INVESTMENT PACKAGEFor the Motion Picture Production & Film Fund Management CompanyPLEASE NOTE. THE FOLLOWING BUSINESS PLAN IS A SUMMARY OF TERMS, WHICH IS INTENDED SOLELY TO SERVE AS A BASIS FOR FURTHER DISCUSSION AND DOES NOT CONSTITUTE OFFICIAL TERMS OF ANY INVESTMENT, CREDIT, OR LOAN IN THE CORPORATION.
Above Water Productions, INC.This packet contains the following: ABOVE WATER PRODUCTIONS, Inc.I.COMPANYOVERVIEW (3-4)II. 1612 Ponce De Leon Ave.,RISK FACTORS (5-6) 1st Floor San Juan, PR 00909III.PUERTO RICO AS A Jeanette Perez, CEOPRODUCTION BASE Managing Member(7) 787-560-5984IV. email@example.comPRODUCTION &DISTRIBUTION Jay Webb, COOSTRATEGY (8-9) Producer 732-610-8420V. firstname.lastname@example.orgA DIVERSIFIEDSLATE OF FILMS(11-12)VI.MOTION PICTUREINDUSTRYOVERVIEW (13-14)VII.PROPOSEDINVESTMENTTERMS SUMMARY(15)VIII.MARKETS OFREVENUE (16)IX.FINANCIALS (17-22)X.MANAGEMENT(23)XII.REGULATION(24)XIII.ADDITIONALINFORMATION (25) A B O V E WAT E R P R O D U C T I O N S 1
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM ABOVE WATER remaining units thereafter by op- PRODUCTIONS, INC. eration of law and the Company’s charter. Number of Units Offered Hereby: 20 The Units are being offered by the Price per Unit $100,000 Company on a `best efforts’ basis. Minimum Aggregate Subscription All subscription payments will be $100,000 deposited into a capital account Maximum Aggregate Subscription established by the CEO of the Cor- $2,000,000 poration. All checks shall be made payable to: Above Water Produc- Above Water Productions, Inc. (the tions, Inc. Capital Account. “Company”), is a Puerto Rico Cor- poration created for the purpose After at least One (1) Unit (the of development, production, and “Minimum Subscription”) are sub- financing of commercial motion scribed for, a closing may be held pictures. as soon as practicable thereafter and the funds held in the Capital The Company is offering (“Offer- Account will be released to the ing”) for sale to individuals and Company. Subsequent closings entities (the “Investors”) a maxi- may be held after additional mum of Twenty (20) shares (here- subscriptions are received, up to inafter referred to as the “Units’’). the Maximum Subscription and at See “Description of Units and the same unit price as the first unit Terms of Offering.” Each Unit will sold. be offered at a price of One Hun- dred Thousand ($100,000) Dollars. THIS OFFERING INVOLVES A This offering is subject to negotia- SUBSTANTIAL DEGREE OF RISK. tions dependent upon the timing THE DATE OF THIS CONFIDEN- and circumstances of the specific TIAL PRIVATE PLACEMENT investment situation. However, the MEMORANDUM IS March 28th, first unit issued at one particular 2011 price shall remain the price of the A B O V E WAT E R P R O D U C T I O N S 2
COMPANY MISSION STATEMENT For all films on the slate, the Company will seek to reduce risk by maximizing film tax credits andOur mission is to develop and produce a subsidies, foreign pre-sales, product placement,diversified slate of commercially viable, and taking in financial partners when appropri-high quality film & entertainment products ate.with low production costs that will provideshort-term return on capital and long term THE CORPORATIONresidual income to our investors. Above Water Productions, INC., (the “Com-EXECUTIVE SUMMARY pany”) is a Corporation that has been created for the purpose of producingAbove Water Productions, Inc. is engaged in and distributing a diverse slate of motionthe financing, development and production pictures (“The Films”). Each Motion Pictureof a slate of motion picture films intended will have a separate LLC set up under Abovefor domestic and foreign theatrical release, Water Productions, as to keep accurate booksas well as other non-theatrical venues. and accounting for potentially distinct investors. The Company’s busi-Theater chains, television outlets, online ness affairs and financial operations will bevideo distributors, and Video on Demand managed by Jeanette Perez; The Company’srequire a pipeline of products available to productions operations will be managed Jaysupply their customers (the viewers). As Webb; and, the company’s creative manage-such, they need to continuously acquire new ment will be handled by Vince Campanellaproduct to keep that pipeline filled, or go out and Jay Webb. In addition to the company’sof business. In today’s world, with the tradi- production office and equipment, the majortional theaters vying with television, online assets of the Company will be the Compa-channels, cable services, satellite, and ny’s ownership of the Films. The CompanyBluRay/DVD rental & sales, there is a very willstrong market for such independent films, as engage in the ownership, production, andours. exploitation of the Films, and will have a one hundred (100%) Percent ownership interestThe Company will use the relationships of in each of the films.its principals to maintain a steady flowof material to consider. The Company con- FEASIBILITYstantly receives material and reserves theright to change its slate based on the The major asset of the Company will be incommerciality of these submissions. its ownership of the films produced and the licensing rights thereof. The Company andThe Company will be seeking the sum of up its Producers have created (and will create)to $40 million in debt financing to specific business plans and conduct marketcomplete 8 feature length films and 2 docu- analyses for each feature film productionmentaries. The debt will be collateralized venture. These film specific business planby each of the films produced by the Com- presentations will include script synop-pany. Of the $40 million, if all is raised ses, production and marketing strategies,simultaneously, $10 million will be set aside cast and crew attachments and proposals,as part of a revolving P&A fund (prints and comparable film performances, and distribu-ads) that will help guarantee that each of the tion projections. The first two film businessCompany’s films will be theatrically plan presentations have been completed anddistributed. If only a portion of the funds are approved by the Officers of the Company.raised, between $8 million and $15 million, The Company will utilize the expertise ofthe company will produce the first 2 films on its members, and hired production staff, tothe slate. In addition to setting aside funds maximize the potential profit of each filmfor P&A, the Company will also rollover project. The Company will also strategicallyrevenue streams into its future film produc- purchase assets that can be used repeatedlytions. This is significant as theatrical dis- on its film productions to keep budgets low,tribution drives all other ancillary revenue and to add to the company’s overall equity.streams, including home video, pay/cabletelevision, free television, soundtrack albumsand merchandising.
