Business Plan William J Terry terryjincorporated@gmail.com - - PDF document

Business Plan

William J Terry

terryjincorporated@gmail.com 302-743-1415 101 Smyrna Ave, Wilmington, De 19809

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Table of Contents

1.0 Executive Summary ........................................................................................... 3

1.1 Objectives ............................................................................................................................. 3 1.2 Mission Statement ............................................................................................................... 6 1.3 Keys to Success .................................................................................................................... 6

2.0 Company Summary ........................................................................................... 6

2.1 Company Ownership .......................................................................................................... 6 2.2 Pre-Operating Source and Use of Funds .......................................................................... 7

3.0 Products and Services ........................................................................................ 8 4.0 Market Summary .............................................................................................11

4.1 Demographics Summary .................................................................................................. 14 4.2 Industry Analysis .............................................................................................................. 15

5.0 Marketing Strategy/Implementation .............................................................17

5.1 SWOT Analysis ................................................................................................................. 19

6.0 Management Summary ...................................................................................20 7.0 Financial Summary ..........................................................................................21

7.1 Revenue Forecast............................................................................................................... 21 7.2 Personnel Forecast ............................................................................................................ 23 7.3 Income Statement .............................................................................................................. 24 7.4 Statement of Cash Flow .................................................................................................... 26 7.5 Balance Sheet ..................................................................................................................... 28 7.6 Break-Even Analysis ......................................................................................................... 29 7.7 Best & Worst Case ............................................................................................................ 30

Appendix A – Year 1 Financials ...........................................................................31

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1.0 Executive Summary

Terry J Incorporated (“the Company”) is a new entertainment industry venture. Based in Newark, Delaware, Terry J Inc. will offer a variety of investment and employment vehicles, including The Vortex nightclub, Vortex Promotional City Tour Bus, and a performance runway venue that will tie into the new online Vortex Magazine that showcases local talent. Terry J Inc. will also provide new and existing artists with the gateway into the worldwide, billion dollar music industry by offering professional promotional services to assist talented individuals and groups to realize their dreams to be a part of the highly lucrative music and entertainment business. Terry J Inc. will contribute to all aspects of the entertainment industry, from creating a local nightclub venue to presenting fashion shows and providing entertainer management services. Initially, however, the Company will focus on launching The Vortex Nightclub, affectionately referred to as The V. The Vortex Nightclub will eliminate the need for local residents and visitors to seek high quality entertainment in other larger metropolitan areas. The club will offer big name entertainment and seek to become a major draw to downtown Newark by offering entertainment options not found in any other area establishments. In today’s entertainment business, it is necessary to have the proper contacts and industry knowledge to succeed. Terry J Inc. was founded by an entertainment industry professional with

• ver 2 decades of experience and expertise. The Company will especially focus on revitalizing

and putting back into the Newark community via its high profile nightclub, while also cultivating and developing new, fresh local talent in all genres. Terry J Inc. will leverage this expertise, along with industry connections to offer a range of services, from mentoring their own aspiring entertainers to providing promotional services to venues and other artists in a variety of genres. Emphasis will be placed on providing quality entertainment to a diverse audience in order to maximize its geographical and demographical reach. The Company will work with artists, using its extensive lists of industry resources and contacts to promote live music concerts and special events, providing a full array of marketing and advertising promotional services, and facilitating music CD and downloading sales - handling all the details and negotiating the best contracts possible. To achieve its goals, the Company will purchase the Park N Shop Shopping Center in Newark, Delaware, refurbish it, and utilize three of the retail spaces to house the Company, while the

• ther spaces will produce rental revenue on a monthly basis.

The market will consist of a several-mile area surrounding downtown Newark, as well as

• utlying areas of New Castle County and beyond. Within just a five-mile radius from the

Company’s proposed location downtown, there are more than 158,000 people, including over 58,000 households, with an average household income of $78,000. The state government, numerous major employers, and University of Delaware, with 21,000 students, are also nearby, creating a year-round flow of consumers around this area. From here, The V will tap into multiple growing, related markets. Bars and clubs are a $20 billion a year industry, having grown over the past few years as consumer spending away from home has increased

• substantially. The market for event and concert promotion is $25 billion in the United States,

and event and party planners generate over $6 billion in revenue. According to market research

4 firm IBISWorld, “Despite the economic downturn and low discretionary income, Americans continued to attend and spend at live events over the past five years. As the economy picks up in the next few years, industry growth will continue… Over the five years to 2018, industry revenue is projected to continue increasing.” The Company will be a unique hybrid bar/club/entertainment concept locally, giving it an edge over established businesses and helping make it a profitable and growing venture that employs many local residents. Terry J Inc.’s management realizes it will need a comprehensive marketing plan in order to be

• successful. Initially, the Company will primarily market its services in the greater Newark area,

expanding regionally as it strategically grows and increases its staff and services. The Company will sponsor high-visibility live bus tours, as well as runway, scouting and promotional events that will draw favorable publicity, and develop name recognition within the region. The Company will push public awareness through traditional marketing channels, as well at via robust Internet advertising initiatives. The Company will utilize guerilla marketing techniques, emailing lists, online social networks and event listing sites to push publicity, along with SMS text message advertising to the Company’s own lists, and sponsored snippets on third-party lists. The Company will build its brand by marketing events under a consistent name to develop a loyal clientele that will follow Terry J Inc. from one city to another. Terry J Inc. is led by its founder and namesake, William J. Terry, a veteran of the entertainment

• industry. Mr. Terry brings with him with a unique blend of skill sets and several years of

experience in different facets of the industry – ensuring that this diverse venture will be a

• success. He is well-experienced in marketing different music genres, and establishing solid

client relations and public relations. Through over 20 years in the entertainment industry, he has developed an in-depth knowledge and understanding of the industry and its market dynamics.

• Mr. Terry is dedicated to ensuring the long term success and sustainable profitability of the

Company by providing astute financial oversight and employing solid business practices. To achieve its objectives, Terry J Inc. is seeking investments to achieve a total of $22 million in

• funds. These funds will allow the Company to secure a retail lease, complete build-out of the

space, outfit the nightclub, perform marketing, develop the other aspects of the business concept, and have working capital during its early stages. The following is a breakdown of the anticipated funding usage:  $5 Million – Demolition of existing structure and build a loft-style, multi-level Night Club with Corporate Office and 4 Music Production Studios on the top/3rd floor  $4 Million – Lead Certification and new construction

• $1.5 Million - fully operational Solar Panel Grid for entire property
• $1.0 Million - 2 - 60 ft. water towers that will supply and store drinkable Water

from rain, also the water system with be attached to a filtering system that will also be attached to the city water line as well.

• $1.5 Million - Build a fully self-sustainable Greenhouse, which will produce its
• wn produce for the Nightclub and to sell to the public a few 3 days out of the

week.

