition, the major American studios maintain divisions for the acquisition and distribution of low cost independently produced U.S. films.

147

RSL Management & Business Plan Execution Profile

Overview

There is perhaps no worse investment profile than conventional movie production companies or independent films. Almost the entire “Hollywood” movie production and distribution system is structured to exploit investors rather than reward them for the risks they take. In addition, almost all movie producers employ the deeply defective story development practices that result in the consistently dreadful and uninspiring films that can be found in movie theaters. Not surprisingly, these ill-conceived films create consistently poor box office performance that loses a lot of money for investors who make the mistake on investing in the existing movie paradigm.

Despite the overwhelming evidence that supports the assertions above, movie investors across the earth invest in production slates of large studios or related producers with studio distribution deals or in independent films that offer almost no hope of investment success. Conventional wisdom is for investors to partner with existing producers who have a successful track record of producing major films.

The Big Issue With Conventional Film Investment

Film investors consistently overlook the fact that there are over a hundred movie production companies that can produce a film with quality production values but almost none with a successful track record of producing superior ROEs for investors. It is stunning to see the billions of dollars that are lost by investors on ill-conceived and bloated budget film projects that are poorly designed to inspire large global audiences. The simple fact is that over 85% of film projects lose money for investors because they are not well designed to achieve mass-market appeal on modest budgets that will create superior ROEs.

This money losing problem, is not unique to a few producers, it is the systematic result of deeply flawed culture of story development and business practices throughout the global film industry.

The RSL Alternative

Given the very poor investment track record of almost all movie production companies and professionals, it makes no sense for RSL to partner with companies that are deeply committed to the failed industry status quo. To successfully implement the RSL business plan, RSL must first raise the capital to create a sound foundation for launching a new audience and investor focused movie-making paradigm outside the existing industry.

The ultimate goal is to create an “Anti-Hollywood” that produces great films that inspire large global audiences and remain focused on delivering superior ROEs to investors. This profile will also be designed to attract the very best artists in the industry to a culture that is devoted to the art and craft of film making that transcends superficial, CGI driven “Hollywood” productions.

148 The initial Primary Capital Facility proceeds will enable RSL to selectively employ successful production and distribution personnel and/or firms to minimize production costs and maximize global distribution while creating a film that can allow the movie to reach its full revenue potential. RSL will demand cost effective fiscal management while maintaining high quality of production values for production, sales and distribution. Most importantly, this approach allows RSL to control the creative process and business practices to insure that the RSL vision is realized for audiences and investors who invest in RSL films.

RSL Leadership & Management

Please revisit pages 14 & 44 of this business plan for additional information on RSL leadership. All to be determined (“TBD”) executives and film professionals will be submitted by the CEO to the RSL board of directors for approval prior to hiring. Please see Exhibit # 1 for full Professional Summaries.

• Donald G. Skipper – Founder - Chief Executive - Creative Officer • Oversee all operations of RSL • Oversee and manage story sourcing and development • Serve as the primary interface with capital and industry partners

• Alan M. Jones – Senior Partner – To Be Determined

• Chief Operating Officer – To Be Determined

• Oversee and manage all preproduction, production and postproduction operations of RSL

• Chief Marketing - Distribution – Risk Management Officer - To Be Determined • Oversight of packaging, team building, sales, marketing, advertising, distribution, government subsidies/rebates, brand interface and risk management. • CFO – Executive Producer

• Oversee all capital makers, accounting, financial and treasury operations of RSL

• Production Partner(s) – Producers - To Be Determined

• RSL is committed to achieving the highest quality production values for all of its projects but the top directors and talent will not engage in serious negotiations without a funding commitment / capital in place. Upon receipt of Primary Capital Facility funding, RSL will engage key producers and directors about partnering with RSL on co-production of the RSL slate. Careful consideration will be given to finding the right production teams with the highest quality production track records and an eagerness to embrace the RSL vision.

This approach also allows RSL to partner with ROI focused producers to secure their commitments to RSL projects. The goal is to insure the highest, cost effective production quality so that full revenue and income potential can be achieved. RSL will nominate production partners and directors prior to

149 the start of each production for approval by the RSL board of directors and for pre-approval by the Completion Bond provider. • Director(s) TBD

To be determined to match each film profile. Upon availability from of the Primary Capital Facility, RSL will conduct a search for an “A List” or sensational young directors to lead the filming of its projects. Careful consideration will be given to finding the right director to position each project to achieve its full cinematic, box office and ROI potential.