RISK FACTORSTHE PURCHASE OF THE UNITS INVOLVES A HIGH DE- knowledge of the Company, or the persons associated withGREE OF RISK AND, THEREFORE, SHOULD NOT BE PUR- the production of the Films, (such as delays caused by laborCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS disputes, illness, accidents, strikes, faulty equipment, deathOF HIS OR HER INVESTMENT. PROSPECTIVE INVESTORS or disability of key personnel, or bad weather). However, theSHOULD CAREFULLY REVIEW AND CONSIDER THE FOL- Company will obtain customary production insurance for theLOWING RISKS AS WELL AS THE OTHER Films and Completion Bonds which will protect the CompanyINFORMATION SET FORTH HEREIN: against some of these risks.Recently Organized Corporation Risks of Film DistributionThe Company will be a newly formed Corporation, and there- The success of any distribution activities will depend on afore has no history. The Company has minimal operating rev- number of factors over which the Company will have little orenues and requires the net proceeds of this Offering to meet its no control. Even if all territories, both domestic and foreign, arecommitment to fund a portion of the Film. The likelihood of the sold, there can still be no assurance that the Films will succeedsuccess of the Company must be considered in light of the on an economic level. If the total production costs exceed theproblems, delays, risks, expenses and difficulties frequently total worldwide minimum guarantees or minimum advances,encountered in connection with the establishment of a new there may not be sufficient funds to repay to the Investors theenterprise, many of which may be beyond the Company’s con- amount of their investment in the Company. In addition, theretrol. The Company is subject to all of the risks inherent in the may be problems which could adversely affect the Company’screation of a new enterprise and the competitive environment ultimate profitability, including: public taste, which is unpre-in which it will operate. While the Producers have substantial dictable and susceptible to change; competition for theaters;experience in the motion picture industry, the Producers’ past competition with other films and other leisure activities; ad-success is no indication of future success or the possible success vertising costs; uncertainty with respect to release dates; andof this project. Furthermore, the Company has not yet conclud- the failure of other parties to fulfill their contractual obligationsed the agreements for the employment of any of the persons to and other contingencies. Distribution agreements generallybe associated with the Film, including the distribution of the give a distributor significant flexibility in determining how aFilm. film will be exhibited. There can be no assurance that a distrib- utor will not limit the Film’s run, limit the territories in whichAbsence of Immediate Revenues the Film is exhibited, or otherwise fail to actively promote theAs revenues from the Films, if any, will not flow into the Com- Film. Any such action by the distributor could have a materialpany immediately, the Company will most likely incur signifi- adverse effect on the economic success of the Film andcant operating losses in the first year of operations. Further- revenues received by the Company. In the event that the Filmmore, no assurance can be made that an Investor will realize a is distributed in foreign countries, some or all of the revenuessubstantial return on his or her investment, due to the risk fac- derived from such distribution may be subject to currency con-tors below. trols and other restrictions, which would restrict the available funds.Risks of Film ProductionThe production of any motion picture involves a substantial Exposure to Worldwide Economic Conditionsdegree of risk. The costs of producing a film may be increased It is intended that the Films will be sold to foreign and domes-by reasons or factors beyond the control or present tic distributors for exhibition in their respective territories. Con- A B O V E WAT E R P R O D U C T I O N S 5
sequently, the value of the Film’s rights as determined by such or otherwise dispose of the Units will be significantly limiteddistributors would be dependent upon many factors including by the Act, the Company Bi-Laws, as well as state securitiesthe economic conditions in such distributor’s territory. Eco- laws and the regulations promulgated thereunder. Consequent-nomic downturns, changes in the currency exchange rates and ly, if as a result of some change in circumstances arising fromchanges in economic forecasts of any or all of the individual an event not presently contemplated, an Investor wishes toterritories may cause a material adverse effect to the Company. transfer some or all of his or her Units, such Investor may findEven if distribution agreements are obtained for certain territo- such transfer difficult or impossible to effect. Investors shouldries, economic changes in any territory could affect the ability be able to afford the entire loss of their investment in the Com-to complete any transaction. pany.Competition Offering PriceAll aspects of the motion picture industry are highly competi- The offering price of the Units has been determined by thetive. The Company faces competition from “major” studios and Company, and currently bears no relationship to the Com-other independent motion picture companies and television pany’s assets, book value, potential earnings, net worth or anyproduction companies, not only in attracting creative, business other recognized criteria of value. The offering price does, how-and technical personnel for the production of films, but also in ever, bear a relation to the estimated costs of the Company’sdistributing the Film. The Film will encounter competition from commitment to the production and distribution of the Film.other films and other types of public entertainment. Thecompetition faced by motion picture theaters for the public’s Tax Risksleisure-time activities has increased in recent years because of It is the intent of the Company to file tax returns on behalf ofthe expansion of the number of entertainment outlets Above Water Productions, Inc. as an S-Corporation; however,such as cable and video. no ruling has been applied for from the Internal Revenue Ser- vice that the Company will be treated as an S-Corp for federalDependence on Production Team income tax purposes.The Company’s success will be largely dependent upon thepersonal efforts of Evolving Productions and the other produc- THE FOREGOING ANALYSIS IS NOT INTENDED AS A SUB-ers and professionals hired for the Film. The loss of the services STITUTE FOR CAREFUL TAX PLANNING. THE TAX MAT-of any of these professionals will have a material adverse effect TERS RELATING TO THE COMPANY AND THE TRANS-on the Company. If any one of these other individuals should ACTIONS DESCRIBED HEREIN ARE COMPLEX AND AREbecome incapacitated or otherwise unavailable, a qualified suc- SUBJECT TO VARYING INTERPRETATIONS. MOREOVER,cessor would have to be engaged. There can be no assurance THE EFFECT OF EXISTING INCOME TAX LAWS AND POS-that such a qualified successor could be obtained, or if ob- SIBLE CHANGES IN SUCH LAWS WILL VARY WITH THEtained, on the same or similar terms and conditions. PARTICULAR CIRCUMSTANCES OF EACH INVESTOR. EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITHLimited Transferability of Units; Lack of Trading Market AND RELY ON HIS OR HER OWN ADVISORS WITH RE-Investors must be aware of the long-term nature of their invest- SPECT TO THE POSSIBLE TAX CONSEQUENCES, INCLUD-ment and be able to bear the economic risks of their investment ING RISKS AND ADVANTAGES (FEDERAL, STATE ANDfor an indefinite period of time. No trading market exists for LOCAL) OF AN INVESTMENT IN THE COMPANY, AND,the Units and none is expected to develop. None of the Units IN THAT REGARD, EACH SUCH PROSPECTIVE INVESTORhave been registered under the Act, or under the securities laws SHOULD NOT RELY ON ANY TAX INFORMATION HEREINof any state. The right of any purchaser to sell, transfer, pledge CONTAINED. A B O V E WAT E R P R O D U C T I O N S 6
