above water productions investment package

INVESTMENT PACKAGEFor the Motion Picture Production & Film Fund Management Company

PLEASE NOTE. THE FOLLOWING BUSINESS PLAN IS A SUMMARY OF TERMS, WHICH IS INTENDED SOLELY TO SERVE AS A BASIS FOR FURTHER DISCUSSION AND DOES NOT CONSTITUTE OFFICIAL TERMS OF ANY INVESTMENT, CREDIT, OR LOAN IN THE CORPORATION.

ABOVE WATER PRODUCTIONS, Inc.

1612 Ponce De Leon Ave., 1st Floor San Juan, PR 00909

Jeanette Perez, CEO Managing Member

787-560-5984 [email protected]

Jay Webb, COO Producer

732-610-8420 [email protected]

I.COMPANY OVERVIEW (3-4)

II.RISK FACTORS (5-6)

IV.PRODUCTION & DISTRIBUTION STRATEGY (8-9)

V.A DIVERSIFIED SLATE OF FILMS (11-12)

VI.MOTION PICTURE INDUSTRY OVERVIEW (13-14)

VII.PROPOSED INVESTMENT TERMS SUMMARY (15)

VIII.MARKETS OF REVENUE (16)

A B O V E W A T E R P R O D U C T I O N S 1

Above Water Productions, INC.This packet contains the following:

IX.FINANCIALS (17-22)

X.MANAGEMENT (23)

III.PUERTO RICO AS A PRODUCTION BASE (7)

XII.REGULATION (24)

XIII.ADDITIONAL INFORMATION (25)

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM


ABOVE WATER PRODUCTIONS, INC.

Number of Units Offered Hereby: 20Price per Unit $100,000Minimum Aggregate Subscription $100,000Maximum Aggregate Subscription $2,000,000

Above Water Productions, Inc. (the “Company”), is a Puerto Rico Cor-poration created for the purpose of development, production, and financing of commercial motionpictures.

The Company is offering (“Offer-ing”) for sale to individuals and entities (the “Investors”) a maxi-mum of Twenty (20) shares (here-inafter referred to as the “Units’’).See “Description of Units and Terms of Offering.” Each Unit will be offered at a price of One Hun-dred Thousand ($100,000) Dollars. This offering is subject to negotia-tions dependent upon the timing and circumstances of the specific investment situation. However, the first unit issued at one particular price shall remain the price of the

remaining units thereafter by op-eration of law and the Company’s charter.

The Units are being offered by the Company on a `best efforts’ basis. All subscription payments will be deposited into a capital account established by the CEO of the Cor-poration. All checks shall be made payable to: Above Water Produc-tions, Inc. Capital Account.

After at least One (1) Unit (the “Minimum Subscription”) are sub-scribed for, a closing may be held as soon as practicable thereafter and the funds held in the CapitalAccount will be released to the Company. Subsequent closings may be held after additional subscriptions are received, up to the Maximum Subscription and at the same unit price as the first unit sold.

THIS OFFERING INVOLVES A SUBSTANTIAL DEGREE OF RISK.THE DATE OF THIS CONFIDEN-TIAL PRIVATE PLACEMENTMEMORANDUM IS March 28th, 2011

COMPANY MISSION STATEMENT

Our mission is to develop and produce a diversified slate of commercially viable, high quality film & entertainment products with low production costs that will provide short-term return on capital and long term residual income to our investors.

EXECUTIVE SUMMARY

Above Water Productions, Inc. is engaged in the financing, development and production of a slate of motion picture films intended for domestic and foreign theatrical release, as well as other non-theatrical venues.

Theater chains, television outlets, online video distributors, and Video on Demandrequire a pipeline of products available to supply their customers (the viewers). Assuch, they need to continuously acquire new product to keep that pipeline filled, or go outof business. In today’s world, with the tradi-tional theaters vying with television, onlinechannels, cable services, satellite, and BluRay/DVD rental & sales, there is a very strong market for such independent films, as ours.

The Company will use the relationships of its principals to maintain a steady flowof material to consider. The Company con-stantly receives material and reserves the right to change its slate based on the commerciality of these submissions.