5  $6 million - Purchase Property with the existing businesses from the current owner and the Parking which will basically be the entire property. To rebuild, and reroute the water lines plus sewage routing underground according to the city planning committee.  $4 million - Completely reface the entire plaza, new lighting set-up on the solar grid, running new water and sewage lines to the 2 newly built buildings, and the cost to dig up the concrete and lay it back down with new parking lines  $2.5 Million - Demo and relocate 2 of the storefronts in the Plaza for 2 new businesses that are potential coming in, including a tanning salon and possibly a clothing store. Exit Strategy After the first year, the Company will access the finances of the business, keeping in mind that it could take up to 3-4 years for the project to fully take-off. Depending on the viability, the Company will either retain the Nightclub and Greenhouse, or bring in other businesses to fill their spaces and maintain the other businesses in the plaza - completely operating as shopping plaza and continuing to do business the way it has in the past but with more appealing companies to attract customers to the plaza. Plan C option is to sell the plaza to investors to regain any possible loss.

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1.1 Objectives

• Develop a client base of loyal customers, talented individuals and premium venues
• Create ancillary revenue streams
• Build a marquee company that is expandable

1.2 Mission Statement

Terry J Inc. will promote and help reestablish economic growth in the City of Newark in

• Delaware. Initially, the Company will seek to create 110 direct employment opportunities within

the Newark Area from investment with goals focused on expansion and increasing that number within the upcoming years of operation. The Company will create 60-90 indirect positions, due to construction, as well.

1.3 Keys to Success

• Create a full-service entertainment and promotion company
• Grow the customer and client lists daily by using a variety of marketing methods
• Maintain a lean overhead while continually growing revenues

2.0 Company Summary

Terry J Incorporated is a start-up S-Corporation that was registered in the State of Delaware on June 6, 2014 and will be based in downtown Newark, Delaware. The intent is for the Company to operate and manage of group of related businesses under a single corporate umbrella.

2.1 Company Ownership

Terry J Incorporated is wholly owned by William J. Terry (100%).

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2.2 Pre-Operating Source and Use of Funds

The Pre-Operating Source & Use of Funds section details the Expenses, Assets, Inventory, Investment and Debt needed to facilitate the Company’s business objectives. The Pre-Operating expenses and funding occur before the Company receives revenue.

Expenses Design Fees $650,000 Fees and Permits $7,000 Marketing $34,900 Professional Services $5,000 Total Expenses $696,900 Assets Inventory $150,000 Property/Building $12,850,000 Lead Certified Equipment $4,000,000 Reface Plaza $4,000,000 Total Assets $21,000,000 Total Use of Funds $21,696,900

Pre-Operating Use of Funds

Investment Owner $0 Investor $22,000,000 Total Investment $22,000,000 Debt Current Debt $0 Long-Term Debt $0 Total Debt $0 Total Source of Funds $22,000,000

Pre-Operating Source of Funds

Total Source of Funds $22,000,000 Total Use of Funds $21,696,900 Month 1 Starting Cash $303,100

Total Source & Use of Funds

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 Investment Debt Expenses Assets Cash

Total Source & Use of Funds

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3.0 Products and Services

Terry J Inc. will consist of a group of entertainment-based businesses that share the same vision and are intertwined via marketing strategies to attract customers to all venues. Initially, the Company will focus on opening The Vortex Nightclub in one of the many unoccupied spaces in downtown Newark. The following are the different businesses envisioned under the Terry J Inc. umbrella. They are: The Vortex Nightclub The Vortex Nightclub or The V is club innovation personified. As more than a singular entity, the V will function as an entertainment powerhouse, featuring a mobile marketing team that both advertises for the V Club in Newark as well as hosts outdoor events in a multitude of locations en route. This approach will embody an avant garde marketing strategy fused directly with a source of local entertainment to create a completely unexplored business concept. Newark is a heavily populated college town that has many bars, but lacks any type of legitimate

• club. For those individuals seeking an authentic club experience, they are forced to travel to

Philadelphia or Baltimore, which is both inconvenient and expensive. The V will eliminate the need to travel and spend money outside of the community. As such, The V will position itself as the go-to destination, not just for its impeccable life entertainment offerings, but for its unrivaled design. Ever-aware of its neighbors, The V's environmentally conscious design will greatly add to its unique appeal. The goal in design is to source “green” and eco-friendly materials and become the first dance club in the area to be LEED certified. The goal is to ultimately have the club source its own produce products from company owed greenhouses. The Company wants clients to have the best possible entertainment experience that is healthy and creates an amazing space for the dance hall connoisseur to let loose and have fun. To this end, the club will feature several bars, multi-level dance floors, acoustically cognizant fixtures, and private areas for parties and special events. There will of course be VIP areas, small scale kitchen service, and lighting and decorating schemes that epitomize class and cool. Innovation is key for The V. The club will allow for a massive influx of foot traffic by being designed in such a way that participants movement through the facility “flows” and promotes movement. This will maximize the amount

• f people inside the club without making patrons feel crushed and congested by the crowds.

Hours of operation will be: Monday thru Thursday 5:00 p.m. to Midnight Saturday - 8:00 p.m. to 2:00 a.m. Sunday - Noon to 12 a.m. Terry J Inc Talent, Entertainment, Production, and Management Agency Terry J. Inc. Talent Agency and Management Team will manage newly discovered talent in a variety of genres from vocal performance, hip hop/rap, modeling, acting, and music production. With more than 20 years of experience in the industry, the Company’s founder will scout the

9 best of the best and offer opportunities to deserving individuals who may otherwise have missed the opportunity due to their demographic locations. The agency’s website will showcase Bio’s

• f all artists with short segments of their best performances for organizations to view and request

that individual to audition or to perform. The website will also be the hub of information for all things-Terry J Inc.-related, including promotional venues, upcoming events, hot news on entertainment, and where to be when the Company is in a city. The Fashion hub of the agency will showcase up and coming designers as well many of the famous names known to-date with a ecommerce portal to purchase and link your right to the designers’ merchant websites. The Vortex Promotional City Tour and Runway Show The Vortex Promotional City Tour and Runway Show will be a new and innovative way to promote the opening up a nightclub and showcase fashion along with discovered talent. The Vortex Promotional Tour bus will travel to 24 cites holding entertainment venues consisting of runway shows, followed by after parties premiering Terry J Inc. artists. Each venue will sell and promote items exclusively from the Company’s venue merchant stands, giving the communities the opportunity to take home a piece of the Terry J Inc. agency with them. Park N Shop Shopping Center Terry J Inc. will purchase the Park N Shop Shopping Center in Newark, Delaware, refurbish it, and utilize three of the retail spaces to house the Company. Terry J Inc. will reface the store fronts, and replace the signage, windows, entrances and pavement in front the building. Additionally, the 45-50 employees of those businesses that are absorbed by Terry J Inc. will be placed on the Company payroll, while the other spaces will provide rental/lease revenue on a monthly basis. Rents will range from $2,500-$3,400 per month. Contracts already in place will be honored. In addition, any franchise contracts will be bought out, if there are any, which will be included in the purchase price. The Company will negotiate potential temporary relocation of businesses and associated cost.