PUERTO RICO AS A PRODUCTION BASEThe Company has developed a slate of films that can be com- Tax Credit Program:pletely accommodatedby shooting in Puerto Rico. Along with - Producers of each film will be required contractually to spendthe attraction of its fiscal autonomy, our research has shown over the neededthat the locations available there are ideally suited for our 50% of the production budget in Puerto Rico for each of theproduction demands. The country has a beautiful year-round films.climate; Beaches, waterfalls, parks,jungles, caves, picturesque cities, and other natural land- - The Production will maximize their qualifying expenditures,scapes offer various backdrops fulfilling many of our location hiring local crew, talent, and renting equipment from localrequirements. The Puerto Rican government is indeed very companies whenever possible.film-friendly, and even offers certain locations free of charge topromote the industry’s growth. Puerto Rico also offers experi- - This 40% tax credit (35% net after credit buyers discount) willenced film crews and equipment significantly effect the payback schedule, & creates an evenavailability, as many independent and studio films have mi- more secure investment.grated to Puerto Rico to take - Producers will also take advantage of the government taxadvantage of their tax incentives. waiver on hotel accommodations for crew and talent.TAX INCENTIVES - Local Unit Production Manager will be hired to assist in the creation of a Puerto Rico Budget, as well as ensure a successful tax credit application.The Company plans to take full advantage of Puerto Rico’s 40% A B O V E WAT E R P R O D U C T I O N S 7
PRODUCTION STRATEGYThe Company will produce its Motion Pictures at a cost far Tom Berenger and Busta Rhymes and boasts a modest finallower than if the films were being produced by studios. The budget of approximately $2.7companies and producers that are associated with Above Water million. The film has the production value and big budget feelProductions all have a significant track record of completing of a movie with at least four times the budget.films on time and under budget. Keeping budgets low andproduction value high is the key to lowering On top of the “more bang for the buck” production strategythe risk of an independent film investment. Above Water Pro- and the advantages discussed by shooting in Puerto Rico, theductions will achieve this by minimizing talent, locations, and Company will also be increasing potential IRR and decreasingcrew expenses, while taking full advantage of tax risk by diversifying the company’s invesment into many films.incentives and production discounts offered through producer Diversifying a slate of films manages the risk portfolio of theconnections. company, but more importantly increases the chance of a “Hit” Independent Film (i.e. SlumDog Millionaire,Big name talent will typically work at discounted rates for Crash, Juno, Sideways, etc.). The profits of a box office hit canindependent film companies, especially if the subject matter be astronomical, and this is the main reason that many inves-resonates with them. For example, the film “Chumley” and its tors find independent film investment an intriguingportrayal of Autism will be of personal interest to many popu- proposition. By selecting intriguing screenplays, and keepinglar actors for many humanitarian and philanthropic reasons. production costs low, the principals can effectively increase theThe last film created by producers and principals in the Com- overall profitability of the Company.pany, “Breaking Point” (released by LionsGate in 2010) stars A B O V E WAT E R P R O D U C T I O N S 8
DISTRIBUTION STRATEGYDomestic Distribution Foreign DistributionThe Company’s principals and associated producers, as well Above Water Principals also have strong partnerships withas the currently attached co-production company, Evolving many foreign sales agencies, and some of the attached pro-Productions, have strong existing relationships with studios, ducers have personal experience in foreign sales.distribution companies, and foreign sales agents. The Foreign Sales Agencies are focusing their film sales effortsCompany will use these connections to negotiate the most lu- more and more on one specific genre, so the Company willcrative deal with the best fitting distribution partner for each look to specific sales agents depending on the genrefilm. The Company will also allot P&A (Prints & Ads) bud- type of the film:gets for each film, resulting in a guarantee that the film willbe released theatrically. P&A funds held by the company also Elephant Eye Films: Specializes in Art house, and grittyassist in the negotiation process, as percentage deals with stu- independent films. Elephant Eye Films, and president Davedios and distribution companies rise significantly when the Robinson, have been greatly successful in the foreign salesdistribution company is not fronting the entire P&A budget. market. Most notably, Elephant Eye secured the foreign sales rights to the Oscar Nominated Independent Hit Film, “Pre-- LionsGate Films released Evolving Production’s last film, cious”.“Breaking Point”, domestically on DVD. Principals, produc-ers, and the director attached to the first film on the Slate, ContentFilm: This Foreign Sales Agency is one of the larger“Chumley”, successfully collaborated on “Breaking Point”. established companies. While its slate does reach across mul-Crew familiarity will surely save time and money. From this tiple genres, Content has had great success in the family filmcollaboration, the Company now has direct contact to this genre. Above Water Productions associated producers havepowerhouse distribution company for the prospective release utilized ContentFilm successfully for past film sales. Otherof all Above Water films. foreign sales agencies that 8 producers have built relation- ships with include: Galloping Films, Fabrication Films, and-Peace Arch Entertainment, another tight connection to the Voltage Pictures.company, owns one of the largest libraries of top qualityindependent feature films in the world, featuring more than Many times the foreign revenue for an independent film will500 classic and contemporary titles. Principals and Producers exceed the income generated from the domestic release. Eachalso have relationships with executives at Warner Bros., Mil- individual foreign market is changing rapidly, so having thelennium Pictures, CBS Films, Fox, Overture Films, and many right foreign sales team is very important to the financial suc-others. cess of an independent film A B O V E WAT E R P R O D U C T I O N S 9