The Company will be seeking the sum of up to $40 million in debt financing tocomplete 8 feature length films and 2 docu-mentaries. The debt will be collateralizedby each of the films produced by the Com-pany. Of the $40 million, if all is raisedsimultaneously, $10 million will be set aside as part of a revolving P&A fund (prints andads) that will help guarantee that each of the Company’s films will be theatricallydistributed. If only a portion of the funds are raised, between $8 million and $15 million,the company will produce the first 2 films on the slate. In addition to setting aside fundsfor P&A, the Company will also rollover revenue streams into its future film produc-tions. This is significant as theatrical dis-tribution drives all other ancillary revenue streams, including home video, pay/cable television, free television, soundtrack albums and merchandising.

For all films on the slate, the Company will seek to reduce risk by maximizing film tax credits and subsidies, foreign pre-sales, product placement, and taking in financial partners when appropri-ate.

THE CORPORATION

Above Water Productions, INC., (the “Com-pany”) is a Corporation that hasbeen created for the purpose of producing and distributing a diverse slate of motion pictures (“The Films”). Each Motion Picture will have a separate LLC set up under Above Water Productions, as to keep accurate books and accounting for potentiallydistinct investors. The Company’s busi-ness affairs and financial operations will be managed by Jeanette Perez; The Company’s productions operations will be managed Jay Webb; and, the company’s creative manage-ment will be handled by Vince Campanella and Jay Webb. In addition to the company’s production office and equipment, the major assets of the Company will be the Compa-ny’s ownership of the Films. The Company willengage in the ownership, production, and exploitation of the Films, and will have a one hundred (100%) Percent ownership interest in each of the films.

FEASIBILITY

The major asset of the Company will be in its ownership of the films produced and the licensing rights thereof. The Company and its Producers have created (and will create) specific business plans and conduct market analyses for each feature film production venture. These film specific business plan presentations will include script synop-ses, production and marketing strategies, cast and crew attachments and proposals, comparable film performances, and distribu-tion projections. The first two film business plan presentations have been completed and approved by the Officers of the Company. The Company will utilize the expertise of its members, and hired production staff, to maximize the potential profit of each film project. The Company will also strategicallypurchase assets that can be used repeatedly on its film productions to keep budgets low, and to add to the company’s overall equity.

RISK FACTORS


THE PURCHASE OF THE UNITS INVOLVES A HIGH DE-GREE OF RISK AND, THEREFORE, SHOULD NOT BE PUR-CHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF HIS OR HER INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW AND CONSIDER THE FOL-LOWING RISKS AS WELL AS THE OTHERINFORMATION SET FORTH HEREIN:

Recently Organized CorporationThe Company will be a newly formed Corporation, and there-fore has no history. The Company has minimal operating rev-enues and requires the net proceeds of this Offering to meet its commitment to fund a portion of the Film. The likelihood of thesuccess of the Company must be considered in light of the problems, delays, risks, expenses and difficulties frequently encountered in connection with the establishment of a new enterprise, many of which may be beyond the Company’s con-trol. The Company is subject to all of the risks inherent in the creation of a new enterprise and the competitive environment in which it will operate. While the Producers have substantialexperience in the motion picture industry, the Producers’ past success is no indication of future success or the possible success of this project. Furthermore, the Company has not yet conclud-ed the agreements for the employment of any of the persons to be associated with the Film, including the distribution of the Film.

Absence of Immediate RevenuesAs revenues from the Films, if any, will not flow into the Com-pany immediately, the Company will most likely incur signifi-cant operating losses in the first year of operations. Further-more, no assurance can be made that an Investor will realize asubstantial return on his or her investment, due to the risk fac-tors below.

Risks of Film ProductionThe production of any motion picture involves a substantial degree of risk. The costs of producing a film may be increased by reasons or factors beyond the control or present

knowledge of the Company, or the persons associated with the production of the Films, (such as delays caused by labor disputes, illness, accidents, strikes, faulty equipment, death or disability of key personnel, or bad weather). However, the Company will obtain customary production insurance for the Films and Completion Bonds which will protect the Company against some of these risks.