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4.0 Market Summary

The National Restaurant Association (NRA) projects that the industry will generate more than $683 billion in 2014, up from $660 billion in 2013 and $632 billion in 2012, at 990,000 “eating and drinking” locations nationwide. 1 The “bars and taverns” segment, as shown, will account for an estimated $20 billion in 2014, up from nearly $19 billion in revenue in 2013. The market for of Concert and Event Promotion is nearly $25 billion in the United States and has grown 1.4% annually during the past five years, according to IBISWorld. It is a large and diverse market, composed of approximately 49,800 companies across the country. The market is highly fragmented, with most promoters having a limited geographic reach and few employees. In 2013, the industry’s four largest companies were estimated to account for less than 25.0% of

• revenue. “Despite the economic downturn and low discretionary income, Americans continued

to attend and spend at live events over the past five years,” states IBISWorld. “As the economy picks up in the next few years, industry growth will continue… Over the five years to 2018, industry revenue is projected to continue increasing.”2 In addition, the market for party and event planners in the United States is valued at around $6 billion annually, according to market research firm IBISWorld. There are more than 328,000 businesses nationwide. The vast majority are small companies, often with just the owner as the lone employee – IBISWorld reports that the industry employs just over 343,000 people. While

1 National Restaurant Association. “2014 Restaurant Industry Fact Sheet.” Obtained at:

http://www.restaurant.org/News-Research/Research/Facts-at-a-Glance

2 IBISWorld. “Concert & Event Promotion in the US.” April 2014.

http://www.ibisworld.com/industry/default.aspx?indid=1960

12 the market was affected by the economic downturn, when companies and individuals scaled back

• n discretionary spending, the market has fully recovered and experiencing growth. Revenue

grew 2.5% in 2012, for example, to $6.3 billion, with profit accounting for 15.7% of revenue. In addition, IBISWorld states that, “The industry can expect to roar back to life with the improving economy in the five years to 2017. The industry is set to benefit from climbing corporate profit and per capita disposable income…. Similarly, profit will expand as clients choose higher-priced

• ptions.3

Customers for The V and The Vortex Promotional Tour bus will be targeted through various promotions and advertising initiatives. They are live music lovers and club-goers, typically ages 18-35 (21+ after 9 p.m.), both males and females. They will include everyone from corporate professionals to students and blue collar workers. The common bond will be the appreciation of a great venue for music, drinks, and a great live entertainment environment. While there are many bars in town, there is nothing like The V. With 21,000-student The University of Delaware, the state government, and major employers in the area like WL Gore, DuPont, Dow, Siemens, AstraZeneca, and the Delaware Technology Park, there are huge numbers of young, educated residents who want more than a local dive bar or music club. The V will provide this and more. Potential locations have been found at the Newark Shopping Plaza in Downtown Main Street Newark, and College Square Shopping, two locations right in downtown that have open spaces, huge parking lots and a series of unused store fronts that is are perfect locations for the

• Company. The population surrounding here, as shown below, is large but the night life and

businesses are minimal.

Downtown Newark, DE and Environs4 Population 1-mi. 3-mi. 5-mi. 2013 Total Population 13,952 74,173 158,324 2013 Male Population 6,142 35,235 75,964 2013 Female Population 7,810 38,938 82,360 % 2013 Male Population 44.02% 47.50% 47.98% % 2013 Female Population 55.98% 52.50% 52.02% 2013 Total Population: Adult 12,355 61,256 124,735 2013 Total Daytime Population 18,639 72,287 171,720 2013 Total Employees 10,398 32,802 90,836 2013 Total Population: Median Age 23 29 33

3 IBISWorld. “The Party & Event Planners Market.” Sept. 2013. http://www.ibisworld.com/industry/party-event-

planners.html

4 Loopnet/Pitney Bowes MapInfo. “College Square.”

http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=18406839

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Downtown Newark, DE and Environs4 Population 1-mi. 3-mi. 5-mi. 2013 Total Population: Adult Median Age 22 41 43 2013 Total population: Under 5 years 516 3,658 9,508 2013 Total population: 5 to 9 years 431 3,436 8,982 2013 Total population: 10 to 14 years 396 3,502 9,223 2013 Total population: 15 to 19 years 2,514 8,923 14,694 2013 Total population: 20 to 24 years 5,627 12,918 18,666 2013 Total population: 25 to 29 years 688 5,248 12,130 2013 Total population: 30 to 34 years 427 4,188 10,594 2013 Total population: 35 to 39 years 417 3,828 9,845 2013 Total population: 40 to 44 years 389 3,908 10,063 2013 Total population: 45 to 49 years 411 4,226 10,538 2013 Total population: 50 to 54 years 394 4,414 10,691 2013 Total population: 55 to 59 years 362 3,893 9,123 2013 Total population: 60 to 64 years 343 3,511 7,661 2013 Total population: 65 to 69 years 271 2,714 5,643 2013 Total population: 70 to 74 years 193 1,901 3,826 2013 Total population: 75 to 79 years 206 1,632 3,055 2013 Total population: 80 to 84 years 169 1,118 2,097 2013 Total population: 85 years and over 198 1,155 1,985 2013 Households 4,263 26,354 58,347 2013 Household Income: Average $40,422 $73,052 $78,437

Within this market, competitors will include established businesses, including myriad restaurants and bars, including independent locations and franchised concepts. More specifically to the downtown area, the Company will compete against venues like Klondike Kate’s, Kildare’s, Catherine Rooney’s, Grottos, and Deer Park tavern, among others. However, there are no establishments on the level of The V. The Company will promote a fun and entertaining setting, introducing an all-encompassing concept to the local market as well as more refined bar and nightclub environment. On a regional level, the Company will compete against music and entertainment venues; however, the Company will have an edge against these venues as well because of its unique presentation of being both a marketing and promotional vehicle fused with the best source of local entertainment.

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4.1 Demographics Summary

The chart below shows the population for surrounding New Castle County, from which the Company will also draw.