• Casting Director(s) TBD

RSL will arrange for top casting directors to lead the assimilation of the key acting talent for each project. Careful consideration will be given to finding the right casting director to position each project to gain the commitments of actors that will allow it to reach its full cinematic and box office potential. A successful track record and key industry contacts will be the determining criteria for casting director.

RSL will submit nominees for Production Principle, Director, Line Producer, Casting Director and key cast members for investor and Completion Bond approval as part of the 90 day production plan and budget submissions for each project.

All major leadership will be approved by the RSL board of directors prior to employment in conjunction with the Completion Bond provider’s contractual obligations and oversight.

150 Movie Classifications Data

RSL is committed to producing films in genres and within ratings that will maximize potential global audiences. Therefore, RSL films will be almost always within the PG-13 classifications. Top-Grossing MPAA Ratings 1995 to 2010

Movies Total Gross Average Gross Market Share

1 PG-13 1,779 $73,209,751,905 $41,152,193 44.70%

2 R 3,200 $48,017,953,290 $15,005,610 29.32%

3 PG 857 $31,424,432,168 $36,667,949 19.19%

4 G 247 $9,022,611,000 $36,528,789 5.51%

5 Not Rated 2,280 $1,686,746,918 $739,801 1.03%

Note: All RSL films will be rated PG-13 to maximize the potential audience size.

Top-Grossing Sources 1995 to 2010

Movies Total Gross Market Share 1 Original Screenplay 3,565 $68,522,070,045 41.84%

2 Based on Book/Short Story 1,167 $33,434,780,355 20.42%

3 Sequel 333 $24,965,385,615 15.24%

4 Remake 194 $9,400,377,390 5.74%

5 Based on Real Life Events 1,156 $8,816,203,245 5.38%

6 Based on TV 126 $6,266,212,313 3.83%

7 Based on Comic/Graphic Novel 73 $4,976,324,145 3.04%

8 Based on Play 151 $1,597,159,875 0.98%

*Note: All RSL projects are original screenplays with the limited exception of “Divided We Fall”.

151

Top-Grossing Creative Types 1995 to 2010

Movies Total Gross Market Share

1 Contemporary Fiction 3,417 $80,191,368,263 48.97%

2 Kids Fiction 275 $17,221,938,270 10.52%

3 Fantasy 373 $16,903,116,413 10.32%

4 Science Fiction 289 $16,205,150,490 9.89%

5 Historical Fiction 709 $14,078,811,728 8.60%

6 Dramatization 465 $9,397,138,778 5.74%

7 Super Hero 53 $7,019,280,990 4.29%

*Note: All RSL projects are contemporary fiction stories.

Top-Grossing Genres 1995 to 2010

Movies Total Gross Market Share

1 Comedy 1,564 $39,646,824,825 24.20%

2 Adventure 439 $31,740,471,045 19.37%

3 Drama 2,708 $30,201,459,150 18.43%

4 Action 495 $28,205,526,338 17.22%

5 Thriller/Suspense 444 $11,013,424,118 6.72%

6 Romantic Comedy 346 $9,874,921,590 6.03%

7 Horror 280 $7,881,742,103 4.81%

8 Documentary 832 $1,830,982,845 1.12%

9 Musical 100 $1,616,888,048 0.99%

*Notes: All RSL projects have action, adventure, drama, and thriller/suspense elements.

152 Exhibit #1 - Executive Profiles

Donald G. Skipper - Professional Summary

Seasoned business and capital markets professional with vast financial, operations and analytical experience in many industries through multiple economic, capital markets, political and industry cycles. Vast creative and analytical experience with the motion picture industry.

Long term student of history, politics, geopolitics, business, economics, markets, financial and risk analysis, psychology, human nature, sociology, motion pictures, the capital markets and the ways all of these elements correlate with one another.