ABOVE WATER SLATE OF FILMS (1ST 6 FILMS)The Slate is diversified throughout 3 genre types multiple films across these genre types will di-that allow for reasonable budgets and potentially versify the production company, and will greatlyhigh returns. Family Comedies/Adventure Films, reduce the associated risk of investment. The slateGrit ty Art house Dramas, and Documentaries are is subject to change and will grow, as producersthree genre types that have seen great success on an are currently searching for unique screenplays andindependent level (while maintaining reasonable novels that fit into Above Water’s strict vision andbudgets). These types of films do not require huge guidelines that can also be effectively produced inexpenses for effects, locations, or high priced talent. Puerto Rico.Acquiring unique screenplays and producing 1. Chumley (2011) 2. In a Moment’s Time (2011) 3. Roxy’s Town (2012)BUDGET: $4.42 Million BUDGET: $3.2 Million BUDGET: $5.5 MillionProduction Notes: Chumley will be the Production Notes: A Mix between Crash Production Notes: The screenplay isfirst film to be produced in the Above and American Beauty, this visually based largely in Puerto Rico. RoxyWater Slate of Films. Full Production striking gritty Indie drama is extremely Town a gripping story, and is a Grittywill be shot in Puerto Rico, and will be unique in script and style. Producers an- Independent Crime Drama similar toco-produced by Evolving Productions. ticipate critical acclaim and great festival Breaking Point, producers last feature. success.Brief Synopsis: A nine year old autistic Brief Synopsis: After being an abusedboy named Tristen, and his extraordi- Brief Synopsis: Accentuated by a psychot- child in a crystal meth home, Roxynary relationship with a Sea Lion pup. ic hostage situation and a painfully real Towsend was thankfully taken away byWhen the sea lion, Chumley, is kid- love story between two foreign restau- an opposing gang member to be hiddennapped to be used as a part of diabolical rant workers, In a Moments Time viv- and raised by a special forces militaryscheme, Tristen and his family will idly paints the tales of ordinary people sergeant in Puerto Rico. A trained killingstop at nothing to uncover the kidnap- who experience moments in which time machine by the time she went off topers and bring them to justice. ceases to exist. college, Roxy was well prepared when her family’s past caught up to her.Director: Jeff Celentano / Producers: Director: In Talks with Zak MulliganVince Campanella, Jay Webb, Sylvia (winner of SunDance award for excel- Producers: Vince Campanella, SylviaCaminer lence in cinematography, 2010) Caminer, Jeanette Perez Producers: Jordan Woolley, Jay Webb A B O V E WAT E R P R O D U C T I O N S 1 1
Artwork Coming Soon 4. Operation High Jump 5. Sumeria (2013) 6. Mom in the Hood (2013) Documentary (2012) (Early development phase) (Early development phase)BUDGET: $1.2 Million Production Notes: Production Notes: This epic trilogy is being written by This family adventure/comedy will fitProduction Notes: The Company has renowned MIT scientist, Biju Perekaden. nicely in with the production slate. It’srights and access to reels of unseen Producers and writers are currently marketing campaign will be toward a16mm film that was taken by the U.S. writing the screenplays, and will be more urban demographic, further diver-military of certain expeditions to modifying so the majority sifying the Above Water slate of films.Antarctica. can be shot in Puerto Rico. Brief Synopsis:Brief Synopsis: Admiral Byrd’s expedi- Brief Synopsis: A struggling single white mother stum-tions to Antarctica were meant for What would happen to society and the bles upon a unique job opportunity. Hermilitary testing in extreme weather world if there was a cure for all diseases? life would change when she is randomlyconditions, but after a closer look there Follow the lives of three men’s paths hired by popular rap group’s manager inmay have been more to it than meets the who were integral in the discovery of the order to teach them proper manners andeye. cure, and how it effected their lives, and etiquette before a dinner at the White the world around them. House. Hilarious situational comedyHistorians/Specialists: Bellmore Brown, and the breaking of racial boundariesEddie Perez ensue as the two sides come learn and appreciate each other.Producers: Vince Campanella, Jay Webb A B O V E WAT E R P R O D U C T I O N S 1 2
THE MOTION PICTURE INDUSTRYThe production of a motion picture tradi- Sources of financing include the major DISTRIBUTIONtionally takes place in four stages: film studios, commercial or privatedevelopment and finance, pre-pro- lending institutions, private investors, Foreign and domestic distribution rightsduction, principal photography and publicly or privately raised pools of film for films are sold in organized filmpost-production. The following general investment capital, pre-sales of ancillary markets such as the American Filmdescription is intended to provide a basic rights, as well as guarantees for United Market (AFM), MIFED, Cannes, MIP-overview of the industry to aid a poten- States theatrical distribution rights. COM and MIP 10 Asia. At these markets,tial financer in evaluating the merits and domestic and foreign distributors buyrisks of financing the Company. The mo- Pre-Production. If it is determined that a film rights to exhibit films in the 47 sepa-tion picture industry is a highly complex screenplay has the potential for a rate worldwide territories, including theand competitive business involving both commercial motion picture, the pre-pro- United States and Canada. Thesecreative and commercial considerations. duction phase will commence. Activities distributors typically purchase such filmThe industry consists of two principal during this phase include hiring key rights from sales agents, or in some cases,activities: production, which involves personnel (including the director, prin- from production companies.the development, financing and produc- cipal cast, and production personnel),tion of motion pictures, and distribu- determining production locations and Domestic Theatrical Distribution. Theatri-tion, which involves the promotion and shooting schedules, creating a “story cal distribution and marketing of mo-exploitation of completed motion pic- hoard’” for the screenplay, revising the tion pictures involves licensing the righttures in a variety of media. Each entity screenplay, developing a detailed budget, to exhibit motion pictures on a rentalinvolved in motion picture production and completing the financing. Principal basis to theaters, the creation and dis-and distribution is a separate business Photography. Principal photography semination of advertising and publicity,venture, with its own management and consists of the actual filming of a accounting, billing, credit and collection,personnel, its own budgetary constraints, motion picture. the manufacture, inspection and dis-and its own method of producing or semination of prints used in exhibition,exploiting motion pictures. Post-Production. During the post-produc- and the maintenance, delivery, storage, tion stage, the picture is edited, music inspection and repair of such prints.PRODUCTION and sound effects are synchronized with Generally, distributors and exhibitors the picture, special effects are added, and (theater owners) will enter into agree-Development and Finance. Typically in the the picture is brought to a completed ments whereby the exhibitor retains adevelopment stage, a producer will form known as an “answer print”. portion of the “gross box office receipts,”acquire the motion picture rights, or an which are the admissions paid at the boxoption on such rights, to a literary prop- office. The balance (“gross film rentals”)erty. At this point, the producer must is remitted to the distributor. Frequently,secure financing for the picture. exhibitors and distributors must negoti- A B O V E WAT E R P R O D U C T I O N S 1 3
