CONFIDENTIAL

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					CONFIDENTIAL




               Draft Business Plan & Prospectus




This report contains information that is confidential and proprietary to Royal Productions, Inc. and is
solely for the use of Royal Productions, Inc. personnel and its agents. No part of it may be used,
circulated, quoted, or reproduced for distribution outside Royal Productions, Inc. If you are not the
intended recipient of this document, you are hereby notified that the use, circulation, quoting, or
reproducing of this document is strictly prohibited and may be unlawful.




Revised April 29, 2011
                                                  Contents

1. EXECUTIVE SUMMARY ................................................................................................ 3
2. THE COMPANY ............................................................................................................ 4
3. THE PRODUCT ............................................................................................................. 5
4. THE MARKET .............................................................................................................. 6
5. REVENUE STREAMS ..................................................................................................... 7
6. MARKETING & PROMOTION ....................................................................................... 8
7. TIMELINE & MILESTONES .......................................................................................... 9
8. FINANCIAL OVERVIEW.............................................................................................. 10
APPENDIX A: MANAGEMENT BIOS (LONG-FORM) ........................................................ 11
APPENDIX B: 12-MONTH FINANCIAL PROJECTIONS ..................................................... 12




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                 1. EXECUTIVE SUMMARY
                      1.1. Overview
                          This document is intended to provide a detailed and objective insight into Royal Productions, Inc., and
                          Company
                      1.2. Product
                          POP! will be marketed as a permanent, headlining performance in a major Las Vegas Hotel/Casino.
                      1.3.     Management Team
                          Please see Appendix A for long-form management bios.
                             Roy Hay, President
                                 Band member, producer, and songwriter, Culture Club
                                 Conceived and formed the “Big Rewind Tour”, featuring his own band along with many
                                  others from the 1980’s.
                                 Member of ASCAP, is signed to EMI Music Publishing, and is represented by Keith Naisbitt
                                  of The Agency Group.
                             Alan Miller, Chief Operating Officer-
                                 16 years of management experience in the music and entertainment industry.
                                 Creation of and overseeing high level global music tours.
                                 Artist management and corporate sponsorship consulting for the Coors Brewing Company,
                                  Heineken, Miller Brewing Company, Universal Music Group and Clear Channel
                                  Entertainment.
                             Scott Beber, CFO
                                 Adjunct Professor of Finance at Cal State University Los Angeles.
                                 16 years of experience in strategic planning, product management, and corporate finance.
                                 Education: B.S. in Business Administration from U.C. Berkeley; MBA and Master of
                                  Engineering Management from the Kellogg School at Northwestern University.
                      1.4. Financial Overview
                             Capitalization: POP! seeks $1 million in seed funding
                             Use of Funds: Salaries, production, and overhead costs. Please see Appendix L: Gross Margin and
                             Operating Expense Forecasts
                             Financial Projections: See Appendix K: Pro Forma Income Statement for complete 12-month
                             financial projections. 1-year totals are as follows:1




1 Based on a conservative scenario
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2. THE COMPANY
  2.1. Overview
     The show entitled POP! will be considered a single venture, to be produced and wholly owned by
     Royal Productions, Inc. (“The Company”). Additional projects or the expansion of existing projects
     may be undertaken by Royal Productions in the future.
     The performance entitled POP! will be considered a single venture, to be produced and wholly owned
     by Royal Productions, Inc. (“The Company”), a Delaware corporation. Additional projects or the
     expansion of existing projects may be undertaken by Royal Productions in the future.




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3. THE PRODUCT
  3.1. Background & Concept
     The formula for POP! Was conceived by Roy Hay in the wake of the immensely successful “THE BIG
     REWIND TOUR”, which played in 1999/2000 to over one million people and grossed over $30
     million. The tour presented highly-respected artists from the 1980’s music scene, including Roy Hay’s
     band, Culture Club.




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4. THE MARKET




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5. REVENUE STREAMS
  POP! will produce an array of revenue streams related to the shows, artists, and performances.




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6. MARKETING & PROMOTION




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7. TIMELINE & MILESTONES
   The following dates are likely to change over time.
   After Funding has been secured, all Milestones from Launch onward will be repeated as the show gains traction, evolves, and grows.



                                  2008                            2009                                            2010
                              S   O   N   D   J   F   M   A   M   J   J   A   S   O   N   D   J   F   M   A   M   J   J   A   S   O   N   D
      Business Plan

      Funding

      Artist Agreements

      Launch

      Venue Selection

      Production Design

      Branding

      Marketing & Promo.

      Performances




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8. FINANCIAL OVERVIEW
  Please see Appendix K for detailed financial projections.
  8.1. Capitalization
                 POP! seeks $1 million in seed funding
  8.2. Use of Funds
                 Salaries, production, and overhead costs.
  8.3. Projections
                 Under three scenarios (Optimistic, Conservative, and Pessimistic), forecasted ticket sales range from
                 $5 million to $8 million in the first month, and grow by 2%, 0%, and -2%, respectively, through month
                 12.


                                                            Revenue from Ticket Sales
                 12,000
                 10,000
                                                                                                                      Opt
   $ thousands




                  8,000
                                                                                                                      Cons
                  6,000
                                                                                                                      Pes
                  4,000
                  2,000
                     0
                              1       2       3       4         5       6       7       8   9   10   11   12
                                                                        Month


                 Gross margin as % of ticket sales reach 46% under the Optimistic scenario by Month 12, and fall to -
                 20% under the Pessimistic scenario. Gross Margin stays flat at approximately 10% throughout the first
                 12 months under the Conservative scenario. Note that Gross Margin is defined as the remainder of
                 ticket sales less artist fees and direct production costs.