Work History

40 years - Business and capital markets professional

• 8 years – (1975 – 1983) - Multiple corporations in project/operations management in the energy industry. • 21 years – (1985 – 2006) - First City National Bank (6 years) and BMO Capital Markets (16 years) in executive level corporate sales, relationship development, energy commodities, credit and business risk analysis and extensive corporate financial transaction originations. • 10 years – (2006 – Present) - CEO of Renaissance Partners, LLC – Professional consulting, analytical, capital raising, financial structuring and business plan assignments in multiple industries. • 3 years – (2013 – Present) - CEO of Renaissance Studios, Ltd. – Platform for launching a fully integrated motion picture development and global distribution studio grounded in a new and compelling story development, production, distribution and investment business model.

153 Key expertise includes: • Author of 21 major motion picture screenplays over 25 years. • Long term financial, creative, market and business model analysis of the motion picture industry. • Research and development of advanced content evaluation metrics, business practices and screenwriting methodologies for the motion picture industry. • C-Level capital markets relationship management and development • Origination, structuring and negotiation of billions of dollars of large corporate financial transactions • Oversight of deal and legal teams on large corporate contracts and transactions • Financial, risk and credit analysis and structuring in many industries • Seasoned analytical grasp of the capital markets across many industries • Developer of advanced capital markets evaluation metrics • Understanding of disruptive technologies and methodologies in many industries • Business plan writing and evaluation in multiple industries • Extensive operations and project management in the energy industry • Marketing and structuring of large energy commodity transactions • In depth analytical understanding of the motion picture, energy, real estate and technology industries • Poised professional communicator at an executive level • Long term experience with business proposal preparation and presentation • Decades of marketing experience and market analysis • Highly developed ability to see the big picture of any situation and act accordingly to achieve success • Successful innovator in all the activities listed above

Key experience can be summarized as follows: • 30 years - Sales, marketing and relationship development • 21 years - Energy, energy banking and energy commodities experience • 30 years - Sales, marketing and relationship development • 25 years - Marketing and strategic interaction with executive level decision makers • 25 years - Originating and structuring billions of dollars of corporate finance transactions • 25 years - Movie screenwriting - As a sideline career activity • 22 years - Analyzing corporate business plans, capital structures and financial models • 22 years - Risk and credit analysis, deal structuring and financial transaction execution • 21 years - Leading the negotiation and execution of financial documents and contracts • 18 years - Leading financial transaction deal teams • 8 years - International project and operations management in the energy industry

154 • 5 years - Energy commodities marketing • 9 years - Consulting assignments in multiple industries • 9 years - Analysis, research and development in the motion picture industry • 3 years - Corporate insolvency work outs • 3 years - CEO Renaissance Studio, Ltd. • 1 year - Chief Financial Officer & Co-Founder of a high technology firm An accumulation of vast experience in project/operations management and corporate finance through the origination and structuring of billions of dollars of corporate finance transactions with no monetary losses. In depth knowledge of upstream, midstream and downstream segments of the energy industry. Long term financial and strategic analysis of these segments from a credit, capital markets and operation point of view. Intimate knowledge commodity price risk and reserve asset portfolio management techniques from a shareholder value optimization point of view. Managed a sophisticated quantitative model that tracked and evaluated over 50 independent and public oil and gas companies from a share price performance perspective. I created this system as a basis for evaluating the effects of strategic decision making on asset acquisitions, divestitures, share repurchases and hedging on share price performance. This system is a very effective analytical and strategic decision making tool for share price optimization. A long-term successful track record in risk analysis, deal structuring, financial transaction execution, leading negotiations and execution of financial documents and contracts, originating financial transactions and international project leadership and operations management. Exposure to multiple economic, financial, capital market, political, and energy commodity cycles that provide a sound analytical foundation for evaluating business models and scenarios in many industries.

Key Skill Sets • Seasoned strategic vision and judgment. • Proven ability to see the big picture of complex situations and develop innovative solutions. • Strong imagination with a focus on finding out of the box solutions to difficult problems. • Extensive financial modeling preparation and analysis. • Insightful ability to evaluate credit worthiness and to devise innovative credit structures that resolve issues and create competitive advantages for my employers. • Highly developed understanding of economics and geopolitics as they relate to business and the capital markets. • Well developed knowledge of the capital markets. • Persuasive, professional communicator.

