FINANCIAL PLAN

Startup Costs

1stQtr

2ndQtr

3rdQtr

4thQtr

5thQtr

6thQtr

$0

$50,000

$100,000

$150,000

Revenue & Expenses (in thousands)

Revenue

Expenses

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

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.

Startup Expenses

3%4%5%

59%

2%2%2%

23%

Leasehold I mprovements Capital EquipmentLocation & Admin Exp Working CapitalPayroll AdvertisingI nventory Other

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

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.

PROJECTED BALANCE SHEETIconoclast 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   $ 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.

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 AnalysisIconoclast Studios

Cost Description Fixed Costs ($) Variable Costs (%)

Variable Costs

Cost of Goods Sold $ 56,310,000 0.0%

Inventory $ 3,733,000 0.0%

Raw Materials 0.0%

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

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.