Risks of Film DistributionThe success of any distribution activities will depend on a number of factors over which the Company will have little or no control. Even if all territories, both domestic and foreign, are sold, there can still be no assurance that the Films will succeed on an economic level. If the total production costs exceed the total worldwide minimum guarantees or minimum advances, there may not be sufficient funds to repay to the Investors the amount of their investment in the Company. In addition, there may be problems which could adversely affect the Company’s ultimate profitability, including: public taste, which is unpre-dictable and susceptible to change; competition for theaters;competition with other films and other leisure activities; ad-vertising costs; uncertainty with respect to release dates; and the failure of other parties to fulfill their contractual obligations and other contingencies. Distribution agreements generally give a distributor significant flexibility in determining how a film will be exhibited. There can be no assurance that a distrib-utor will not limit the Film’s run, limit the territories in which the Film is exhibited, or otherwise fail to actively promote the Film. Any such action by the distributor could have a material adverse effect on the economic success of the Film andrevenues received by the Company. In the event that the Film is distributed in foreign countries, some or all of the revenues derived from such distribution may be subject to currency con-trols and other restrictions, which would restrict the available funds.

Exposure to Worldwide Economic ConditionsIt is intended that the Films will be sold to foreign and domes-tic distributors for exhibition in their respective territories. Con-


sequently, the value of the Film’s rights as determined by such distributors would be dependent upon many factors including the economic conditions in such distributor’s territory. Eco-nomic downturns, changes in the currency exchange rates and changes in economic forecasts of any or all of the individualterritories may cause a material adverse effect to the Company. Even if distribution agreements are obtained for certain territo-ries, economic changes in any territory could affect the ability to complete any transaction.

CompetitionAll aspects of the motion picture industry are highly competi-tive. The Company faces competition from “major” studios and other independent motion picture companies and television production companies, not only in attracting creative, business and technical personnel for the production of films, but also in distributing the Film. The Film will encounter competition from other films and other types of public entertainment. Thecompetition faced by motion picture theaters for the public’s leisure-time activities has increased in recent years because of the expansion of the number of entertainment outletssuch as cable and video.

Dependence on Production TeamThe Company’s success will be largely dependent upon the personal efforts of Evolving Productions and the other produc-ers and professionals hired for the Film. The loss of the services of any of these professionals will have a material adverse effect on the Company. If any one of these other individuals should become incapacitated or otherwise unavailable, a qualified suc-cessor would have to be engaged. There can be no assurancethat such a qualified successor could be obtained, or if ob-tained, on the same or similar terms and conditions.

Limited Transferability of Units; Lack of Trading MarketInvestors must be aware of the long-term nature of their invest-ment and be able to bear the economic risks of their investment for an indefinite period of time. No trading market exists for the Units and none is expected to develop. None of the Units have been registered under the Act, or under the securities laws of any state. The right of any purchaser to sell, transfer, pledge

or otherwise dispose of the Units will be significantly limited by the Act, the Company Bi-Laws, as well as state securities laws and the regulations promulgated thereunder. Consequent-ly, if as a result of some change in circumstances arising from an event not presently contemplated, an Investor wishes totransfer some or all of his or her Units, such Investor may find such transfer difficult or impossible to effect. Investors should be able to afford the entire loss of their investment in the Com-pany.

Offering PriceThe offering price of the Units has been determined by the Company, and currently bears no relationship to the Com-pany’s assets, book value, potential earnings, net worth or any other recognized criteria of value. The offering price does, how-ever, bear a relation to the estimated costs of the Company’s commitment to the production and distribution of the Film.

Tax RisksIt is the intent of the Company to file tax returns on behalf of Above Water Productions, Inc. as an S-Corporation; however, no ruling has been applied for from the Internal Revenue Ser-vice that the Company will be treated as an S-Corp for federalincome tax purposes.