U.S. Census Bureau American Communities Survey People QuickFacts New Castle County Delaware Population, 2013 estimate 549,684 925,749 Population, 2010 (April 1) estimates base 538,479 897,936 Population, percent change, April 1, 2010 to July 1, 2013 2.1% 3.1% Population, 2010 538,479 897,934 Persons under 5 years, percent, 2013 6.2% 6.1% Persons under 18 years, percent, 2013 22.3% 22.0% Persons 65 years and over, percent, 2013 13.4% 15.9% Female persons, percent, 2013 51.6% 51.6% White alone, percent, 2013 (a) 67.6% 71.1% Black or African American alone, percent, 2013 (a) 24.7% 22.1% American Indian and Alaska Native alone, percent, 2013 (a) 0.4% 0.7% Asian alone, percent, 2013 (a) 5.0% 3.6% Native Hawaiian and Other Pacific Islander alone, percent, 2013 (a) 0.1% 0.1% Two or More Races, percent, 2013 2.3% 2.4% Hispanic or Latino, percent, 2013 (b) 9.2% 8.7% White alone, not Hispanic or Latino, percent, 2013 60.1% 64.1% Living in same house 1 year & over, percent, 2008-2012 85.1% 85.8% Foreign born persons, percent, 2008-2012 10.0% 8.3% Language other than English spoken at home, pct age 5+, 2008-2012 14.4% 12.3% High school graduate or higher, percent of persons age 25+, 2008- 2012 89.2% 87.7% Bachelor's degree or higher, percent of persons age 25+, 2008-2012 33.5% 28.5% Veterans, 2008-2012 37,481 76,752 Mean travel time to work (minutes), workers age 16+, 2008-2012 24.9 24.8 Housing units, 2013 218,592 412,009 Homeownership rate, 2008-2012 70.2% 72.7% Housing units in multi-unit structures, percent, 2008-2012 22.9% 17.7% Median value of owner-occupied housing units, 2008-2012 $251,200 $241,100 Households, 2008-2012 200,618 334,076 Persons per household, 2008-2012 2.61 2.62 Per capita money income in past 12 months (2012 dollars), 2008-2012 $32,247 $29,733 Median household income, 2008-2012 $64,670 $60,119 Persons below poverty level, percent, 2008-2012 10.7% 11.5%

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4.2 Industry Analysis

The Company will operate in this distinct industry, Drinking Places (Alcoholic Beverages) (NAICS 722410). All data presented in this section is retrieved from the U.S. Census Bureau. The map below shows sales per capita. The map below shows sales in millions.

16 Drinking Places (Alcoholic Beverages) This industry comprises establishments known as bars, taverns, nightclubs, or drinking places primarily engaged in preparing and serving alcoholic beverages for immediate consumption. These establishments may also provide limited food services.

Establishments Total Sales Annual Payroll Paid Employees 46,924 $18,318,068,000 $4,183,499,000 356,194 $11,745 $51,427 Employees per Establishment Payroll as a Percent of Sales

USA Drinking Places (Alcoholic Beverages)

Sales per Establishment Payroll per Establishment $390,377 $89,155 7.6 22.8% Annual Payroll per Employee Sales Per Employee Establishments Total Sales Annual Payroll Paid Employees 1,290 $472,529,000 $109,038,000 8,238 $366,302 $84,526

New Jersey Drinking Places (Alcoholic Beverages)

Sales per Establishment Payroll per Establishment Annual Payroll per Employee Sales Per Employee 6.4 23.1% Employees per Establishment Payroll as a Percent of Sales $13,236 $57,360 Establishments Total Sales Annual Payroll Paid Employees 84 $22,669,000 $4,623,000 309 Payroll per Establishment $269,869 $55,036 Annual Payroll per Employee Sales Per Employee Employees per Establishment Payroll as a Percent of Sales 3.7 20.4%

Newark Drinking Places (Alcoholic Beverages)

Sales per Establishment $14,961 $73,362

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5.0 Marketing Strategy/Implementation

Terry J Inc. will primarily market its services in the greater Newark area and surrounding states with a niche marketing approach to target and attract customers and artists of all ages and genres. High-visibility promotional events will draw favorable publicity, and develop name recognition within the region. The Terry J Inc. team will also focus on capitalizing on extensive list of industry resources, contacts, and influential associates developed throughout the owner’s years in the industry. The Company will also drive awareness by using traditional marketing channels such as radio and TV advertising. In true Terry J Inc. style, conventional and traditional avenues of promotion are made obsolete by the addition of a new sector of the Terry Group that merges Club V advertisement and promotion into its own profit-making entity. For the first two to three years of operation, the Company will be launching its promotional bus tour, which will circumnavigate 24 cities on the East Coast, hosting V sponsored parties. These street events will feature new talent as well as the Vortex's own MC's and professional models and dancers known as the V Girls. The purpose

• f these shows is to advertise the Vortex nightclub and create revenue by hosting these outdoor

stage spectaculars. The tour bus team will essentially create an outdoor dance party with a fashion show, bringing all forms of entertainment and art to the public. After the two-three year tour is completed, the talent and employees of the tour bus team venture will be assimilated into positions working for The Vortex Nightclub as well as the Vortex Magazine. At this time, the Vortex nightclub and online magazine will have enough exposure to bring in big name draws to the club and to focus on signing new talent to the Terry J. Inc. label. Any talent that signs with the group commits to allocating ten percent of their profits directly back to the Group in exchange for booking, exposure, and future performance tours. The Group discovers, cultivates, and leases out new talent for the entertainment industry. The Company also sees the need for other creative approaches to marketing to its customers. For marketers, the currently economic climate is creating a need to both cut costs and reach consumers in more ways than ever. Creative marketing initiatives are not only cost-effective but they also can result in new revenue streams. Tactics for succeeding in the new economy include: Grassroots market research: The Company will communicate with its customers via online forums and monitor ratings and review sites and industry blogs to determine the prevailing consumer attitudes, the level of Terry J Inc. brand recognition and trends the Company needs to address. Customer retention/cross-selling: The Company will also place a premium on marketing to the existing customer bases of Terry J Inc. artists and venues. It is much cheaper and far more effective because of the existing relationships and an understanding of their needs. Video: The Terry J Inc. brand and its services will be presented through dynamic multimedia communications vehicles. Videos, in particular, are often the most effective methods of communicating a message, and the Company’s industry connections and capabilities will allow it to create marketing videos that can be deployed to YouTube, Google Video, and other sites.

18 Relevancy-based marketing initiatives: With the wide-ranging technological capabilities of Terry J Inc., the Company will be able to reach customers across a variety of devices, including e-mail, smartphones, text messages, and instant messages. This all hinges on creating a pertinent message that is tailored to individual customer segments. Enhanced search marketing: As the Internet becomes the primary source for both business-to- business and business-to-consumer information, a strong presence on major search engines is paramount to educate customers and form a dialogue that extends beyond one medium. Effective search optimization includes using a multi-channel approach with social media, such as Facebook, Twitter, and blogs, as well as mobile, and local search. The Company will also drive awareness by using traditional marketing channels such as radio and TV advertising, flyers and other printed materials, and aggressive online advertising and through live scouting and entertainment events. Additionally, the Company will employ the following methods: Internet Advertising: The Company will allot portions of its marketing budget for strategic Internet marketing, including search engine optimization. This tactic involves organically improving the quality and volume of traffic to its website through search engines. Search engine

• ptimization can also target different kinds of searches, including image, local, and industry-

specific vertical search engines. Website: An attractive and user-friendly website will be professionally designed. It will outline the Company’s philosophy and services, as well as spotlight the experienced Terry J Inc. management, as well as the Company’s talented artists. A calendar of events, especially Company sponsored promotional events, bus tour and live concerts will encourage return visitors to the website. Outdoor marketing: The Company’s signage, on its building and company vehicles will be prominently placed for maximum visibility to both foot and vehicular traffic. Word of mouth: Terry J Inc.’s adherence to offering a quality service paired with superior public relations and customer service will garner a solid and positive reputation within the industry and local communities. The Company’s clients will undoubtedly return for additional services, while also spreading the word to their friends, family and colleagues. Through this simple marketing tactic, Terry J Inc. will become further recognized as the premier full-service entertainment and promotion and talent Management Company.

