2. FINANCIAL PLAN

3. Startup Costs In the film industry, revenue doesn’t start coming in for months or sometimes even years.

4. Until the film is released and the revenue starts coming in, the company must have a lot of working capital available on top of regular startup expenses.

5. Because of the long period of time without any revenue coming in, Iconoclast Studios has done an 18 month profit and loss projection.

6. Iconoclast’s cash flow projection shows $117,083 paid out, but keep in mind this includes paying back the loans and $10 million to buy back shares; which is earlier than required.

7. PROJECTED BALANCE SHEET Iconoclast Studios Historical Projected ($ shown in thousands) as of 06/01/2008 as of 12/31/2009 ASSETS Current Assets Cash in bank $ 9,815 $ 19,308 Accounts receivable - 23,700 Inventory 1,000 400 Prepaid expenses 20,785 800 Other current assets - - Total Current Assets $ 31,600 $ 44,208 Fixed Assets Machinery and equipment $ 1,400 Furniture and fixtures $ 1,000 1,000 Leasehold improvements $ 2,000 2,000 Land and buildings $ - - Other fixed assets $ - - (LESS accumulated depreciation on all fixed assets) $ - (1,340) Total Fixed Assets (net of depreciation) $ 4,400 $ 3,060 Other Assets Intangibles $ - Deposits 10,000 505 Goodwill - - Other - - Total Other Assets $ 10,000 $ 505 TOTAL Assets $ 46,000 $ 47,773 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ - Interest payable - - Taxes payable - Notes, short-term (due within 12 months) - - Current part, long-term debt - Other current liabilities - - Total Current Liabilities $ - Long-Term Debt Bank loans payable $ - Notes payable to stockholders 10,000 LESS: Short-term portion - - Other long-term debt 6,000 30,000 Total Long-Term Debt $ 6,000 $ 40,000 Total Liabilities $ 6,000 $ 40,000 Owners' Equity Invested capital $ 40,000 $ 30,000 Retained earnings - beginning - Retained earnings - current - (22,227) Total Owners' Equity $ 40,000 $ 7,773 Total Liabilities and Equity $ 46,000 $ 47,773 The balance sheet shows what assets, liabilities, and owner’s equity is in the business; both when the film shooting begins and year end 2009. It is mandatory in accounting for the assets to equal the liabilities and owner’s equity.

8. The breakeven analysis shows the amount of revenue it would take to “breakeven”. $177,238,000 would pay for everything the company bought, payback all loans, and all investors would walk away with exactly the money they invested. Breakeven Analysis Iconoclast Studios Cost DescriptionFixed Costs ($)Variable Costs (%) Variable Costs Cost of Goods Sold $ 56,310,0000.0% Inventory $ 3,733,0000.0% Raw Materials0.0% Direct Labor (Includes Payroll Taxes)0.0% Fixed Costs Salaries (includes payroll taxes) $ 2,577,000 Supplies $ 58,000 Furniture & Fixtures $ 1,000,000 Advertising $ 3,000,000 Car, delivery and travel $ 295,000 Accounting and legal $ 1,900,000 Rent $ 13,350,000 Telephone $ 200,000 Utilities $ 390,000 Insurance $ 440,000 Taxes (Real estate, etc.) $ - Interest $ 3,500,000 Depreciation $ 1,340,000 Film Festivals $ 50,000 Association fees $ 575,000 Miscellaneous expenses $ 365,000 Principal portion of debt payment $ 18,000,000 Owner's draw $ 40,000,000 Warner Brothers 30,000,000 Total Fixed Costs $ 177,083,000 Total Variable Costs 0.0 Breakeven Sales level = $ 177,083,000

9. The bottom line is that it is nearly impossible to predict viewers’ reactions; but with the experience and creativity of our people, We plan to produce mainstream movies with mass appeal. We will specialize on smaller, more personal, socially-conscious projects, and we'll work with the biggest A-list actors alongside up-and- coming, undiscovered talents and make a profit while doing it.