ate as to the appropriate percentage to include rights granted to cable, direct (III) ANCILLARY RIGHTS. In additionbe remitted to the distributor, which may broadcast satellite, microwave and other to the distribution media and marketsdelay payment of the gross film rental to services paid for by subscribers. The described above, the owner of a film usu-the distributor. right to license a picture to the television ally licenses the right to non-theatrical markets may be granted to domestic or uses to distributors who in turn make theForeign Theatrical Distribution. Foreign foreign theatrical distributors. Television film available to airlines, hotels, schools,theatrical distribution rights may be rights are generally licensed first to pay oil rigs, public libraries, prisons, com-licensed along with domestic theatrical television, such as HBO, Cinemax and munity groups, the armed forces, shipsrights or may be licensed on a territory- Showtime, for an exclusive exhibition at sea and others, as well as the right tobyterritory basis. In the latter case, the period approximatly 12 to 18 months license the performance of musical worksowner of the film usually receives an ad- after their initial theatrical release; there- and sound recordings embodied in avance, or “minimum guarantee,” against after to broadcast network television for motion picture, including public per-a negotiated percentage of gross film a specified number of runs during an formance and sheet music publication.rentals from each territory. The owner exclusive exhibition period, usually 24 Rights may be licensed to merchandisersgenerally does not receive any share of to 36 months after the initial theatrical for the manufacture of products such asthe foreign gross film rental until the for- release of the motion picture; then to pay video games, toys, T-shirts, posters andeign distributor’s fees and expenses are television again; and finally syndicated other merchandise. Rights may also berecovered and the advance recouped. to independent stations (approximately licensed for novelization of the screen- 42 to 84 months after the initial theatrical play and other related book publica-Foreign and Domestic Ancillary Markets. release). The number of television broad- tions. The entertainment business, inDue to the increase in revenues from casters in Europe is currently expanding, general, and the motion picture industry,cable/pay television, home video and purchasing American made movies as in particular, are undergoing significantother ancillary markets, domestic theatri- their first consideration. changes. Alternative forms of filmedcal exhibition has accounted for a declin- entertainment have become available,ing percentage of the income earned by (II) DVD/VOD/HOME VIDEO. A mo- including expanded pay and basic cablethe majority of films tion picture typically becomes available television, pay-per-view programming, on home video for purchase or rental by Internet and home entertainment equip-(I) TELEVISION. In the United States, consumers approximately 3 months ment. Recognizing the most recentbroadcast rights are granted to networks after its initial theatrical release. The technological developments and shift-such as NBC, ABC, CBS, or Fox for markets are currently shifting slightly, ing consumer tastes, it is not possible toexhibition by all the network’s affiliates. but video on demand is becoming very predict what effect these changes willSyndicated rights include rights granted popular and has been filling in for the de- have on the potential overall revenue forto individual local television stations or cline of the DVD rental marketplace. feature-length motion pictures.groups of stations. Pay television rights A B O V E WAT E R P R O D U C T I O N S 1 4
PROPOSED INVESTMENT For the investment of Two Million ($2,000,000) Dollars, the Investor(s) will be awarded 20 shares (20% ownership) in the company.TERMS SUMMARY 1 share = One Hundred Thousand ($100,000) US Dollars The Investor(s) will also receive dividend payments based on an internal algorithm that is based on performance, after investment principal and/or bank financing is paid completely. This offering is subject to negotiations depen- dent upon the timing and circumstances of the specific investment situation. However, the first unit issued at one particular price shall remain the price of the remaining units thereafter by operation of law and the Company’s charter.COMPANY STRUCTURE & OPERATIONSAbove Water Productions, INC. (The Control of the production, distribution Officer(s) and Producers in individualCompany) will be the parent Corporation and exploitation of the Films and the capacity have reserved the right tofor all film productions, and will be oper- daily operations of the Company will perform any services which a thirdated by its officers. The Officers of Above remain exclusively with Above Water person might have performed for theWater Productions, Inc. will be Ms. Productions. It is also understood that Company, including without limitation,Jeanette Perez, Chief Executive Officer, the co-production company, Evolving serving as producer, director and salesJay Webb, Chief Operating Officer, and Productions, will play a primary role in agent for the Film. In such event, theMr. Vince Campanella, President. The the day-to-day operations of Pre-produc- Officers and/or Producer(s) may receiveofficers will control all of the Company’s tion, Production, and Postproduction the reasonable compensation for saidoperations, manage its affairs, and make of the films it produces. The Company services that the third person would havethe decisions on its behalf. The Company will rely on the expertise of this entity received for said services.will maintain a principal bank account, until all aspects of production are metand then establish separate capital with the highest of quality and concern. SHAREHOLDERS REVENUESaccounts for the funding and receipt ofrevenues for each film. Sole-purpose The Officers will provide all executive, Each of the shareholders in the companyLLCs will be organized for each film pro- supervisory, and administrative services will be entitled to all revenues due to theduction, thereby keeping the accounting for each subordinate Limited Liability company, secondary to any debt financ-organized and transparent, and keeping Companys’ operations and will enter into ing payments and less accounting andcash flow appropriated correctly. all contracts necessary for the produc- operational expenses. tion and distribution of the Films. The A B O V E WAT E R P R O D U C T I O N S 1 5