THE FOREGOING ANALYSIS IS NOT INTENDED AS A SUB-STITUTE FOR CAREFUL TAX PLANNING. THE TAX MAT-TERS RELATING TO THE COMPANY AND THE TRANS-ACTIONS DESCRIBED HEREIN ARE COMPLEX AND ARE SUBJECT TO VARYING INTERPRETATIONS. MOREOVER, THE EFFECT OF EXISTING INCOME TAX LAWS AND POS-SIBLE CHANGES IN SUCH LAWS WILL VARY WITH THE PARTICULAR CIRCUMSTANCES OF EACH INVESTOR. EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITHAND RELY ON HIS OR HER OWN ADVISORS WITH RE-SPECT TO THE POSSIBLE TAX CONSEQUENCES, INCLUD-ING RISKS AND ADVANTAGES (FEDERAL, STATE AND LOCAL) OF AN INVESTMENT IN THE COMPANY, AND, IN THAT REGARD, EACH SUCH PROSPECTIVE INVESTOR SHOULD NOT RELY ON ANY TAX INFORMATION HEREIN CONTAINED.

PUERTO RICO AS A PRODUCTION BASE


The Company has developed a slate of films that can be com-pletely accommodatedby shooting in Puerto Rico. Along with the attraction of its fiscal autonomy, our research has shown that the locations available there are ideally suited for our production demands. The country has a beautiful year-round climate; Beaches, waterfalls, parks,jungles, caves, picturesque cities, and other natural land-scapes offer various backdrops fulfilling many of our location requirements. The Puerto Rican government is indeed very film-friendly, and even offers certain locations free of charge to promote the industry’s growth. Puerto Rico also offers experi-enced film crews and equipmentavailability, as many independent and studio films have mi-grated to Puerto Rico to takeadvantage of their tax incentives.

TAX INCENTIVES

The Company plans to take full advantage of Puerto Rico’s 40%

Tax Credit Program:- Producers of each film will be required contractually to spend over the needed50% of the production budget in Puerto Rico for each of the films.

- The Production will maximize their qualifying expenditures, hiring local crew, talent, and renting equipment from local companies whenever possible.

- This 40% tax credit (35% net after credit buyers discount) will significantly effect the payback schedule, & creates an even more secure investment.- Producers will also take advantage of the government tax waiver on hotel accommodations for crew and talent.

- Local Unit Production Manager will be hired to assist in the creation of a Puerto Rico Budget, as well as ensure a successful tax credit application.


PRODUCTION STRATEGYThe Company will produce its Motion Pictures at a cost far lower than if the films were being produced by studios. The companies and producers that are associated with Above Water Productions all have a significant track record of completing films on time and under budget. Keeping budgets low and production value high is the key to loweringthe risk of an independent film investment. Above Water Pro-ductions will achieve this by minimizing talent, locations, and crew expenses, while taking full advantage of taxincentives and production discounts offered through producer connections.

Big name talent will typically work at discounted rates for independent film companies, especially if the subject matter resonates with them. For example, the film “Chumley” and its portrayal of Autism will be of personal interest to many popu-lar actors for many humanitarian and philanthropic reasons. The last film created by producers and principals in the Com-pany, “Breaking Point” (released by LionsGate in 2010) stars

Tom Berenger and Busta Rhymes and boasts a modest final budget of approximately $2.7million. The film has the production value and big budget feel of a movie with at least four times the budget.

On top of the “more bang for the buck” production strategy and the advantages discussed by shooting in Puerto Rico, the Company will also be increasing potential IRR and decreasing risk by diversifying the company’s invesment into many films. Diversifying a slate of films manages the risk portfolio of the company, but more importantly increases the chance of a “Hit” Independent Film (i.e. SlumDog Millionaire,Crash, Juno, Sideways, etc.). The profits of a box office hit can be astronomical, and this is the main reason that many inves-tors find independent film investment an intriguingproposition. By selecting intriguing screenplays, and keeping production costs low, the principals can effectively increase the overall profitability of the Company.


Domestic Distribution

The Company’s principals and associated producers, as well as the currently attached co-production company, Evolving Productions, have strong existing relationships with studios, distribution companies, and foreign sales agents. TheCompany will use these connections to negotiate the most lu-crative deal with the best fitting distribution partner for each film. The Company will also allot P&A (Prints & Ads) bud-gets for each film, resulting in a guarantee that the film will be released theatrically. P&A funds held by the company also assist in the negotiation process, as percentage deals with stu-dios and distribution companies rise significantly when the distribution company is not fronting the entire P&A budget.