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5.1 SWOT Analysis

Internal Factors External Factors Positive Negative Appeals to all genres of artists & aficionados Travels to a wide variety of

Strengths Weaknesses

Owner has 20 years experience and in-depth knowledge of the industry Innovative/comprehensive business concept Offers something for everyone Adding new clients and ancillary revenue

• ther music and entertainment types

Threats

Playing off popularity of rap and R&B and streams as Company grows and production/management companies Prolonged economic recovery running in a timely manner

• f the lucrative national market

Not having the Company up and Other existing entertainment venues Expanding to capture a sizeable share cities within the region New Company Lacks brand recognition Niche market without current consumers Currently undercapitalized

Opportunities

Capturing a large share of a lucrative market with a wide region

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6.0 Management Summary

William Terry, Owner, Chief Executive Officer, and President Terry J Inc. will be owned and managed by its founder and namesake, William Terry, who possesses the requisite management skills and experience to successfully run this operation. Mr. Terry is an entrepreneurial-minded leader who is a veteran of the entertainment industry. During his 20 years in the industry, he has gained considerable experience and expertise that will be invaluable toward the success of the Company. Mr. Terry has outstanding customer service, public relations, and communications skills, and is well-connected within the industry and the community, making penetration into the marketplace easily attainable. As a strong team builder and experienced promoter with expertise in efficiently coordinating resources, he will oversee the day-to-day operation of the Company. He will work directly with every aspect of club design, talent management, and public relations. Mr. Terry will also work closely with the Company’s Chief Operating Officer, Colleen Olkowski who will assist with the creation and execution of planning and management strategies. The Company will greatly benefit from Mr. Terry’s numerous direct ties to several local governing bodies and social services. Mr. Terry has been a resident of Newark for several years and is a great proponent of bringing in local businesses that will put money directly back into the community to help Newark achieve a growth potential that would otherwise never be possible because of the constant ebb and flow of the migratory living situations of University of Delaware students.

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7.0 Financial Summary

7.1 Revenue Forecast

The Revenue Forecast section details the revenue that the Company will receive. This section also details the direct costs.

Year 1 Year 2 Year 3 Year 4 Year 5 Units Door Cover 147,571 261,128 353,906 431,786 526,802 Bar Drinks 254,228 449,859 609,693 743,859 907,550 Food 16,690 29,532 40,025 48,833 59,579 Venue 96,000 122,980 166,675 203,353 248,102 Talent Agency 2,432 4,304 5,834 7,117 8,684 Studio Time 3,722 5,735 6,819 7,732 8,344 Total Units 520,678 873,575 1,182,988 1,442,716 1,759,095 Unit Price Door Cover $4.68 $4.68 $4.68 $4.68 $4.68 Bar Drinks $4.25 $4.25 $4.25 $4.25 $4.25 Food $6.00 $6.00 $6.00 $6.00 $6.00 Venue $36.00 $36.00 $36.00 $36.00 $36.00 Talent Agency $225.00 $225.00 $225.00 $225.00 $225.00 Studio Time $100.00 $100.00 $100.00 $100.00 $100.00 Revenue Door Cover $690,420 $1,221,706 $1,655,777 $2,020,139 $2,464,682 Bar Drinks $1,080,468 $1,911,900 $2,591,196 $3,161,403 $3,857,086 Food $100,137 $177,194 $240,151 $292,997 $357,473 Venue $3,456,000 $4,427,288 $6,000,299 $7,320,696 $8,931,655 Talent Agency $547,309 $968,469 $1,312,565 $1,601,402 $1,953,800 Studio Time $372,170 $573,496 $681,859 $773,178 $834,360 Gross Revenue $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256 Unit Cost Door Cover $0.23 $0.23 $0.23 $0.23 $0.23 Bar Drinks $1.28 $1.28 $1.28 $1.28 $1.28 Food $2.10 $2.10 $2.10 $2.10 $2.10 Venue $1.80 $1.80 $1.80 $1.80 $1.80 Talent Agency $11.25 $11.25 $11.25 $11.25 $11.25 Studio Time $5.00 $5.00 $5.00 $5.00 $5.00 Direct Costs Door Cover $34,521 $61,085 $82,789 $101,007 $123,234 Bar Drinks $324,141 $573,570 $777,359 $948,421 $1,157,126 Food $35,048 $62,018 $84,053 $102,549 $125,116 Venue $172,800 $221,364 $300,015 $366,035 $446,583 Talent Agency $27,365 $48,423 $65,628 $80,070 $97,690 Studio Time $18,609 $28,675 $34,093 $38,659 $41,718 Direct Cost of Revenue $612,484 $995,136 $1,343,937 $1,636,741 $1,991,466

Yearly Revenue

22

$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 Year 1 Year 2 Year 3 Year 4 Year 5

Yearly Revenue Projections

Studio Time Talent Agency Venue Food Bar Drinks Door Cover $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Year 1 Revenue Projections

Studio Time Talent Agency Venue Food Bar Drinks Door Cover

23

7.2 Personnel Forecast

The Personnel section breaks down the payroll expense line on the Income Statement. It provides total headcount, average salary per category and total pay per category.

Year 1 Year 2 Year 3 Year 4 Year 5 Headcount T.J Inc Corp Staff 18 20 22 24 26 PRMO Tour Staff 51 58 65 72 79 The V Night Club 41 46 51 56 61 Total Headcount 110 124 138 152 166 Compensation T.J Inc Corp Staff $59,948 $61,747 $63,599 $65,507 $67,472 PRMO Tour Staff $25,020 $25,770 $26,543 $27,340 $28,160 The V Night Club $27,924 $28,762 $29,625 $30,514 $31,429 Payroll T.J Inc Corp Staff $1,079,070 $1,234,936 $1,399,182 $1,572,172 $1,754,282 PRMO Tour Staff $1,276,000 $1,494,671 $1,725,315 $1,968,451 $2,224,623 The V Night Club $1,144,900 $1,323,058 $1,510,874 $1,708,769 $1,917,178 Total Payroll $3,499,970 $4,052,665 $4,635,371 $5,249,392 $5,896,083

Yearly Personnel

24

7.3 Income Statement

The Income Statement is also known as a Profit & Loss Statement. This table breaks down Revenue, Cost of Revenue, Operating Expenses, Depreciation, Interest, Taxes, and bottom line Earnings for the first five years.