155 • Valuable insights derived from long term exposure to economic, business and capital markets cycles, and to successful and unsuccessful business models across multiple industries. • A sound grasp of the political dynamics at both the governmental and business level. • Strong leadership and interpersonal skills. • Ability to analyze and convert innovative concepts into compelling business plans. • Access to a large network of capital sources and human resources. • Understanding of accounting and treasury management dynamics. • Lengthy operating and project management experience in energy manufacturing & services. • Proven team builder with strong project management skills across the financing and marketing disciplines. • The skill to see the big picture of client and business objectives and to devise transaction structures and business plans that achieve strategic goals and maximize shareholder value. • A highly developed ability to see the core essence of complex situations and to evaluate business opportunities based on their intrinsic merit and commercial potential. • Extensive interaction with executive level decision makers and investors as well as analyzing corporate business plans, capital structures and financial models. • Analyst and author of numerous business plans in multiple industries. • Analyzing business and scientific concepts for intrinsic economic merit and converting them to commercially viable business plans.

Movie Industry • Author of 21 major motion picture screenplays and one published novel over 25 years. • Over two decades of intermittent interface with the movie industry. • Exhaustive financial, creative, risk, markets and capital markets analysis of the motion picture industry over the last 9 years. • Development of advanced content evaluation metrics that support the creation of compelling movie concepts and screenwriting methodologies to create cost effective movies that 1) skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum international demographic audiences and 2) deliver exceptional ROEs to investors. • Development of an innovative business model and plan for the motion picture industry that 1) avoids the many flaws of the obsolete industry culture, 2) exploits the huge latent movie market demand. 3) exploits irrational public equity market valuation metrics and 4) delivers risk adjusted ROEs that dwarf other investment alternatives. • CEO of Renaissance Studio, Ltd. A firm created to revolutionize the movie industry by developing high quality, modest budget films that inspire large global audiences and deliver superior ROEs to sophisticated investors.

156

Alan M. Jones – Senior Partner Alan has over 30 years of experience in the Education, Media and Entertainment industry. As an award winning Media and Apple Distinguished Educator in 2008 and a team member with PuppetWorks MOCAP, he was jointly awarded a Canadian GEMINI for “Technical Achievement in Motion Capture development” in 1998 by the Academy of Canadian Cinema and Television. (as used by Disney Feature Animation and Jim Henson’s Creature Shop). Alan is also recognized a pioneer member of ACM SIGGRAPH the New York–based Association for Computer Graphics and Interactive Techniques.

In 2013, while at the Shanghai Institute for Visual Arts, Fudan University (SIVA) in China, Alan acted as Program Supervisor in the implementation of the Animation and Creative Content Program. The program is a world-class three-year undergraduate program utilizing innovative technology and taught by an international-standard faculty, with the objective of nurturing the future leaders of the Chinese Creative Entertainment industry. He supervised the development of the highly innovative hybrid production Centre including the training pipeline facility for Film, Animation, Television and Games production.

In 2010, as the Chair of Applied Media at the Higher Colleges of Technology the largest educational institution in the UAE, Alan was a senior member of the Divisional Academic Team with responsibility for developing program accreditation, program review and assessment strategy. He also developed significant alliances with not only academia but also with local and international Media industry, such as SKYNews Arabia and CNN Arabia. One of Alan’s major innovative achievements at HCT, was the unique mixed–method 360° digital collaboration lab to enhance teaching and learning, an initiative developed in cooperation with major media partners in Abu Dhabi.

In 1994, Alan founded developed and managed the highly acclaimed Animation Arts Centre at Seneca College of Arts and Technology in Toronto, Canada. Many of his successful graduates were on the production team credited with a GENIE and ACADEMY AWARD for the best-animated short film “Ryan” (2004) by Chris Landreth.

157 His current film credits include, Associate-Producer and business development for a slate of A- list Hollywood feature films including Combato, The Bill Underwood Story, The Black Dove, The Algebra of Death Franchise and Quarantine Island. Alan is also accredited as Head of Graphic Production for News and Variety shows at the CBC (Canadian Broadcasting Corp), Canada, Head of Animation for a 3D Animated children’s show, developed in New York for US TV networks and as Executive Producer and Producer for several innovative “Arabic styled” Music Videos screened on MTV Arabia and live performances produced in the UAE. He also acts as adviser in Digital Media Training for the Education, Corporate and Entertainment sectors.

