EXECUTIVE SUMMARY PROPRIETARY MEDIA INC.
Proprietary Media Inc., a Delaware corporation (the "Company") with corporate offices in New York City has secured five exclusive long-term licensing contracts which together, create the potential for the Company and give it the marketing power to become the "Disney for the world of nature." The master contract, which drives the business plan, and around which the other contracts are focused, is an exclusive marketing and licensing agreement with the American Zoo and Aquarium Association ("AZA"). This agreement grants the Company marketing fights for national sponsorship, and licensing initiatives in relation to the AZA and its 188 zoos and aquariums throughout North America. In exchange a significant percentage of revenues is returned to the AZA and member institutions to support conservation of species and habitats. These 188 accredited zoos and aquariums include such respected institutions as The Bronx Zoo, The National Zoo and Chicago's Shedd Aquarium. AZA institutions such as these are both popular sites for family recreation and leading centers for education, science and research. The contract with the_AZA presents three unique business and marketing opportunities. 1) The vast size and valuable demographics of the combined box office attendance of AZA member institutions (over 130,000,000annually). 2) An unmatched body of scientificcontent generated by 32,000 professionalsat AZA and member institutions. 3) Accessto hundreds of concessionstands and zoo and aquarium stores which will provide outletsfor the Company's brands and other merchandise and products. The Company's business plan and the provisions of the AZA licensing contract provide the opportunity to harness these powerful assets with appropriate sponsors, licensees, and strategic partners. The combined attendance at AZA member institutions is larger than attendance at professional baseball, basketball, football and hockey combined. Marketers are projected to spend $9.5 billion in sponsorship dollars during 2001. The scientific content, consisting of species survival, research programs and educational initiatives represents an enormous and irreplaceable body of work developed by the 32,000 professionals at AZA member institutions. Zoo and aquarium stores and concession stands, which number in the hundreds, present a significant opportunity for on-site sales of licensed products and merchandise featuring the Company's licensed brands. This vast audience, the unique distribution system and the archive of superb content provide a powerful and supportable business model. The Company seeks to raise $25,000,000 from investors in the second round of financing to launch its programs, products and services through its distribution systems. $6,000,000 has already been raised and invested in the development of company infrastructure, unique programs, products and services as well as pilot programs, market tests, focus group evaluation and feedback. Funds will be used to manage and implement the Company plan, complete platform development, expand market penetration and to promote the brand and expand and enhance the infrastructure. It is anticipated that Company revenue will reach $160,000,000 and generate gross profits of over $45,000,000 by Year Three.