MARKETS OF REVENUEAfter a picture is completed, it will be nancially successful. There are numerous Ancillary Markets (foreign & domestic)ready to be licensed for domestic the- legitimate strategies regarding a theatri- Ancillary Markets are changing and ex-atrical exhibition, domestic cable/pay cal release for an independent film. That panding everyday, with the introductiontelevision, network television, syndicated being said, producers plan on at least a of internet television, and internet movietelevision (i.e., local television stations), limited theatrical release for each of the downloading and streaming throughforeign theatrical exhibition, foreign films in the slate. Each past film pro- companies like iTunes and Netflix. Pro-cable/pay, domestic and foreign home duced by the films co-production com- ducers will hold onto all rights to mediavideo markets, and other sources, such as pany has secured a theatrical release. that may become developed in the futuremusic rights, airline and other non-theat- when at all possible. There are timesrical exhibition and various merchandis- Foreign Box Office & Acquisitions – In when deal terms dictate the selling ofing rights (The sale of Merchandising recent years, Foreign Theatrical distribu- certain ancillary rights to differentrights are expected to generate significant tion has been a large source of revenue distributors in certain territories as well.revenues for “Chumley” and other Fam- to United States filmmakers. Foreign Current ancillary markets of revenueily Films within the slate) Advances may account for more than include: 50% of an independent films Revenue.Producers and Sales Agents will combine The recent opening of liberalism abroad, - Cable TV, and Pay TVefforts to fully exploit all rights for each has paved the way for American prod- -Home Video, DVD, & VODform of media in every territory, foreign ucts to reach the overseas market, which -Television Syndication & Internetor domestic: were never available before. The foreign -Soundtrack and Music Rights market is hungry for American products, -Book/ Publishing, and MerchandisingUS Box Office - Domestic Theatrical Sales in particular, any product that deals with Rightsrepresent the largest potential revenue, the American entertainment industry.but are not necessary for a film to be fi- A B O V E WAT E R P R O D U C T I O N S 1 6
CASH FLOW (INDUSTRY OVERVIEW) In making a film, cash outflows lasts about 6 months, with all cash occur well in advance of returns. revenues from this market This is due to the significant costs occurring in that time period. The of producing and distributing a network television market follows film and the fact that such costs the pay television market. Inflows are usually incurred at the initial from network television can last phase of film production. Cash from the 25th month to the 60th revenues are derived separately month. Approximately eighty from each market in which the percent (80%) of the revenues are film has been released. The rev- received between months 25 and enues from release of the film in 48, with the remaining twenty the domestic theatrical market (if percent (20%) being collected over applicable) typically begin when the last year. Traditionally, the final the distribution contract is closed market to be exploited is world- (the advance, if any, is paid at this wide television syndication, which time) and typically continue for commences after the network approximately eighteen months af- television market. This market ter the theatrical release of the film. typically lasts between 61 and 96 Approximately eighty percent months, with most, approximately (80%) of the theatrical revenues are seventy percent (70%), of the rev- received within the first 12 months enues occurring between months of release. For the home video 61 and 84. market, revenues begin about 6 months after the theatrical release The above is a synopsis of rev- of the film and continue for up to enue patterns based on industry 24 months. standards in the various markets in which films are exhibited and The pay television market opens no representation is made that the up approximately 12 months after revenues for the Film will conform domestic theatrical release and to the pattern discussed herein. On the following pages are summarized initial accounting documents: the Opening Balance sheet, as well as projected P&L statement. The Projected Worldwide Advances are included, and the budgets for each of the first two films are attached (In hard copy version please reference the “Film Budgets” section. In digital version each budget will be made as an attachment and will be named accordingly) A B O V E WAT E R P R O D U C T I O N S 1 7
EXPENSE PROJECTIONSBelow are the Company’s projected expenses and expendi- Film 1 (Chumley-Budget attached) 4,423,338ture phases for Year One operations, detailing timeline of Distribution (P&A Allowance) 1,000,000cash needs for the Company. The distribution budgets are Film 2 (In a Moment’s Time-Budget attached) 3,217,619allowances, as these budgets will be created or designed Distribution (P&A Allowance) 300,000dependent on the distribution deal that is struck. The distri- 2 years Working Capital/Co. Payroll/bution budget may fluctuate, as the production has a goal Purchases/Loan Payments 1,900,000to shoot both films under the projected budgets, These P&Abudgets also act as additional insurance and contingency in Total Expenses $10,840,957case of extreme circumstances.PHASE 1 – ADVANCES (5 weeks) Amount: $1.56M Above Water Productions company and the producersStart Date: Immediate Summary: Principal pho- Slate of Films. In a Moment’s of the film will begin nego-Amount: $2.4 Million tography is when the bulk Time is a festival style film, tiations with distributors,($2,400,000) US Dollars of money is spent for crew, and dailies submissions to focusing first on the sale ofSummary: The Company rentals, locations and trans- festival representatives will domestic rights for the filmrequires this initial capital in portation. The volatile, time begin toward the end of “Chumley”.order to secure crew, talent, sensitive nature of this phase principal photography.and additional producers for of production is also whenboth films. Due to the strict built in budget contingencies PHASE 6:timelines, and restricted may be used. POST PRODUCTION -schedules of high end crew In a Moments Timeand talent, these immediate PHASE 4 – TRANSITION - Start Date: October 3rdfunds are critical. Chumley Post Production / Amount: $300,000 US Dollars Moment’s Time Pre Produc- Summary: In a Moment’sPHASE 2 - tion Start Date July 24th Time will have a slightlyPRE PRODUCTION – Amount: $1.18M (830K Mo- larger post-production budget The final fund necessary will beChumley / Asset Acquisition ment’s Prepro / 350K Chum- in proportion to its overall 750k in working capital for theStart Date: May 1st, 2011 ley Post Production ) budget. The film has some Company’s second yearAmount: $1.895M (1.12M – Summary: AWP Officers will specific post-production of operations. These phases willfilm preproduction, 375K - 6 coordinate the transition services necessary due to the be repeated in some fashion themonths working capital, 400k phase, with priority on the films style and the slow mo- following year, for onein equipment and office pur- beginning of pre-production tion effects. or more of the future films on thechases) for the 2nd film on the slate. slate (dependent on revised loanSummary: Preproduction will The post production phase of PHASE 7: DISTRIBUTION payback schedules,begin on May 1st. Full crew any film production is a more PHASE BEGINS and revenue generated and pro-will be hired and begin work controllable environment, and Start Date: November 1st jections that will be recalculatedat varying start dates is allotted 12-16 weeks to be Amount: $1.675M US Dollars on March 1st, 2012)throughout pre production. complete. (1,000,000 Allowance forThe Company will also make Chumley / 300k Allowance forthe bulk of its asset purchases, PHASE 5 – PRINCIPAL PHO- IAMT / 375K for next 6including production office TOGRAPHY - months of working capital)space and production equip- In a Moment’s Time Summary: Once a cut of thement. Start Date: August 28th film is complete, the editor, Amount: $1.18M director, and producers willPHASE 3 – PRINCIPAL Summary: Commencement of decide on a final cut, based onPHOTOGRAPHY - Chumley Principal Photography of the focus group screenings of theStart Date: June 19th, 2011 Second feature film under film. Officers of the A B O V E WAT E R P R O D U C T I O N S 1 8