As Director of Film and Animation Production at CreativeJABS Entertainment, Alan has recently developed “high profile” Sino-Western entertainment partnerships and co-productions in China resulting in collaborations in upcoming Film and Animated Features. He also acted as advisor in the Executive Film Production process.

158

Exhibit #2 – New Studio Template Example

The following article appeared online on Bloomberg at the following link: http://www.bloomberg.com/news/2014-03-11/producer-simonds-to-start-new-film-studio-with- hony-capital-1-.html?cmpid=yhoo

The RSL vision and business plan were developed well before the publication of the following article. However, the article serves as a validation of key points of the RSL strategy: • The ability of a new studio to enter into direct distribution agreements with the theater chains. • A confirmation of the strategy of making mid-budget films. • The willingness of major funds to invest large amounts of capital in a new studio.

RSL asserts that its filmmaking vision, story development methodologies, business plan, initial film slate, franchise profile and IPO strategy are far superior to the strategy that is articulated in this article. Please consider the following comments on the article. • Simonds has had some limited success with “low brow” comedy films but almost no experience with genres outside of comedy that will appeal to large international audiences.

Bob Simonds Days Global Production Prints & Theater Est. Gross Distrib Est. To $ Millions Box Office Budgets Advertising Take Profit Fees Producer Career N/A $1,080 ($285) ($165) ($540) $90 ($178) ($88) Totals

*Note: The Marketing budgets above are estimated at $15 million per film on average which is well below industry averages. • Pritzger has never made a movie that made money. The “Enders Game” film was a $110 million production budget movie with at least an additional $30 million of advertising expenses. It achieved only $97 million of total box office and DVD revenues.

Movie/ Days Global Box Production Prints & Theater Est. Distrib Est. To Producer Office + Budget Advertising Take Gross Fees Producer DVD Profit $ Millions Enders 150+ $97 ($110) ($30) ($45) ($88) ($18) ($106) Game Gigi Pritzger N/A $267 ($227) ($80) ($134) ($174) ($44) ($218) - Career

159 *Note: The Marketing budgets above are estimated at $15 million per film on average which is well below industry averages.

Yes, DVD and other ancillary revenues can reduce the losses on some of the films but are very unlikely to move them into profitability much less appropriate risk adjusted ROEs to equity.

None of the films in Simonds’ and Pritzger’s filmographies were well designed to resonate with large international audiences. The bottom line on the article below is that TPG/Hony Capital are claiming that they will invest up to a billion dollars to make ten films a year by filmmakers who do not have track records of delivering strong ROEs in their careers. This is a classic example of the folly of funds investing in producers who operate within the film industry status quo. By extreme contrast, RSL will originate and develop its own cost effective films outside the film industry status quo that are well designed to resonate with very large international audiences.

Producer Simonds to Start New Film Studio With Hony Capital

By Anousha Sakoui Mar 11, 2014 10:50 AM CT

Hollywood producers Robert Simonds and Gigi Pritzker are building a new movie studio with a Chinese private-equity firm and an arm of U.S. buyout firm TPG Capital, planning to spend $1 billion in the next five years.

Hony Capital Ltd. is the anchor investor in the as-yet unnamed studio, which the partners said in a statement yesterday will make eight to 10 “star-driven, mid-budget films” a year and target the global market, including China.

“Seismic shifts in the entertainment industry have produced exciting new opportunities in content, production and distribution,” Simonds, whose credits include the Adam Sandler comedies “Big Daddy” and “The Waterboy,” said in the statement. He will be chairman and chief executive officer. Pritzker, whose Oddlot Entertainment produced the films “Ender’s Game” and “Drive,” will be on the board.

The deal is the latest example of Chinese investors’ interest in the U.S. film industry, just as the country’s movie market has surpassed Japan as the second biggest in the world. This month, a group led by Huayi Brothers Media Corp. agreed to invest as much as $150 million in a studio founded by Warner Bros. Pictures ex-president Jeff Robinov. In 2012, Dalian Wanda Group Co., operator of China’s largest theater chain, bought exhibitor AMC Entertainment Holdings Inc. for $2.6 billion including debt.

“We are uniquely positioned to successfully partner with traditional distributors in North America, expand in the vast Chinese market, and capitalize on new, still developing digital channels,” Simonds said.