- LionsGate Films released Evolving Production’s last film, “Breaking Point”, domestically on DVD. Principals, produc-ers, and the director attached to the first film on the Slate, “Chumley”, successfully collaborated on “Breaking Point”. Crew familiarity will surely save time and money. From this collaboration, the Company now has direct contact to this powerhouse distribution company for the prospective release of all Above Water films.

-Peace Arch Entertainment, another tight connection to the company, owns one of the largest libraries of top quality independent feature films in the world, featuring more than 500 classic and contemporary titles. Principals and Producers also have relationships with executives at Warner Bros., Mil-lennium Pictures, CBS Films, Fox, Overture Films, and many others.

Foreign Distribution

Above Water Principals also have strong partnerships with many foreign sales agencies, and some of the attached pro-ducers have personal experience in foreign sales.Foreign Sales Agencies are focusing their film sales efforts more and more on one specific genre, so the Company will look to specific sales agents depending on the genretype of the film:

Elephant Eye Films: Specializes in Art house, and gritty independent films. Elephant Eye Films, and president Dave Robinson, have been greatly successful in the foreign sales market. Most notably, Elephant Eye secured the foreign sales rights to the Oscar Nominated Independent Hit Film, “Pre-cious”.

ContentFilm: This Foreign Sales Agency is one of the larger established companies. While its slate does reach across mul-tiple genres, Content has had great success in the family film genre. Above Water Productions associated producers have utilized ContentFilm successfully for past film sales. Other foreign sales agencies that 8 producers have built relation-ships with include: Galloping Films, Fabrication Films, and Voltage Pictures.

Many times the foreign revenue for an independent film will exceed the income generated from the domestic release. Each individual foreign market is changing rapidly, so having the right foreign sales team is very important to the financial suc-cess of an independent film

DISTRIBUTION STRATEGY

2. In a Moment’s Time (2011)1. Chumley (2011) 3. Roxy’s Town (2012)

A B O V E W A T E R P R O D U C T I O N S 1 1

ABOVE WATER SLATE OF FILMS (1ST 6 FILMS)The Slate is diversified throughout 3 genre types that allow for reasonable budgets and potentially high returns. Family Comedies/Adventure Films, Grit ty Art house Dramas, and Documentaries are three genre types that have seen great success on an independent level (while maintaining reasonable budgets). These types of films do not require huge expenses for effects, locations, or high priced talent. Acquiring unique screenplays and producing

multiple films across these genre types will di-versify the production company, and will greatly reduce the associated risk of investment. The slate is subject to change and will grow, as producers are currently searching for unique screenplays and novels that fit into Above Water’s strict vision and guidelines that can also be effectively produced in Puerto Rico.

BUDGET: $4.42 Million

Production Notes: Chumley will be the first film to be produced in the Above Water Slate of Films. Full Production will be shot in Puerto Rico, and will be co-produced by Evolving Productions.

Brief Synopsis: A nine year old autistic boy named Tristen, and his extraordi-nary relationship with a Sea Lion pup. When the sea lion, Chumley, is kid-napped to be used as a part of diabolical scheme, Tristen and his family will stop at nothing to uncover the kidnap-pers and bring them to justice.

Director: Jeff Celentano / Producers: Vince Campanella, Jay Webb, Sylvia Caminer


Production Notes: A Mix between Crashand American Beauty, this visually striking gritty Indie drama is extremely unique in script and style. Producers an-ticipate critical acclaim and great festival success.

Brief Synopsis: Accentuated by a psychot-ic hostage situation and a painfully real love story between two foreign restau-rant workers, In a Moments Time viv-idly paints the tales of ordinary people who experience moments in which time ceases to exist.

Director: In Talks with Zak Mulligan(winner of SunDance award for excel-lence in cinematography, 2010)Producers: Jordan Woolley, Jay Webb


Production Notes: The screenplay isbased largely in Puerto Rico. RoxyTown a gripping story, and is a GrittyIndependent Crime Drama similar toBreaking Point, producers last feature.