Year 1 Year 2 Year 3 Year 4 Year 5 Gross Revenue $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256 Direct Cost of Revenue $612,484 $995,136 $1,343,937 $1,636,741 $1,991,466 Merchant Fees $95,291 $140,794 $188,821 $229,140 $277,579 Total Cost of Revenue $707,774 $1,135,930 $1,532,757 $1,865,881 $2,269,045 Gross Profit $5,644,932 $8,250,323 $11,055,289 $13,410,135 $16,236,211 Gross Margin Percentage 88.9% 87.9% 87.8% 87.8% 87.7% Operating Expenses Travel Gas $5,500 $6,050 $6,655 $7,321 $8,053 Truck Insurance $7,500 $8,250 $9,075 $9,983 $10,981 Marketing & Advertising $317,635 $469,313 $629,402 $763,801 $925,263 Business Insurance $18,000 $19,800 $21,780 $23,958 $26,354 Professional Services $60,000 $66,000 $72,600 $79,860 $87,846 Utilities & Related $180,000 $198,000 $217,800 $239,580 $263,538 Travel & Entertainment $90,000 $99,000 $108,900 $119,790 $131,769 Dues & Subscriptions $18,000 $19,800 $21,780 $23,958 $26,354 Total Payroll $3,499,970 $4,052,665 $4,635,371 $5,249,392 $5,896,083 Payroll Taxes $419,996 $486,320 $556,245 $629,927 $707,530 Payroll Benefits $104,999 $121,580 $139,061 $157,482 $176,882 Total Operating Expenses $4,721,601 $5,546,777 $6,418,669 $7,305,051 $8,260,652 Operating Profit $923,331 $2,703,546 $4,636,620 $6,105,084 $7,975,558 Operating Profit Percentage 14.5% 28.8% 36.8% 40.0% 43.1% Depreciation $267,361 $275,694 $284,028 $292,361 $300,694 Earning Before Interest & Taxes $655,970 $2,427,852 $4,352,593 $5,812,723 $7,674,864 EBIT Percentage 10.3% 25.9% 34.6% 38.1% 41.5% Interest Expense $0 $0 $0 $0 $0 Taxes Accrued $0 $0 $0 $0 $0 Earnings $655,970 $2,427,852 $4,352,593 $5,812,723 $7,674,864 Earnings Percentage 10.3% 25.9% 34.6% 38.1% 41.5%

Yearly Income Statement

25

$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 Year 1 Year 2 Year 3 Year 4 Year 5

Yearly Income Statement

Gross Revenue Gross Profit Operating Profit Earning Before Interest & Taxes Earnings ($100,000) $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Year 1 Income Statement

Gross Revenue Gross Profit Operating Profit Earning Before Interest & Taxes Earnings

26

7.4 Statement of Cash Flow

The Statement of Cash Flow illustrates the Company’s cash received and cash spent for the five year period. The table is broken down into three main categories; Operating, Investing, and

• Financing. The Operating Activities report the Company’s business operations. Investing

Activities detail the Company’s property, plant, and equipment transactions. Financing Activities account for the Company’s paid-in capital and debt.

Year 1 Year 2 Year 3 Year 4 Year 5 Operating Activities Cash Received Gross Revenue $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256 Total Cash Received $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256 Cash Used Cost of Revenue $707,774 $1,135,930 $1,532,757 $1,865,881 $2,269,045 Payroll/Taxes/Benefits $4,024,966 $4,660,564 $5,330,677 $6,036,801 $6,780,496 Other Operating Expenses $696,635 $886,213 $1,087,992 $1,268,250 $1,480,157 Additional Inventory $10,465 $13,116 $8,430 $10,212 $12,380 Interest Expense $0 $0 $0 $0 $0 Taxes Accrued $0 $0 $0 $0 $0 Total Cash Used $5,439,840 $6,695,823 $7,959,856 $9,181,143 $10,542,077 Net Cash From/(Used By) Operating $912,865 $2,690,430 $4,628,190 $6,094,873 $7,963,178 Investing Activities Cash Received Proceeds from Property/Land $0 $0 $0 $0 $0 Proceeds from Equipment $0 $0 $0 $0 $0 Total Cash Received $0 $0 $0 $0 $0 Cash Used Purchase of Property/Land $0 $0 $0 $0 $0 Purchase of Equipment $250,000 $250,000 $250,000 $250,000 $250,000 Total Cash Used $250,000 $250,000 $250,000 $250,000 $250,000 Net Cash From/(Used By) Investing ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) Financing Activities Cash Received Proceeds from Investors $0 $0 $0 $0 $0 Proceeds from Long-Term Debt $0 $0 $0 $0 $0 Total Cash Received $0 $0 $0 $0 $0 Cash Used Dividends Paid $0 $0 $0 $0 $0 Repayment of Long-Term Debt $0 $0 $0 $0 $0 Total Cash Used $0 $0 $0 $0 $0 Net Cash From/(Used By) Financing $0 $0 $0 $0 $0 Net Cash Flow $662,865 $2,440,430 $4,378,190 $5,844,873 $7,713,178 Cash Balance $965,965 $3,406,395 $7,784,586 $13,629,459 $21,342,637

Yearly Statement of Cash Flow

27

($200,000) $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Year 1 Statement of Cash Flow

Net Cash Flow Cash Balance

28

7.5 Balance Sheet

The Balance Sheet shows the Company’s Assets, Liabilities, and Shareholders’ Equity for a given time period.

Year 1 Year 2 Year 3 Year 4 Year 5 Assets Current Assets Cash $965,965 $3,406,395 $7,784,586 $13,629,459 $21,342,637 Inventory $160,465 $173,582 $182,012 $192,223 $204,603 Other Current Assets $0 $0 $0 $0 $0 Total Current Assets $1,126,431 $3,579,977 $7,966,597 $13,821,682 $21,547,240 Long-Term Assets Property/Building $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 Lead Certified Equipment $4,250,000 $4,500,000 $4,750,000 $5,000,000 $5,250,000 Reface Plaza $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 Accumulated Depreciation ($267,361) ($543,056) ($827,083) ($1,119,444) ($1,420,139) Total Long-Term Assets $20,832,639 $20,806,944 $20,772,917 $20,730,556 $20,679,861 Total Assets $21,959,070 $24,386,921 $28,739,514 $34,552,237 $42,227,101 Liabilities Current Liabilities Current Debt $0 $0 $0 $0 $0 Total Current Liabilities $0 $0 $0 $0 $0 Long-Term Liabilities Long-Term Debt $0 $0 $0 $0 $0 Total Long-Term Liabilities $0 $0 $0 $0 $0 Total Liabilities $0 $0 $0 $0 $0 Shareholders' Equity Paid-in Capital Owner $0 $0 $0 $0 $0 Investor $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 Total Paid-in Capital $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 Retained Earnings Previous Retained Earnings ($696,900) ($40,930) $2,386,921 $6,739,514 $12,552,237 Current Earnings $655,970 $2,427,852 $4,352,593 $5,812,723 $7,674,864 Total Retained Earnings ($40,930) $2,386,921 $6,739,514 $12,552,237 $20,227,101 Total Shareholders' Equity $21,959,070 $24,386,921 $28,739,514 $34,552,237 $42,227,101 Total Liabilities & Equity $21,959,070 $24,386,921 $28,739,514 $34,552,237 $42,227,101

Yearly Balance Sheet

29

7.6 Break-Even Analysis

The Operating Break-Even accounts for the Company’s revenue and expenses on the Income Statement.