160 Mid-Budget Films

The studio plans to finance, produce and distribute 10 films per year, targeting the mid-budget film market that studios have pulled back from in favor of so-called tent pole movies with the biggest production investments.

As part of the deal, the studio has direct distribution agreements with the largest North American theater chains, including No. 1 Regal Entertainment Group (RGC), No. 2 AMC Entertainment (AMC), Cinemark Holdings Inc. and Carmike Cinemas Inc. The arrangement should ensure wide release of the new studio’s films. AMC Holdings and is controlled by Wang Jianlin, China’s second-richest man with a net worth of $13.9 billion, according to the Bloomberg Billionaires Index.

A growing international demand for films has helped buoy the U.S. film industry in recent years. The Chinese box-office rose by about one-third in 2012, to $2.7 billion, overtaking Japan as the second-largest global market, according to statistics from the Motion Picture Association of America. From 2008 to 2012, the global box office rose by about one-fourth to $34.7 billion, with most of the growth coming from outside the U.S. and Canada.

Founding Partner

Management of the new studio will include Chief Operating Officer Thomas McGrath, former chief of Viacom Entertainment. Board members include David Bonderman, founding partner of TPG, and Frank Biondi, a former president and CEO of Viacom Inc. and a former chairman and CEO of Universal Studios. The studio was founded about 2 1/2 years ago by Simonds and TPG Growth, the midmarket investing arm of Fort Worth, Texas-based TPG.

Hony Capital, backed by Legend Holdings Ltd., the largest shareholder in computer maker Lenovo Group Ltd., has agreed a strategic partnership for film and television production with SMG Pictures, a studio backed by China’s largest entertainment conglomerates, according to the statement. Additional equity and debt are being provided by the business interests of Pritzker.

Senior debt financing for the studio was underwritten by JPMorgan Chase & Co. and Bank of America Corp. Raine Group LLC served as exclusive financial adviser to the studio.

STX Evaluation

STX did a great job of raising capital and using it as leverage to establish direct relationships with the major theater chains and international sales agents and distributors. They also did a seemingly good job of hiring a team of executives to execute their business plan. (See link below) https://stxentertainment.com/

161 However, a closer examination of the executive team reveals people with substantial industry experience but almost no successful track record of creating cost effective movies that consistently resonate with large international audiences and delivering positive ROEs to equity investors.

STX also has a fatal flaw in its business model and plan because they have not developed advanced movie content evaluation metrics or screenwriting methodologies that skillfully match a diversity of compelling resonance elements with the viewing preferences of broad spectrum international demographics. Instead, they are competing for movie content with everyone else in the movie industry from the traditional agency and other content sources that create movie projects that lose money for production equity over 85% of the time. They are also making the mistake of producing small and modest budget movies in very low revenue ceiling genres with concepts that have almost no mainstream or international market resonance potential.

STX Performance RSL followed the progression of STX since that time and has observed the many flaws in the STX business model, plan and content. Those concerns continue to manifest into reality:

• The "State of Affairs" TV series was been cancelled by NBC after 1 season. • "The Gift" was a minor financial success on a $5 million budget. Films like it can cover some overhead but they cannot drive exciting risk adjusted ROEs on a multibillion dollar capital base. • "Secret in their eyes" was a box office disaster that relied on aging “A List” actresses to carry a few poor concept.

STX Production Company - filmography

1. The Space Between Us (2016) ... Production Company 2. The Boy (2016) ... Production Company 3. Besties (2016) ... Production Company 4. Russ & Roger Go Beyond (2016) ... Production Company 5. The Foreigner (2016) ... Production Company 6. "State of Affairs: Deadcheck (#1.13)" (2015) ... Production Company 7. "State of Affairs: Here and Now (#1.12)" (2015) ... Production Company 8. "State of Affairs: The Faithful (#1.11)" (2015) ... Production Company 9. "State of Affairs: The War at Home (#1.10)" (2015) ... Production Company 10. "State of Affairs: Cry Havoc (#1.9)" (2015) ... Production Company 11. "State of Affairs: Ghosts (#1.8)" (2015) ... Production Company 12. "State of Affairs: Bellerophon (#1.7)" (2015) ... Production Company 13. Problem Child (2015) (TV) ... Production Company 14. "State of Affairs: Masquerade (#1.6)" (2014) ... Production Company

