1334 Westwood Blvd Suite 6 Los Angeles, California 90024 Phone: (310) 476-3668 Fax: (310) 476-9520
Web sites: www.CinemaShares.com E-mail:
Short Executive Summary
MediaShares.com holds an issued U.S. Patent for our Business Method for a new type of online IPO. Our unique Business Method is designed primarily for Licensing to entertainment companies who use our unique new method for financing their individual projects. MediaShares.com’s U.S. Patented Business Method (U.S. Patent # 6792411) is built on the concept of a fully registered NASDAQ Capital Market Direct Public Offering (DPO) that is offered to the public through Direct Registration/DRS). Our business model for selling shares in an IPO is completely unique and transformative, as we replace the typical network of retail brokers with online affinity groups. How do we do this?
Mediashares.com Brings Two Groups Together:
- Entertainment companies that desperately need new capital for highly risky investments in movies, record albums and NASCAR teams, and,
2. Their fans that desperately want to be part of the action.
Our methodology implements a legal, SEC-approved method for doing the following:
1- Fan Financing (or Crowd-Funding) of Entertainment properties such as Movies, record albums, NASCAR Teams, and Sports teams online, while
2- Simultaneously building Massive Online Communities of loyal fans around these properties
What we have developed is already being implemented, in different forms, outside the U.S. The link below allows downloading of a document showing these numerous examples of fan financing of movies, record albums, sports teams, and other projects, giving an indication of the future success of our concept when implemented in the U.S.
Right-Click or control-click on this link to download this word document:
http://www.CinemaShares.com/Docs/Fan-based_financing.doc
However, we have taken this concept of fan financing further than anyone else has to date. We’ve created a legal method of actually funding these projects in the U.S., and building massive communities around them, through the sale of fully registered stock…by selling fans as little as a single share.
1- Furthermore, with our method, in addition to receiving their share of profits, the fans will also receive a product that is worth the full value of their share purchase, by offering them a free DVD as a stock dividend for each share purchased.
How We Generate Revenues
MediaShares.com, a Nevada LLC, is the parent company of CinemaShares.com and RacingShares.com. We license our U.S. Patented (# 6792411) Business Method to media and entertainment companies raising money from their fans on the Internet. We generate multiple revenue streams from our Licensee Companies and we also own a share of each company’s earnings.
Each of our Licensee Companies sells their online fans single shares of stock in their NASDAQ listed company owning their single entertainment venture (movie, record album, video game, NASCAR Team, etc.). They offer their product as a stock dividend (in most cases a DVD) with a retail value worth a fan’s initial single-share investment (about $22). The DVD dividend and subsequent cash dividends are delivered through bar-coded e-mail coupons redeemed online and at pre-arranged retailers, or through a direct digital download.
Additional Shareholder Benefits to Fans
Our business method also builds and monetizes massive online communities around each entertainment company by offering each fan tremendous value for their single share purchase. In addition to stock, they also receive such benefits as:
· Daily Video clips and pictures from the movie set
· Contests to be in the movie or have dinner with the stars
· Voting on certain non-essential but fun items
· Participation in online chat groups and forums
· E-mails from the stars and producers
· Special merchandise offers of discounted hats and T-shirts
· Discounts to affiliated retail merchants
· E-mailed autographed pictures of the stars
These benefits are in addition to the free DVD dividend and their share of a film’s earnings.
Our First Licensee Companies
Listed below are two of the many projects we have in the works to immediately take public with our patented business method as soon as we are fully funded. We have Letters of Intent from Gene Woods Racing and we own all rights to the movie property, “FUNGI.”
· “Gene Woods Racing” – We have recently made an agreement with this Winston West NASCAR race team to finance their upcoming Busch Series NASCAR circuit. In the past season, Gene Woods finished 10th overall in the Winston West NASCAR series running the same engine all season, so all of us look forward to an extraordinary season when Gene is fully funded as a RacingShares.com Licensee Company.
Web site: http://www.GeneWoods.com
Team Video: http://216.240.154.2/racingshares/gene woods 2003-2004 564k.wmv
· “David Livingstone –The Truth Behind The Legend” – CinemaShares.com has purchased the film rights to this award-winning book by Rob Mackenzie. We will create a wonderful film about the greatest Christian missionary and film on location in Zambia.