Brief Synopsis: After being an abusedchild in a crystal meth home, RoxyTowsend was thankfully taken away byan opposing gang member to be hiddenand raised by a special forces militarysergeant in Puerto Rico. A trained killingmachine by the time she went off tocollege, Roxy was well prepared whenher family’s past caught up to her.

Producers: Vince Campanella, SylviaCaminer, Jeanette Perez


5. Sumeria (2013)(Early development phase)

4. Operation High JumpDocumentary (2012)

6. Mom in the Hood (2013)(Early development phase)


Production Notes: The Company hasrights and access to reels of unseen16mm film that was taken by the U.S.military of certain expeditions toAntarctica.

Brief Synopsis: Admiral Byrd’s expedi-tions to Antarctica were meant formilitary testing in extreme weatherconditions, but after a closer look theremay have been more to it than meets theeye.

Historians/Specialists: Bellmore Brown,Eddie Perez

Producers: Vince Campanella, Jay Webb

Production Notes: This epic trilogy is being written by renowned MIT scientist, Biju Perekaden. Producers and writers are currently writing the screenplays, and will be modifying so the majoritycan be shot in Puerto Rico.

Brief Synopsis:What would happen to society and the world if there was a cure for all diseases? Follow the lives of three men’s paths who were integral in the discovery of the cure, and how it effected their lives, and the world around them.

Production Notes:This family adventure/comedy will fit nicely in with the production slate. It’s marketing campaign will be toward a more urban demographic, further diver-sifying the Above Water slate of films.

Brief Synopsis:A struggling single white mother stum-bles upon a unique job opportunity. Her life would change when she is randomly hired by popular rap group’s manager in order to teach them proper manners and etiquette before a dinner at the White House. Hilarious situational comedy and the breaking of racial boundaries ensue as the two sides come learn and appreciate each other.

Artwork Coming Soon

THE MOTION PICTURE INDUSTRY


The production of a motion picture tradi-tionally takes place in four stages:development and finance, pre-pro-duction, principal photography and post-production. The following general description is intended to provide a basic overview of the industry to aid a poten-tial financer in evaluating the merits and risks of financing the Company. The mo-tion picture industry is a highly complex and competitive business involving bothcreative and commercial considerations. The industry consists of two principal activities: production, which involves the development, financing and produc-tion of motion pictures, and distribu-tion, which involves the promotion and exploitation of completed motion pic-tures in a variety of media. Each entity involved in motion picture productionand distribution is a separate business venture, with its own management and personnel, its own budgetary constraints, and its own method of producing or exploiting motion pictures.

PRODUCTION

Development and Finance. Typically in the development stage, a producer willacquire the motion picture rights, or an option on such rights, to a literary prop-erty. At this point, the producer must secure financing for the picture.

Sources of financing include the major film studios, commercial or privatelending institutions, private investors, publicly or privately raised pools of filminvestment capital, pre-sales of ancillary rights, as well as guarantees for United States theatrical distribution rights.

Pre-Production. If it is determined that a screenplay has the potential for acommercial motion picture, the pre-pro-duction phase will commence. Activities during this phase include hiring key personnel (including the director, prin-cipal cast, and production personnel), determining production locations and shooting schedules, creating a “story hoard’” for the screenplay, revising the screenplay, developing a detailed budget,and completing the financing. Principal Photography. Principal photography consists of the actual filming of amotion picture.

Post-Production. During the post-produc-tion stage, the picture is edited, musicand sound effects are synchronized with the picture, special effects are added, and the picture is brought to a completed form known as an “answer print”.

DISTRIBUTION

Foreign and domestic distribution rights for films are sold in organized filmmarkets such as the American Film Market (AFM), MIFED, Cannes, MIP-COM and MIP 10 Asia. At these markets, domestic and foreign distributors buy film rights to exhibit films in the 47 sepa-rate worldwide territories, including the United States and Canada. Thesedistributors typically purchase such film rights from sales agents, or in some cases, from production companies.

