70.7 Media Abp

70.7 Media Group, LLC Abbreviated Business Plan & Financial Overview (See accompanying document for the complete business plan.)

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Picture L-R Jin Noguchi; Japan Exec. Dir.(Parteneri Holdings) / Ray Sefo (K-1 Heavyweight Champ), / Tomohiro Maki, / Kenneth G. McLendon, II; Chairman/CEO(70.7 Media Group, LLC) , / Jim Ikeda (Parteneri Holdings), / Mike Ikeda; Executive Advisor (Parteneri Holdings), / Wilmer Valderrama; Actor (That 70's Show), / Chris Gantz; CEO (S1 Audio) 2009 CES in Las Vegas, NV 70.7 affiliates

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70.7 Media Group, LLC Executive Summary Cont’d

2007 NARAS Producer of the year Bryan-Michael Cox Multi-Platinum Award winning singer/actress Agnes Monica Groundbreaking Alt. Rock band SWS Songwriter/Producer (Monica, Tyrese, Mario) T. Niblack Grammy Award winning producer Scott “Shavonie” Parker 70.7 Artists, writers, producers

[object Object],70.7 will apply the traditional industry practice of cross-collateralization of deals in which the record company secures a percentage of the profit garnered through various revenue generating agreements secured by the company on behalf of the artist. Each of the albums that 70.7 produces and owns will create valuable short-term streams of revenue, with the possibility of even greater long-term revenue streams based on our cross-marketing practices. Owning and controlling the rights to each of its albums will enable 70.7 to grow its music catalog into a valuable asset, one of several-hundred revenue producing titles COMPANY DESCRIPTION Introduction

[object Object],[object Object],[object Object],As the product develops, and its popularity grows, 70.7 will seek licensing agreements with companies such as Microsoft and Apple. It is our intention that the LCA become the primary source for distributing content for the entertainment industry worldwide. Developing the LCA

[object Object],Among 70.7's primary goals is to design and provide innovative and effective marketing for its artists. As music is being produced in studio, promotion and marketing strategies will be formulated that allow our artists to appeal to diverse audiences thus increasing our revenue possibilities. 70.7 will institute its innovative cross-marketing strategies for all their artists using new technology created by founder, Ken McLendon. It is imperative that the marketing plan for each new release is in motion several weeks before the product is completed in studio. 70.7 will employ multifaceted promotional strategies for its product releases including: hiring regional independent record promoters and creating radio promotions, Internet sites, broadcast videos, dance club promotions, in-store/co-op promotions and promotions to the general public through print, video and television mediums. To support the sales of pre-recorded music, 70.7 will produce and release music videos for each album released by the company. Existing affiliations in the video sector of the industry allow the company to produce top quality video productions while minimizing budgets. At this stage, music videos will be created for 3-4 songs on the album, which will be released as "singles", as a prelude to the full album release. 70.7 will contract with independent record promoters to interface with radio station program directors and music video network directors. Public relations firms will be hired to publicize and promote 70.7 recording artists. Manufacturing & Distribution Marketing & Promotion

[object Object],[object Object],[object Object],As a related means to increase exposure for the company artists, 70.7will plan and promote several live concert shows a month. Shows will be staged at a charity of major concert venues throughout the region. Revenues will be generated from the sale of tickets, concessions and merchandise. Early on, the company will plan and promote two shows per month. This will allow 70.7 the opportunity to attract outside talent to perform in the Los Angeles metropolitan area. It is anticipated that as this division of the company grows, regional promotion contracts will be established allowing for expansion and increased revenues. Merchandising Concert Promotion

The strength of 70.7's management team is derived from the blend of experience, creativity, savvy and energy. The individuals who occupy key positions within 70.7 are dedicated and prepared to ensure 70.7's success and profitability. THE MANAGEMENT TEAM Goals & Objectives

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[object Object],• Achieve overall positive cash flow within the 1st quarter of 2010 • Take advantage of prompt payment discounts offered by vendors • Meet or beat target budgets for project production, promotion and corporate overhead expenses • Decrease the manufacturing cost per unit (CDS) to under $1.02 through volume discounts • Meet conservative projected sales targets • Position the company to allow investment partners, founders and employees the opportunity to financially capitalize on 70.7's profitability. • Maintain balance sheet attractiveness for potential public financiers and investors • Adhere to typical industry financial ratios • Adhere to all required federal and state laws in all aspects of the business • Institute an employee profit sharing plan THE FINANCIAL PLAN