                                                          Gross Margin as % of Ticket Sales

       60.0%
       50.0%
       40.0%
       30.0%
       20.0%                                                                                                          Opt
       10.0%                                                                                                          Cons
        0.0%                                                                                                          Pes
      -10.0%              1       2       3       4         5       6       7       8       9   10   11   12
      -20.0%
      -30.0%
      -40.0%
                                                                    Month




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APPENDIX A: MANAGEMENT BIOS (LONG-FORM)
    Roy Hay, President
          Roy Hay was born in 1961 at Southend On Sea, England where, from the age of eight, he attended the
          Trinity College of Music to study piano, theory and composition. At the age of 16, Mr. Hay learned guitar
          and began performing with several local bands. At the age of 18, he moved to London and became
          involved in the London club scene, where he met Boy George.
          In 1981, together with Boy George, Jon Moss and Mikey Craig, Mr. Hay formed the Band “Culture Club”.
          The band was signed to Richard Branson’s Virgin Records label; Mr. Hay spent the next five years writing,
          producing and performing numerous hits and albums for the band, including but not limited to:
              “Karma Chameleon”
              “Time”
              “Do you really want to heart me”
              “I’ll tumble 4 U”
              “It’s a miracle”
              “Church of the poisoned mind”
          Culture Club sold over 40 million records, earned a Grammy in 1984 (among other awards), and became
          one of the most influential, successful and respected musical and culturally significant bands of the 1980’s.
          Through his successes, Mr. Hay earned considerable credibility in the music business.
          After the group disbanded in 1987, Mr. Hay moved to Los Angeles, where he concentrated on writing and
          producing for such artists as “The Beach Boys”, “Keith Washington”,” Denise Williams”, “Brenda K
          Starr”, and many others. He became partners with a very talented writer/performer named Phil Roy and
          was signed to a large production deal with Sony Records.
          During this time, Mr. Hay was approached to work on a Super Bowl commercial for Reebok, which was a
          major success and launched Mr. Hay into the world of audio/visual music composition and production.
          In 1995 he was approached by the Academy Award-winning film composer Hans Zimmer to work at
          Media Ventures, Zimmer’s Santa Monica Composers Collective. At Media Ventures, Mr. Hay worked
          alongside Zimmer on such projects as “The Lion King”, “The Rock”, and numerous other major
          Hollywood movies.
          During his career, Mr. Hay has also individually composed and produced over 50 commercials for many
          high profile companies, including Nike and Marlboro, as well as writing and producing music for the ABC
          network primetime TV shows “Cracker” and “Gun”.
          By 1998, Mr. Hay noticed a huge fascination and resurgence in the popularity of music from the 1980’s,
          and in particular for Culture Club, helped in part by the successes of various Hollywood productions that
          featured their music, including Adam Sandler’s “The Wedding Singer” and “Billy Madison”.




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       APPENDIX B: 12-MONTH FINANCIAL PROJECTIONS

Gross Margin Forecast- Production (Optimistic scenario)


                Assumptions               Performances:
                    Seating               Shows/week           5
       Venue capacity             4,000   Band-shows/week     20
       Avg. % sold                 75%    Prestige grade      B+
       Avg. ticket cost            $135
                                          ($ millions)                                                   Month
            Production Costs ($
                thousands)                                     1       2      3      4      5      6      7       8      9     10     11      12     Total
                                          Financial
       Startup                $5,000      Summary
       Weekly Ongoing          $200       Sales                 8.1    8.3    8.4    8.6    8.8    8.9    9.1     9.3    9.5    9.7    9.9    10.1   108.6
                                          Talent                3.6    3.6    3.6    3.6    3.6    3.6    3.6     3.6    3.6    3.6    3.6     3.6    43.7
        Shows played (by Prestige)        Production Costs      5.8    0.8    0.8    0.8    0.8    0.8    0.8     0.8    0.8    0.8    0.8     0.8    14.6
               A              40%         Gross Margin        (1.3)    3.8    4.0    4.2    4.3    4.5    4.7     4.9    5.1    5.2    5.4     5.6    50.4
               B              30%
               C              30%         Cumulative
                                          Sales                 8.1   16.4   24.8   33.4   42.2   51.1   60.2    69.5   79.0   88.7   98.6   108.6   217.3
              Performances                Talent                3.6    7.3   10.9   14.6   18.2   21.8   25.5    29.1   32.8   36.4   40.0    43.7    87.4
       Shows/day                   1      Production Costs      5.8    6.6    7.4    8.2    9.0    9.8   10.6    11.4   12.2   13.0   13.8    14.6    29.2
       Show days/week              5      Gross Margin        (1.3)    2.5    6.5   10.6   15.0   19.5   24.1    29.0   34.1   39.3   44.7    50.4   100.7
       Avg bands/show              4
                                          % of Sales:
         Cost Growth Rates (M/M)          Talent               0.45   0.44   0.43   0.42   0.42   0.41   0.40    0.39   0.38   0.38   0.37    0.36    0.40
       Average Ticket         2%          Production Costs     0.72   0.10   0.09   0.09   0.09   0.09   0.09    0.09   0.08   0.08   0.08    0.08    0.13
       Weekly Production      0%          All Costs            1.17   0.54   0.53   0.52   0.51   0.50   0.49    0.48   0.47   0.46   0.45    0.44    0.54
       Talent                 0%          Gross Margin       (0.17)   0.46   0.47   0.48   0.49   0.50   0.51    0.52   0.53   0.54   0.55    0.56    0.46




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