Domestic Theatrical Distribution. Theatri-cal distribution and marketing of mo-tion pictures involves licensing the right to exhibit motion pictures on a rental basis to theaters, the creation and dis-semination of advertising and publicity, accounting, billing, credit and collection, the manufacture, inspection and dis-semination of prints used in exhibition, and the maintenance, delivery, storage, inspection and repair of such prints.Generally, distributors and exhibitors (theater owners) will enter into agree-ments whereby the exhibitor retains a portion of the “gross box office receipts,” which are the admissions paid at the box office. The balance (“gross film rentals”) is remitted to the distributor. Frequently, exhibitors and distributors must negoti-


ate as to the appropriate percentage to be remitted to the distributor, which may delay payment of the gross film rental to the distributor.

Foreign Theatrical Distribution. Foreign theatrical distribution rights may belicensed along with domestic theatrical rights or may be licensed on a territory-byterritory basis. In the latter case, the owner of the film usually receives an ad-vance, or “minimum guarantee,” against a negotiated percentage of gross film rentals from each territory. The owner generally does not receive any share of the foreign gross film rental until the for-eign distributor’s fees and expenses are recovered and the advance recouped.

Foreign and Domestic Ancillary Markets. Due to the increase in revenues fromcable/pay television, home video and other ancillary markets, domestic theatri-cal exhibition has accounted for a declin-ing percentage of the income earned by the majority of films

(I) TELEVISION. In the United States, broadcast rights are granted to networks such as NBC, ABC, CBS, or Fox for exhibition by all the network’s affiliates. Syndicated rights include rights granted to individual local television stations or groups of stations. Pay television rights

include rights granted to cable, direct broadcast satellite, microwave and other services paid for by subscribers. The right to license a picture to the television markets may be granted to domestic or foreign theatrical distributors. Television rights are generally licensed first to pay television, such as HBO, Cinemax and Showtime, for an exclusive exhibition period approximatly 12 to 18 months after their initial theatrical release; there-after to broadcast network television for a specified number of runs during an exclusive exhibition period, usually 24 to 36 months after the initial theatrical release of the motion picture; then to pay television again; and finally syndicated to independent stations (approximately 42 to 84 months after the initial theatrical release). The number of television broad-casters in Europe is currently expanding, purchasing American made movies as their first consideration.

(II) DVD/VOD/HOME VIDEO. A mo-tion picture typically becomes available on home video for purchase or rental by consumers approximately 3 monthsafter its initial theatrical release. The markets are currently shifting slightly, but video on demand is becoming very popular and has been filling in for the de-cline of the DVD rental marketplace.

(III) ANCILLARY RIGHTS. In addition to the distribution media and markets described above, the owner of a film usu-ally licenses the right to non-theatricaluses to distributors who in turn make the film available to airlines, hotels, schools, oil rigs, public libraries, prisons, com-munity groups, the armed forces, ships at sea and others, as well as the right to license the performance of musical works and sound recordings embodied in a motion picture, including public per-formance and sheet music publication. Rights may be licensed to merchandisers for the manufacture of products such as video games, toys, T-shirts, posters and other merchandise. Rights may also belicensed for novelization of the screen-play and other related book publica-tions. The entertainment business, in general, and the motion picture industry, in particular, are undergoing significant changes. Alternative forms of filmed entertainment have become available, including expanded pay and basic cable television, pay-per-view programming, Internet and home entertainment equip-ment. Recognizing the most recent technological developments and shift-ing consumer tastes, it is not possible to predict what effect these changes will have on the potential overall revenue for feature-length motion pictures.

COMPANY STRUCTURE & OPERATIONS


Above Water Productions, INC. (The Company) will be the parent Corporationfor all film productions, and will be oper-ated by its officers. The Officers of AboveWater Productions, Inc. will be Ms. Jeanette Perez, Chief Executive Officer, Jay Webb, Chief Operating Officer, and Mr. Vince Campanella, President. The officers will control all of the Company’s operations, manage its affairs, and make the decisions on its behalf. The Company will maintain a principal bank account, and then establish separate capitalaccounts for the funding and receipt of revenues for each film. Sole-purpose LLCs will be organized for each film pro-duction, thereby keeping the accounting organized and transparent, and keeping cash flow appropriated correctly.