· “FUNGI – A Comedy About Pollution” – MediaShares.com owns all rights to this very exciting ensemble action-comedy movie for kids and families. The screenplay has already won awards in four screenplay competitions including the Film Advisory Board’s Award of Excellence for upcoming family films.
Web site: http://www.Fungi-the-movie.com
Frame from “Fungi” Storyboards:
Additional MediaShares.com projects in development:
· A new Video Game from a top development team
· A famous thoroughbred race horse in Dubai
· An established movie production company with a package of movies in India
· A music production company with upcoming stars that will use our method to finance their new material and bring it to market
CinemaShares.com – Comparison to Typical Film Financing Methods:
The MediaShares Business Method is licensed though CinemaShares.com to production companies to finance movies. Our method has tremendous advantages for a net profit increase over traditional means of film financing as shown in this document below:
Document comparing the Cinemashares.Com Financing Method with traditional film financing methods:
http://www.CinemaShares.com/docs/MS_Financing_Methods_Comparison.xls
Liquidation Creates A Tax Pass-through
Each Licensee Company owns a single entertainment property, (i.e. Movie, NASCAR Team, Record album, etc.) and is designed with a specific life cycle and a built-in liquidation point of about 18 months for movies, and one year for NASCAR or Formula One Teams. At the point of each Licensee Company’s liquidation, all earnings, as well as the securitized future earnings, (minus corporate expenses) are paid out to shareholders as cash dividends. Liquidating the company in this manner enables us to offer the same tax pass-through benefits as an LLC.
To date we have the following elements in place:
· An issued U. S. Patent (# 6792411) for our Business Method
· An approval in principle from Kevin O’Neill, head of Internet offerings at the SEC, for the methodology of our planned NASDAQ offerings
· A commitment from ComputerShare to be our Direct Registration supplier.
· An exchange of equity in MediaShares.com with the New York record keeping firm, Ellen Philip, (http://www.ellenphilip.com/) for their services as record keeper in the initial stock offerings
· A Registered Trademark for the CinemaShares.com Logo
· Domain Names for MediaShares.com, CinemaShares.com, RacingShares.com, DerbyShares.com and others.
· “David Livingstone –The Truth Behind the Legend” – CinemaShares.com has the film rights to this award-winning book by Rob Mackenzie. This major film about the great Christian missionary will film on location in Zambia where we have extraordinary government cooperation
· Ben van der Veen, the screenwriter for “Che,” has delivered a finished screenplay for the Livingstone film
· A Letter of Intent from a NASCAR Team, Gene Woods Racing, to use our Business Method to finance them as our first NASCAR Team Licensee Company, including letters of Intent from two NASCAR drivers (one is a female Busch driver)
SEC Approval of Our Business Method
Unlike many of other attempts to create a workable model for fan financing, to our knowledge the MediaShares method is the only one fully compliant with SEC regulations for a public offering in the U.S. and many other countries. We created our business method with some of the top securities attorneys in the U.S. and our business method has been thoroughly examined by these highly competent securities attorneys and approved by Kevin O’Neill, the head of Internet Offerings at the SEC.
The Opportunity:
MediaShares.com is seeking additional funding: a minimum of $500k to finance our first NASDAQ-listed offering for a major Christian-themed movie, or up to $3mm to fully fund our complete business plan that would include offerings for both movies and NASCAR Teams. We seek a loan with an option to convert to stock in the first NASDAQ offering(s). Investors would receive a second exit when the parent company issues stock later. A minimum investment of $500,000 would provide a Board seat.
We have already invested over $1.5 million and we need our final funding to complete the first public offering, with expectations of two additional online IPO’s in the first year.
MediaShares.com, LLC can also accept additional equity investments from new managing members of $500,000 to $3MM. Based on our revenue projections, and a 3rd party valuation of $10MM, an investment of $3mm would produce earnings in the first 3 years as illustrated below.
See below for LLC Member’s Share of annual earnings from an equity investment in MediaShares.com of $3 MM. (Or, with earnings like these, who would want to exit?)