INITIAL FINANCIAL STATEMENTSDUE TO THE VARIABLE NATURE OF BOX OFFICE REVENUE AND RESULTING RESIDUALS, THISP&L STATEMENT IS BASED SOLELY ON PROJECTED ADVANCES FROM DISTRIBUTORS.Above Water Productions, IncStatement of Operations (Projected)For the period April 1, 2011 through December 31, 2011and the years ended December 31, 2012 & 2013 12/31/11 12/31/12 12/31/13Domestic theatrical sales $2,000,000 $- $-Foreign sales - Advances (Chumley) - 1,522,500 3,045,000Foreign sales – Advances (In a Moments Time) - 637,777 2,232,223Sale of tax credits - 1,750,000 -Merchandising rights - 1,750,000 - Total Revenue 2,000,000 5,660,277 5,277,223Production costs 7,640,957 - -Distribution - 1,300,000 -Administrative expenses 193,500 258,000 64,500Equipment 300,000 - - Total operating expenses 8,134,457 1,558,000 64,500Operating income/(loss) (6,134,457) 4,102,277 5,212,723Interest expense(calculated at 5%) 405,000 540,000 135,000Net income/(loss) $(6,539,457) $3,562,277 $5,077,723*Initial payout schedules (12-18 months) for each film detailing the projected territories’ advances are included within the specific business planfor that film. Further detailed supporting documents are available upon request regarding income projections. A B O V E WAT E R P R O D U C T I O N S 1 9
INITIAL SALES BY REGIONThe chart on the following pages displays projected initial approached by producers. These specific projections have beensales by region, they do not include projected royalties from compiled using an aggregate average of recent sales projectionstheatrical, DVD, merchandising or other media. These expected by associates, combined with data from foreign sales compa-sales are dependent on the cast that is acquired by the pro- nies for films that are similar in cast, budget, and style. Theseducers, and are reflective of the prospective cast that will be are all mid range projections, and are not guarantees. Chumley In a Moments Time Combined AdvancesNorth America 2,000,000.00 1,000,000.00 3,000,000.00AsiaJapan 140,000.00 75,000.00 215,000.00Korea 80,000.00 55,000.00 135,000.00Australia 150,000.00 50,000.00 200,000.00Malaysia 45,000.00 3 5,000.00 80,000.00Thailand 60,000.00 35,000.00 95,000.00The Philippines 70,000.00 40,000.00 110,000.00China 60,000.00 45,000.00 105,000.00Taiwan 120,000.00 60,000.00 180,000.00Singapore 20,000.00 15,000.00 35,000.00Hong Kong 50,000.00 40,000.00 90,000.00Indonesia 40,000.00 30,000.00 70,000.00India 60,000.00 40,000.00 100,000.00Pakistan 0 0 0.00ASIA TOTAL 895,000.00 520,000.00 1,415,000.00EuropeGermany 500,000.00 350,000.00 850,000.00France 360,000.00 250,000.00 610,000.00United Kingdom 400,000.00 200,000.00 600,000.00Spain 275,000.00 165,000.00 440,000.00Italy 450,000.00 300,000.00 750,000.00Greece 85,000.00 55,000.00 140,000.00Portugal 50,000.00 22,500.00 72,500.00Scandinavia 110,000.00 55,000.00 165,000.00Switzerland 90,000.00 65,000.00 155,000.00Benelux 150,000.00 125,000.00 275,000.00Turkey 70,000.00 45,000.00 115,000.00Russia 175,000.00 125,000.00 300,000.00EUROPE TOTAL 2,715,000.00 1,757,500.00 4,472,500.00 A B O V E WAT E R P R O D U C T I O N S 2 0
The following is a projection of Returns for specific theatrical performances of the first two films on the Above Water Productions slate of films.These projected performances are highly dependent on specific deal terms and a Distributor’s P&A contribution. Distribution Agreements are very complex,and all terms are negotiated. The producers have used industry standards on revenue sharing structures and recent market data in order to illustrate this example.Upon completion of the films, Producers may also encoutner multiple scenarios whereas different distribution approaches will be the most lucrative.AWP - PROJECTED DOMESTIC RETURNS BASED ON THEATRICAL PERFORMANCE Chumley In a Moments TimeExpected Domestic Advance 2,000,000 1,000,000P&A Monies expended by Distributors 10,000,000 5,000,000Total Advances and P&A to be recovered by Distributor 12,000,000 6,000,000DOMESTIC REVENUESTheatrical ReturnsDomestic Box Office Returns 50,000,000 20,000,000Cinema Share of Box Office 65% 32,500,000 13,000,000Net Box Office (to Distributor) 35% 17,500,000 7,000,000Distribution Fee (Distributor Fee) 25% 4,375,000 1,750,000Net Theatrical Revenues 13,125,000 5,250,000Advance/P&A revovery by Distributor 12,000,000 5,250,000Remaining Advance/P&A to be recovered by Distributor 0 750,000Net Theatrical Profits 1,125,000 0Distributor Theatrical Profit Share (40%) 450,000 0Producer/Picture (AWP) Theatrical Profit Share (60%) 675,000 0DVD ReturnsRetail DVD/VOD Revenues (Direct Sales and Rentals) ** 45% 22,500,000 9,000,000Wholesale DVD Revenues (to Distributor) 50% 11,250,000 4,500,000Distribution Fees (Video Distributor Fees) 25% 2,812,500 1,125,000Net DVD Revenues 8,437,500 3,375,000Advance and P&A by Distributor 0 750,000Remaining Advances and P&A to be recovered by Distributor 0 0Net DVD Profits 8,437,500 2,625,000Distributor DVD Profit Share 25% 2,109,375 918,750Producer/Picture (AWP) Profit Share 75% 6,328,125 1,706,250TV ReturnsGross TV Revenues (sales to Pay, Basic Cable, and Free TV) 10% 5,000,000 2,000,000Distribtion Fee (Distributor Fee) 25% 1,250,000 500,000Advance and P&A recovery by Distributor 0 0Remaining Advances and P&A recovery by Distributor 0 0Net TV Profits 3,750,000 1,500,000Distributor TV Profit Share 30% 1,125,000 450,000Producer/Picture (AWP) TV Profit Share 70% 2,625,000 1,050,000Ancillary RevenuesGross Ancillary Revenues (sales to airlines and other anc. outlets) 5% 2,500,000 1,000,000Distribution Fee (Distributor Fee) 25% 625000 250000Advance and P&A recovery by Distributor 0 0Net Ancillary Profits 1,875,000 750,000Distributor Ancillary Profit Share 25% 468,750 187,500Producer/Picture (AWP) Anicllary Profit Share 75% 1,406,250 562,500Domestic Picture RevenuesGross Domestic Advances (from Distributor prior to release) 2,000,000 1,000,000Theatrical Profits 675,000 0DVD Profits 6,328,125 1,706,250TV Profits 2,625,000 1,050,000Ancillary Profits 1,406,250 562,500Total Net Domestic Pricture Revenues $13,034,375 $4,318,750Projected Advances for International Territories $4,567,500 $2,870,000 Total RevenueTotal Projected Picture Revenues under scenario $17,601,875 $7,188,750 $24,790,625Assumptions1. ** 45% was the approx. average percentage of DVD revenues in correlation to a films US box office revenue in the year 2010.2. This scenario assumes one distributor for all domestic rights.3. - The following projection does not account for P&A monies that AWP will have available to contribute to the films distribution.Producers contribution greatly effects the profit sharing in favor of the producer. The P&A capital on hand will make it a viable optionfor AWP to distribute the film itself if distribution offers are less favorable. This will decrease box office #s, but eliminate distribution fees.