162 15. "State of Affairs: Ar Rissalah (#1.5)" (2014) ... Production Company 16. "State of Affairs: Bang, Bang (#1.4)" (2014) ... Production Company 17. "State of Affairs: Half the Sky (#1.3)" (2014) ... Production Company 18. "State of Affairs: Secrets & Lies (#1.2)" (2014) ... Production Company 19. "State of Affairs" (2014) ... Production Company 20. "State of Affairs: Pilot (#1.1)" (2014) ... Production Company 21. Bad Moms (????) ... Production Company 22. Hunter Killer (????) ... Production Company

STX Distributor - filmography

1. The Free State of Jones (2016) ... Distributor (2016) (USA) (all media) 2. The Boy (2016) ... Distributor (2016) (USA) (all media) 3. The Bye Bye Man (2016) ... Distributor (2016) (worldwide) (theatrical) 4. The Foreigner (2016) ... Distributor (2015) (worldwide) (all media) 5. Secret in Their Eyes (2015) ... Distributor (2015) (USA) (theatrical) 6. Desierto (2015) ... Distributor (2015) (USA) (all media) 7. Hardcore (2015) ... Distributor (2015) (USA) (all media) 8. The Gift (2015/VI) ... Distributor (2015) (USA) (all media) 9. Bad Moms (????) ... Distributor (2016) (USA) (theatrical)

Key Questions

• Are there any sustainable franchise possibilities in the announced STX slates above? • Are there any individual films in the future STX films that are likely to deliver strong financial risk adjusted returns to STX investors? • Are any of the STX projects well designed to appeal to broad spectrum international demographics? • Does it make any sense for STX to continue to source movie content from traditional industry sources that produce movies that lose money for production equity over 85% of the time? • Beyond the personalities involved, how is the STX business model, plan and content sourcing approach different from Relativity Media that filed bankruptcy in 2015? Why will the STX financial results be any different? • How does STX ever get to 15 to 20 financially successful film projects per year with its current approach? • What is the corporate ROI strategy and investment end game on a $1 billion per year investment? • Is the STX objective to invest huge amounts of capital in making movies or to maximize risk adjusted returns on investment for their investors?

163 STX Summary

STX is a very useful test case for RSL because STX successfully created a business plan, raised capital, hired executives and established direct relationships with the major theater chains, sales agents and international distributors. STX also demonstrates the folly of doing all of these things successfully and then relying on traditional sources of movie content that lose money over 85% of the time.

STX lacks an effective filmmaking and investment vision and content evaluation metrics and screenwriting methodologies to create their own movies and sustainable film franchises that will consistently resonate with large international audiences. Their current strategy of relying on others to write and develop their films will never allow them to deliver exceptional risk adjusted ROEs to their investors because they have no sustainable source of premium content and film franchise that will produce consistent profitability to drive a compelling IPO profile. STX investors have invested over $1 billion in a business model and plan that has almost no chance to deliver an a positive risk adjusted ROI because they were impressed that the executive team has produced a lot of movies. The investors clearly did not review the poor financial performance of the movies that the executive team had produced or they would not have invested in STX. RSL is pursuing a similar plan to create a new movie studio but RSL has developed an effective business model, content evaluation metrics and screenwriting methodologies that have been employed to produce an inventory of 14 screenplays that will launch up to 10 sustainable film franchises with high certainty of strong resonance with very large global audiences. The RSL film project inventory is far superior to the STX slate in every measurable way. RSL is also laser focused on creating a compelling IPO profile by year 5 that will deliver a $5 to $15 billion earnings windfall to RSL shareholders. STX has no chance to achieve that goal with their current strategy no matter how many movies its executive team has produced in the past. In summary, STX demonstrates that the intrinsic, business, financial and market merit of the business model/ plan and content origination methodologies are far more important to creating a financially successful studio that the number of movies that the executive team has produced in the past. RSL owns far superior content and the methodologies to sustain it and the primary capital will allow RSL to assemble a much more earnings effective executive team than STX. The RSL team will also deliver 5 year Alphas in the 10,000 to 20,000 range and STX has no chance to achieve that goal. I truth, STX is on the same path as Relativity Media toward insolvency because they failed to disconnect from the deeply flawed culture and content development practices of the movie industry status quo.

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