Analysis Month Operating Break-Even 11

Break-Even

Operating Break-Even

$0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 Month Accumulated Revenue Accumulated Expenses

30

7.7 Best & Worst Case

The Best and Worst Case analysis illustrates what the Company’s financial statements might look like with an increase or decrease in Revenue.

10%

Year 1 Year 2 Year 3 Year 4 Year 5 Gross Revenue $6,987,976 $10,324,878 $13,846,851 $16,803,618 $20,355,781 Total Cost of Revenue $778,552 $1,249,523 $1,686,033 $2,052,469 $2,495,950 Gross Profit $6,209,425 $9,075,355 $12,160,818 $14,751,149 $17,859,832 Gross Margin Percentage 88.9% 87.9% 87.8% 87.8% 87.7% Total Operating Expenses $4,721,601 $5,546,777 $6,418,669 $7,305,051 $8,260,652 Operating Profit $1,487,824 $3,528,579 $5,742,149 $7,446,098 $9,599,179 Operating Profit Percentage 21.3% 34.2% 41.5% 44.3% 47.2% Earning Before Interest & Taxes $1,220,463 $3,252,884 $5,458,122 $7,153,737 $9,298,485 EBIT Percentage 17.5% 31.5% 39.4% 42.6% 45.7% Interest Expense $0 $0 $0 $0 $0 Taxes Accrued $0 $0 $0 $0 $0 Earnings $1,220,463 $3,252,884 $5,458,122 $7,153,737 $9,298,485 Earnings Percentage 17.5% 31.5% 39.4% 42.6% 45.7% Net Cash Flow $1,227,359 $3,265,462 $5,483,719 $7,185,886 $9,336,799 Cash Balance $1,530,459 $4,795,921 $10,279,640 $17,465,527 $26,802,326

Best Case -- Revenue Increase By: 10%

Year 1 Year 2 Year 3 Year 4 Year 5 Gross Revenue $5,717,435 $8,447,628 $11,329,242 $13,748,415 $16,654,730 Total Cost of Revenue $636,997 $1,022,337 $1,379,482 $1,679,293 $2,042,141 Gross Profit $5,080,438 $7,425,291 $9,949,761 $12,069,122 $14,612,590 Gross Margin Percentage 88.9% 87.9% 87.8% 87.8% 87.7% Total Operating Expenses $4,721,601 $5,546,777 $6,418,669 $7,305,051 $8,260,652 Operating Profit $358,838 $1,878,514 $3,531,092 $4,764,071 $6,351,937 Operating Profit Percentage 6.3% 22.2% 31.2% 34.7% 38.1% Earning Before Interest & Taxes $91,477 $1,602,819 $3,247,064 $4,471,710 $6,051,243 EBIT Percentage 1.6% 19.0% 28.7% 32.5% 36.3% Interest Expense $0 $0 $0 $0 $0 Taxes Accrued $0 $0 $0 $0 $0 Earnings $91,477 $1,602,819 $3,247,064 $4,471,710 $6,051,243 Earnings Percentage 1.6% 19.0% 28.7% 32.5% 36.3% Net Cash Flow $98,372 $1,615,398 $3,272,662 $4,503,859 $6,089,557 Cash Balance $401,472 $2,016,870 $5,289,532 $9,793,391 $15,882,948

Worst Case -- Revenue Decrease By:

31

Appendix A – Year 1 Financials

Year 1 Monthly Forecast illustrates the Company’s first 12 months after the Pre-Operating stage.

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Units Door Cover 8,493 9,046 9,634 10,261 10,928 11,639 12,396 13,202 14,061 14,975 15,949 16,987 Bar Drinks 14,632 15,584 16,597 17,677 18,826 20,051 21,355 22,744 24,223 25,799 27,477 29,264 Food 961 1,023 1,090 1,160 1,236 1,316 1,402 1,493 1,590 1,694 1,804 1,921 Venue 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Talent Agency 140 149 159 169 180 192 204 218 232 247 263 280 Studio Time 214 228 243 259 276 294 313 333 355 378 402 428 Total Units 32,443 34,033 35,726 37,529 39,449 41,494 43,673 45,993 48,464 51,095 53,898 56,883 Unit Price Door Cover $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 Bar Drinks $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 Food $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 Venue $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 Talent Agency $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 Studio Time $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 Revenue Door Cover $39,737 $42,321 $45,074 $48,005 $51,128 $54,453 $57,995 $61,767 $65,784 $70,063 $74,620 $79,473 Bar Drinks $62,186 $66,230 $70,538 $75,126 $80,012 $85,216 $90,759 $96,662 $102,949 $109,645 $116,776 $124,371 Food $5,763 $6,138 $6,537 $6,963 $7,415 $7,898 $8,411 $8,959 $9,541 $10,162 $10,823 $11,527 Venue $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 Talent Agency $31,500 $33,549 $35,731 $38,055 $40,530 $43,166 $45,974 $48,964 $52,148 $55,540 $59,153 $63,000 Studio Time $21,420 $22,813 $24,297 $25,877 $27,560 $29,353 $31,262 $33,295 $35,461 $37,767 $40,224 $42,840 Gross Revenue $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061 Unit Cost Door Cover $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 Bar Drinks $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 Food $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 Venue $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 Talent Agency $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 Studio Time $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00

Year 1 Revenue

32

Direct Costs Door Cover $1,987 $2,116 $2,254 $2,400 $2,556 $2,723 $2,900 $3,088 $3,289 $3,503 $3,731 $3,974 Bar Drinks $18,656 $19,869 $21,161 $22,538 $24,004 $25,565 $27,228 $28,999 $30,885 $32,893 $35,033 $37,311 Food $2,017 $2,148 $2,288 $2,437 $2,595 $2,764 $2,944 $3,135 $3,339 $3,557 $3,788 $4,034 Venue $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 Talent Agency $1,575 $1,677 $1,787 $1,903 $2,026 $2,158 $2,299 $2,448 $2,607 $2,777 $2,958 $3,150 Studio Time $1,071 $1,141 $1,215 $1,294 $1,378 $1,468 $1,563 $1,665 $1,773 $1,888 $2,011 $2,142 Direct Cost of Revenue $39,706 $41,352 $43,105 $44,972 $46,960 $49,078 $51,333 $53,735 $56,294 $59,019 $61,921 $65,011 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Headcount T.J Inc Corp Staff 18 18 18 18 18 18 18 18 18 18 18 18 PRMO Tour Staff 51 51 51 51 51 51 51 51 51 51 51 51 The V Night Club 41 41 41 41 41 41 41 41 41 41 41 41 Total Headcount 110 110 110 110 110 110 110 110 110 110 110 110 Compensation T.J Inc Corp Staff $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 PRMO Tour Staff $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 The V Night Club $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 Payroll T.J Inc Corp Staff $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 PRMO Tour Staff $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 The V Night Club $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 Total Payroll $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664