INITIAL SALES BY REGION CONTINUED Chumley In a Moments Time Combined AdvancesEastern EuropePoland 47,500.00 37,500.00 85,000.00Czech Republic 50,000.00 35,000.00 85,000.00Hungary 35,000.00 20,000.00 55,000.00Romania 45,000.00 30,000.00 75,000.00Bulgaria 17,500.00 10,000.00 27,500.00Ex-Yugoslavia 20,000.00 10,000.00 30,000.00Eastern Europe Total215,000.00 142,500.00357,500.00Latin AmericaMexico 150,000.00 90,000.00 240,000.00Argentina 60,000.00 40,000.00 100,000.00Brazil 80,000.00 55,000.00 135,000.00Central America 20,000.00 15,000.00 35,000.00Columbia 30,000.00 15,000.00 45,000.00Venezuela 20,000.00 15,000.00 35,000.00Peru 7,500.00 5,000.00 12,500.00Ecuador 7,500.00 5,000.00 12,500.00Bolivia 7,500.00 5,000.00 12,500.00Latin America Pay TV 160,000.00 100,000.00 260,000.00LATIN AMERICA TOTAL 542,500.00 345,000.00 887,500.00OtherIsrael 65,000.00 40,000.00 105,000.00Middle East 85,000.00 35,000.00 120,000.00South Africa 50,000.00 30,000.00 80,000.00Other Total 200,000.00 105,000.00 305,000.00Foreign Total $4,567,500.00 $2,870,000.00 $7,437,500.00WORLD-TOTAL(advances/guarantees) $6,567,500.00 $3,870,000.00 $10,437,500.00 A B O V E WAT E R P R O D U C T I O N S 2 1
MANAGEMENTCHIEF EXECUTIVE OFFICER, - Jay joins the company as the industry influential, role in the post productionJEANETTE PEREZ production specialist. Along with his role of this comedy featuring Danny Aiello as VP, Above Water has attached him and caused the company to concentrate- Over twenty years of experience in busi- his company to co produce “Chumley”, solely on the independent film industry,ness development, negotiations, and the first film on the slate. leaving its commercial production asinternational media, working with many a secondary income. From this movie,high profile companies and individuals. - Knowledge and experience in the Evolving Productions also created a production and distribution of motion strong relationship with the film’s princi-- Her connections in all facets of Puerto pictures is an invaluable resource to the pal production company; BAXTER films.Rico and her key business relationships company. Evolving Productions paired up withare a key to Above Water’s success. BAXTER films for its second feature film, - A young and passionate film maker, titled Waltzing Anna. Evolving Produc-- Led negotiations for JP International Jay has already personally been a top tions was accountable for all of post pro-Enterprises, increasing company revenue producer on three independent feature duction on the film, and its post produc-up to 300% . films, and senior editor on one; has a tion facilities grew enormously within strong creative backbone to accompany this project. Completely digital and HD- Most recently worked with Mark Lip- his producing savvy. ready, the company has made a point tosky at Who’s On First Productions as a monitor and adapt to the fast paced tech-Senior Vice President. - Business degree/background and vast nological world of post production. technical skills are invaluable to his pro-- Was instrumental in the creation of ductions (skill set includes: Non linear Just recently, in 2009, Evolving Produc-marketing and fund raising tools to raise editing, crew management, budgeting, tions enjoyed its first sole feature filmnon-profit funds for Puerto Rican chap- scheduling, web design, graphic design, production, where it handled all phasesters of Make-A-Wish and The Cancer marketing, financier relations, etc.) of the film, from fundraising throughSociety distribution. The film was an Urban CO PRODUCTION COMPANY – thriller entitled “Breaking Point”, andPRESIDENT/PRODUCER, EVOLVING PRODUCTIONS starred highly respected film actors TomVINCE CAMPANELLA Berenger and Armand Assante with sup- porting performances by hip hop stars- Earned his J.D. from Suffolk University Busta Rhymes and Kirk “Sticky Fingaz”School of Law in Boston - After fifteen Jones. The film enjoyed a limitedyears in the field of law as a trial attor- theatrical release and the DVD wasney, in 2005 Vince left his profession to distributed by the prestigious LionsGatebecome a feature film screenwriter and Evolving Productions LLC is a feature Films. The connections established byproducer. film production company & post Evolving Productions during “Breaking production facility based in both the Point” within every aspect (vendors, tal-- He reached his goal with the successful New York/New Jersey area and Los ent, crew, sales agents, and distributiondevelopment, production, and distribu- Angeles, California. Started in 1999, it companies) have taken the knowledgetion of his first script, “Order of Redemp- was created as a commercial production base and professional network of thetion” (released under the title “Breaking house, handling all aspects of produc- company to amazing heights. In just 10Point” with LionsGate Films) tion, post production and distribution. years of existence, this young, competi- The company boasted numerous tele- tive studio has positioned itself to be-- Vince is a professional businessman, as vision spots, music videos, marketing come one of the independent film indus-well as a passionate, self made writer/ DVDs, and electronic press kits tries most trusted production facilities.producer. through it first few years. Bands like Fall- en from Grace, companies like Creativity LEGAL MATTERS- He also has philanthropic intentions in Practice, and schools like Rutgers Uni-for his films and some of his own profits. versity were all clients of the company Legal Counsel for the Company will(For Chumley, he will donate to organi- in its first 4 years of commercial produc- be provided by Ivan Diaz Lopez, withzations concentrated on Autism) tion. It was not until 2003 when Evolving offices located at Anchor Funding Plaza, Productions LLC found its niche in 1612 Ponce De Leon Ave., San JuanVICE PRESIDENT OF OPERATIONS/ independent feature film post produc- Puerto Rico 00909-1833.PRODUCER, JAY WEBB tion. At this time, the company had the opportunity to collaborate with a Office 787-721-4929- President and Founder of Evolving few other production companies in the Fax 787-723-1343Productions production of the feature film Mail Order Email email@example.com Bride. Evolving Productions limited, but A B O V E WAT E R P R O D U C T I O N S 2 3
REGULATIONDistribution rights to motion pictures are granted legal protec-tion under the copyright laws of the United States and mostforeign countries, which provide substantial civil andcriminal sanctions for unauthorized duplication and exhibitionof motion pictures. The Company plans to take all appropri-ate and reasonable measures to secure, protect and maintainor obtain agreements from licensees to secure, protect andmaintain copyright protection for the Film under the laws of allapplicable jurisdictions. The Code and Ratings Administrationof the Motion Picture Association of America, an industry tradeassociation, assigns ratings for age-group suitability for view-ing of motion pictures.It is anticipated that the Film will be submitted for such rating.In addition, United States television networks as well as foreigngovernments impose restrictions on the content of motionpictures, which may restrict in whole or in part exhibition ontelevision or in a particular territory. A B O V E WAT E R P R O D U C T I O N S 2 4
ADDITIONAL INFORMATIONAll original documentation referred to herein or copies thereof offices of the Company at 1612 Ponce DeLeon Ave., 1 St.Floorand information with respect to this Investment Package and - San Juan, PR 00909 upon request. Prospective investorsOffering of the Units is retained in the offices of Above Water may be required to execute non-disclosure agreements as aProductions. The foregoing summaries do not purport to be prerequisite to reviewing documents determined by the Com-comprehensive or definitive. As with any summary, some pany to contain proprietary, confidential or otherwise sensitivedetails and exception have been omitted. All references herein information. Prospective investors or their respective represen-to documents are qualified in their entirety by reference to tatives may, at any time (during normal business hours) prioreach such document. If any of the statements in this PPM are in to the sale of the Units ask questions of the Company or its em-conflict with any of the terms of any such documents or agree- ployees with respect to the terms and conditions of this Offer-ments the terms of such documents or agreements will govern. ing of the Units and request additional information necessary to verify any information contained in this PPM. The CompanyReference is made to the actual documents and agreements for will provide answers to such questions and provide sucha complete understanding of what they contain. Each prospec- information to the extent such answers and information aretive investor is urged to review all such documents and agree- possessed by the Company or its officers or can be obtained byments. Copies of all documents in connection with the transac- them without unreasonable effort or expense.tions described in this PPM are available for inspection at the A B O V E WAT E R P R O D U C T I O N S 2 5
INVESTMENT PACKAGEFor the Motion Picture Production & Film Fund Management CompanyPLEASE NOTE. THE FOLLOWING BUSINESS PLAN IS A SUMMARY OF TERMS, WHICH IS INTENDED SOLELY TO SERVE AS A BASIS FOR FURTHER DISCUSSION AND DOES NOT CONSTITUTE OFFICIAL TERMS OF ANY INVESTMENT, CREDIT, OR LOAN IN THE CORPORATION.