[object Object],Sales Revenue Income Statement 70.7 will generate the majority of its revenue from the sale of pre-recorded music products. This includes compact discs (CDS), LCA's™, downloads, ringtones, and ringbacks. For purposes of revenue forecasts, management has projected varying unit volumes for each of its projects. Sales will occur within a fifteen-month time frame from the release date. Based upon the intensity of 70.7's marketing plan/budget for its projects, the following unit projections will be quickly attained and surpassed. Pop/Rock Act=250,000 units/release Hip Hop/R & B Act= 250,000 units/release CCM Act= 125,000 units/release Gospel Act= 125,000 units/release 70.7 will gross approximately $11.95 for each full-length compact disc sold. Manufacturing of CDS will be subcontracted. Applying discounts available with large quantity purchases, 70.7 will obtain a price of $1.19 per CD. As unit totals increase, manufacturing costs are expected to drop 10-15%. As previously stated it is our intention that the LCA become the primary source for distributing content for the entertainment industry worldwide. Financial Rationale

General & Administrative Expenses ,[object Object],Statement of Cash Flow Accounts Receivable - A/R are conservatively projected with 45% of A/R collections occurring in a 1-29 day period and the remaining 55% in a 90-120 day period. The majority of accounts receivable will be outstanding from the distribution company, which receives payment directly from retailers and will subsequently remunerate 70.7. Because of the extended nature of A/R in the industry (typically 60 days), 70.7 will utilize A/R Financing to assist its cash position in the first twenty-seven months of operations. A 3.5% A/R financing fee is incorporated in the financial model. The size, strength and reliability of 70.7 distribution partners will provide a traditional financial institution or an A/R factor with the proper security to create a working relationship for 70.7's paper. Inventory - Inventory for album releases and upcoming product has been conservatively projected. Despite the fact that lead times for manufactured products are approximately two weeks, 70.7's financial model calculates inventory purchases in the following manner: 30% - 60 days prior to sale and 70% - 30 days prior to sale. The majority of the pre-recorded music product will be stored with the manufacturer and shipped directly to the distributor's fulfillment/distribution centers. A small amount of sample (1,000-2,000 units) and promotional products will be kept on hand at 70.7 corporate offices. Accounts payable - For purposes of this financial model, A/P is separated into two categories: Manufacturing A/P, and Artist Royalty/Mechanical A/P. Adhering to the conservative approach, the model is constructed with Manufacturing A/P being paid in the same month that the expense is incurred. Artist Royalties will be accumulated and paid at close of each quarter.

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Total Use of Funds Executive Staff (8): $90k per x 5 yrs = $3.6 million Artist Advance (3) (recoupable): $60k 1 album $180k Producer Staff (4): $60k per x 5 yrs $1.2 million Admin. Staff (5): $65k per x 5 yrs = $1.625 million Typical Artist Budget 15 mo. Campaign (varies): $650k x 3= $1.95 million Overhead (utilities, mortgages, not including payroll) x 5 yrs = $5.6 million 5 yr Total = $14.155 million

LCA Development (Outsourced to S1 Audio)

Pre-Production Equipment for Pre-Production Studio (2 Rooms) 1 Neumann U87Ai Large Diaphragm Microphone @ $3200 2 Bluebird Condenser Microphone @$300 $600 10 Boom Stands @$50 $500 6 Chairs@ $100 $600 2 Console Units @$1500 $3000 5pc. Lounge Furniture @ $5000 10 Pop Screens @$20 $200 2 Crown Power Amp @$700 $1400 1 Logic Software $500 1 Waves Mercury Bundle (Software) $12900 1 Sound Patch Software $6000 2 Laser Printer @$150 $300 2 Macintosh Computer @$1600 $3200 4 Mac Compatible Displays @$400 $1600 2 Sofa @$2000 $4000 4 Yamaha HS80M Monitors @$350 $1400 2 Yamaha HS80M (Sub) @$500 $1000 4 Event Monitors @$1500 $6000 2 Mackie Big Knob Studio Command Center @$300 $600 2 Mackie HR824 speakers @$600 $1200 40 Misc. Audio Cords @$5 $200 40 Misc. Midi Cords @$5 $200 Total Pre Production Equipments $53,600 Grand Total: $22,075,215

70.7 Media Abp

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