Year 1 Personnel

33

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Gross Revenue $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061 Direct Cost of Revenue $39,706 $41,352 $43,105 $44,972 $46,960 $49,078 $51,333 $53,735 $56,294 $59,019 $61,921 $65,011 Merchant Fees $6,862 $7,019 $7,185 $7,363 $7,552 $7,754 $7,969 $8,197 $8,441 $8,700 $8,977 $9,271 Total Cost of Revenue $46,568 $48,370 $50,290 $52,335 $54,512 $56,832 $59,302 $61,933 $64,735 $67,719 $70,897 $74,282 Gross Profit $410,888 $419,531 $428,737 $438,541 $448,983 $460,104 $471,949 $484,564 $497,999 $512,308 $527,548 $543,779 Gross Margin Percentage 89.8% 89.7% 89.5% 89.3% 89.2% 89.0% 88.8% 88.7% 88.5% 88.3% 88.2% 88.0% Operating Expenses Travel Gas $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 Truck Insurance $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 Marketing & Advertising $22,873 $23,395 $23,951 $24,544 $25,175 $25,847 $26,563 $27,325 $28,137 $29,001 $29,922 $30,903 Business Insurance $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Professional Services $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Utilities & Related $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 Travel & Entertainment $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 Dues & Subscriptions $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Total Payroll $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 Payroll Taxes $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 Payroll Benefits $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 Total Operating Expenses $389,870 $390,392 $390,948 $391,541 $392,172 $392,844 $393,560 $394,322 $395,134 $395,998 $396,919 $397,900 Operating Profit $21,018 $29,139 $37,789 $47,000 $56,811 $67,260 $78,389 $90,242 $102,865 $116,310 $130,629 $145,879 Operating Profit Percentage 4.6% 6.2% 7.9% 9.6% 11.3% 13.0% 14.8% 16.5% 18.3% 20.1% 21.8% 23.6% Depreciation $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,917 Earning Before Interest & Taxes ($1,204) $6,917 $15,566 $24,778 $34,589 $45,038 $56,167 $68,019 $80,643 $94,087 $108,406 $122,962 EBIT Percentage

• 0.3%

1.5% 3.2% 5.0% 6.9% 8.7% 10.6% 12.4% 14.3% 16.2% 18.1% 19.9% Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Accrued $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Earnings ($1,204) $6,917 $15,566 $24,778 $34,589 $45,038 $56,167 $68,019 $80,643 $94,087 $108,406 $122,962 Earnings Percentage

• 0.3%

1.5% 3.2% 5.0% 6.9% 8.7% 10.6% 12.4% 14.3% 16.2% 18.1% 19.9%

Year 1 Income Statement

34

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Operating Activities Cash Received Gross Revenue $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061 Total Cash Received $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061 Cash Used Cost of Revenue $46,568 $48,370 $50,290 $52,335 $54,512 $56,832 $59,302 $61,933 $64,735 $67,719 $70,897 $74,282 Payroll/Taxes/Benefits $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 Other Operating Expenses $54,456 $54,978 $55,535 $56,127 $56,758 $57,430 $58,146 $58,908 $59,720 $60,585 $61,506 $62,486 Additional Inventory $622 $662 $705 $751 $800 $852 $907 $967 $1,029 $1,096 $1,168 $905 Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Accrued $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cash Used $437,059 $439,425 $441,944 $444,627 $447,484 $450,528 $453,769 $457,221 $460,898 $464,814 $468,984 $473,088 Net Cash From/(Used By) Operating $20,396 $28,477 $37,083 $46,249 $56,011 $66,408 $77,482 $89,275 $101,836 $115,213 $129,461 $144,973 Investing Activities Cash Received Proceeds from Property/Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Proceeds from Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash Used Purchase of Property/Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Purchase of Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $250,000 Total Cash Used $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $250,000 Net Cash From/(Used By) Investing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($250,000) Financing Activities Cash Received Proceeds from Investors $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Proceeds from Long-Term Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash Used Dividends Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Repayment of Long-Term Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cash Used $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Cash From/(Used By) Financing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Cash Flow $20,396 $28,477 $37,083 $46,249 $56,011 $66,408 $77,482 $89,275 $101,836 $115,213 $129,461 ($105,027) Cash Balance $323,496 $351,973 $389,057 $435,306 $491,317 $557,725 $635,207 $724,482 $826,318 $941,531 $1,070,992 $965,965

Year 1 Statement of Cash Flow

35

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Assets Current Assets Cash $323,496 $351,973 $389,057 $435,306 $491,317 $557,725 $635,207 $724,482 $826,318 $941,531 $1,070,992 $965,965 Inventory $150,622 $151,284 $151,989 $152,741 $153,541 $154,393 $155,300 $156,267 $157,296 $158,392 $159,560 $160,465 Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Assets $474,118 $503,257 $541,046 $588,046 $644,858 $712,118 $790,507 $880,749 $983,614 $1,099,924 $1,230,552 $1,126,431 Long-Term Assets Property/Building $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 Lead Certified Equipment $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,250,000 Reface Plaza $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 Accumulated Depreciation ($22,222) ($44,444) ($66,667) ($88,889) ($111,111) ($133,333) ($155,556) ($177,778) ($200,000) ($222,222) ($244,444) ($267,361) Total Long-Term Assets $20,827,778 $20,805,556 $20,783,333 $20,761,111 $20,738,889 $20,716,667 $20,694,444 $20,672,222 $20,650,000 $20,627,778 $20,605,556 $20,832,639 Total Assets $21,301,896 $21,308,813 $21,324,379 $21,349,157 $21,383,747 $21,428,785 $21,484,952 $21,552,971 $21,633,614 $21,727,701 $21,836,108 $21,959,070 Liabilities Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Current Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Long-Term Liabilities Long-Term Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Long-Term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shareholders' Equity Paid-in Capital Owner $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Investor $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 Total Paid-in Capital $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 Retained Earnings Previous Retained Earnings ($696,900) ($698,104) ($691,187) ($675,621) ($650,843) ($616,253) ($571,215) ($515,048) ($447,029) ($366,386) ($272,299) ($163,892) Current Earnings ($1,204) $6,917 $15,566 $24,778 $34,589 $45,038 $56,167 $68,019 $80,643 $94,087 $108,406 $122,962 Total Retained Earnings ($698,104) ($691,187) ($675,621) ($650,843) ($616,253) ($571,215) ($515,048) ($447,029) ($366,386) ($272,299) ($163,892) ($40,930) Total Shareholders' Equity $21,301,896 $21,308,813 $21,324,379 $21,349,157 $21,383,747 $21,428,785 $21,484,952 $21,552,971 $21,633,614 $21,727,701 $21,836,108 $21,959,070 Total Liabilities & Equity $21,301,896 $21,308,813 $21,324,379 $21,349,157 $21,383,747 $21,428,785 $21,484,952 $21,552,971 $21,633,614 $21,727,701 $21,836,108 $21,959,070

Year 1 Balance Sheet