1st year of pre-tax earnings of $326,008 x 30% = $97,802
2nd year of pre-tax earnings of $60,959,114 x 30% = $18,287,734
3rd year of pre-tax earnings of $121,042,915 x 30% = $36,312,875
The investor’s final exit would be from a MediaShares.com IPO or acquisition based on these earnings. Below is a slide from our PowerPoint presentation (based on our revenue projections) showing an investor’s exit from a MediaShares.com IPO in five years:
We have extensive documentation to support our well-researched financial projections.
The Management Team:
Gene Massey – CinemaShares.com’s Founder/Chairman/CEO
Prior to his role as Chairman/CEO of MediaShares.com, Gene Massey has been the Owner and President of a Los Angeles-based film and television production company, Gene Massey Films, Inc., since the 1970’s. Gene is perhaps best known for working personally with Ely Callaway for eight years, producing and directing over 400 commercials for Callaway Golf. During the period of time Gene directed Callaway's commercials, their total sales increased from $21 million in 1990 to $843 million in 1997. In early 2000, Gene entered the world of online securities and founded CinemaShares.com. In September of 2004, he received a U.S. Patent (# 6,792,411) for the company’s new method of financing movies on the Internet. CinemaShares.com is now a wholly owned subsidiary of MediaShares.com
James Volpe, COO and MediaShares.com Managing Member
James Volpe has the industry recognition as the driving force and subject matter expert in the development of the Direct Stock Purchase Plan business and the Direct Registration System Direct Registration/DRS (stock ownership through the use of directly registered book-entry shares as the alternative to a physical stock certificate). Virtually every major transfer agent and scores of Fortune 1,000 Corporate Issuers have sought his counsel, direction and advice regardingthe Direct Registration System.
Peter Elwell, Chief Financial Officer
A California CPA and CFA Charterholder, Peter has 12 years of corporate finance and accounting experience with companies ranging from start up to Fortune 50 Companies. He served as an auditor at KPMG LLP and The Walt Disney Company and a held various senior finance positions at PRIMEDIA Inc, where he was responsible for SEC reporting and compliance, GAAP compliance, financial planning and analysis, systems evaluation, process improvements, monthly close, and managing staffs of professionals. Additionally, Peter has successfully advised companies in various industries on GAAP and SEC compliance, budgeting and forecasting, and business valuation. Peter is very excited about the prospects for our U.S. Patented method of fan financing through public offerings on the Internet.
Diane Schumacher, Esq., Chief Counsel
Diane brings a unique background to The Livingstone Film Company. Licensed with the California State Bar and the U.S. District Court, Central District of California. She has an extensive background in securities and prior to law school Diane worked as a senior bond trader with Schwab Institutional, supervising and coordinating execution of all fixed income electronic trades, streamlining the trading procedures to prevent undue market and brand risk exposures, and facilitating municipal, corporate and government fixed income trades for financial advisors. In 1999, Diane became a fully licensed investment adviser at Morgan Stanley Dean Witter where she earned her Series 7, 31, 63, and 65 security licenses, as well as Colorado life/health/variable annuity insurance licenses. Her extraordinary background in securities and insurance will prove invaluable to the company.
Ileana Rizescu, Chief technology Officer
Ileana Rizescu is an Information Systems manager with extensive experience in financial application systems, having been an IT consultant and Project Manager for system development and implementation in numerous international financial operations. She is fluent in the development of large-scale E-commerce systems across multiple platforms. Her work in financial modeling and comparisons of movie-financing methods has been invaluable in the development of CinemaShares.com’s unique and U.S. Patented Business Method.
Ryan Pennington – Online Creative Director
Ryan Pennington has over 10 years experience in developing and designing Web sites for high-profile companies in the entertainment and financial industries. In 1999 Ryan designed the Academy Awards Web site for Universal Studios. In addition to his entertainment experience, he created Web sites for financial companies such as Javelin Technologies, JB Oxford & Company, and Goinvest.com.
Advisory Board Members
Dan Sherkow, Producer, is the former V.P. of Paramount Pictures and Tristar Pictures and prior to those positions was an executive at NBC television. In addition to his substantial credits as a movie producer, Dan has developed a long list of excellent Hollywood contacts that will be tremendously valuable to us as we move forward. Another of Dan’s extraordinary qualifications is the fact that he holds a Series 7 SEC Securities License as a Registered Representative and has developed a film-financing risk-management system very compatible with the CinemaShares.com method.