Control of the production, distribution and exploitation of the Films and the daily operations of the Company will remain exclusively with Above Water Productions. It is also understood that the co-production company, Evolving Productions, will play a primary role in the day-to-day operations of Pre-produc-tion, Production, and Postproductionof the films it produces. The Company will rely on the expertise of this entityuntil all aspects of production are met with the highest of quality and concern.

The Officers will provide all executive, supervisory, and administrative services for each subordinate Limited Liability Companys’ operations and will enter into all contracts necessary for the produc-tion and distribution of the Films. The

Officer(s) and Producers in individual capacity have reserved the right toperform any services which a third person might have performed for the Company, including without limitation, serving as producer, director and sales agent for the Film. In such event, the Officers and/or Producer(s) may receive the reasonable compensation for said services that the third person would have received for said services.

SHAREHOLDERS REVENUES

Each of the shareholders in the company will be entitled to all revenues due to thecompany, secondary to any debt financ-ing payments and less accounting and operational expenses.

PROPOSED INVESTMENT TERMS SUMMARY

For the investment of Two Million ($2,000,000) Dollars, the Investor(s) will be awarded 20 shares (20% ownership) in the company.

1 share = One Hundred Thousand ($100,000) US DollarsThe Investor(s) will also receive dividend payments based on an internal algorithm that is based on performance, after investment principal and/or bank financing is paid completely. This offering is subject to negotiations depen-dent upon the timing and circumstances of the specific investment situation. However, the first unit issued at one particular price shall remain the price of the remaining units thereafter by operation oflaw and the Company’s charter.


MARKETS OF REVENUEAfter a picture is completed, it will be ready to be licensed for domestic the-atrical exhibition, domestic cable/pay television, network television, syndicated television (i.e., local television stations), foreign theatrical exhibition, foreign cable/pay, domestic and foreign home video markets, and other sources, such as music rights, airline and other non-theat-rical exhibition and various merchandis-ing rights (The sale of Merchandisingrights are expected to generate significant revenues for “Chumley” and other Fam-ily Films within the slate)

Producers and Sales Agents will combine efforts to fully exploit all rights for eachform of media in every territory, foreign or domestic:

US Box Office - Domestic Theatrical Sales represent the largest potential revenue, but are not necessary for a film to be fi-

nancially successful. There are numerous legitimate strategies regarding a theatri-cal release for an independent film. That being said, producers plan on at least a limited theatrical release for each of the films in the slate. Each past film pro-duced by the films co-production com-pany has secured a theatrical release.

Foreign Box Office & Acquisitions – In recent years, Foreign Theatrical distribu-tion has been a large source of revenue to United States filmmakers. Foreign Advances may account for more than 50% of an independent films Revenue. The recent opening of liberalism abroad, has paved the way for American prod-ucts to reach the overseas market, which were never available before. The foreign market is hungry for American products, in particular, any product that deals with the American entertainment industry.

Ancillary Markets (foreign & domestic)Ancillary Markets are changing and ex-panding everyday, with the introduction of internet television, and internet movie downloading and streaming through companies like iTunes and Netflix. Pro-ducers will hold onto all rights to media that may become developed in the future when at all possible. There are times when deal terms dictate the selling ofcertain ancillary rights to different distributors in certain territories as well. Current ancillary markets of revenue include:

- Cable TV, and Pay TV-Home Video, DVD, & VOD-Television Syndication & Internet-Soundtrack and Music Rights-Book/ Publishing, and Merchandising Rights

CASH FLOW (INDUSTRY OVERVIEW)


In making a film, cash outflows occur well in advance of returns. This is due to the significant costs of producing and distributing a film and the fact that such costs are usually incurred at the initial phase of film production. Cash revenues are derived separately from each market in which the film has been released. The rev-enues from release of the film in the domestic theatrical market (if applicable) typically begin when the distribution contract is closed (the advance, if any, is paid at this time) and typically continue for approximately eighteen months af-ter the theatrical release of the film. Approximately eighty percent (80%) of the theatrical revenues are received within the first 12 months of release. For the home video market, revenues begin about 6 months after the theatrical release of the film and continue for up to 24 months.

The pay television market opens up approximately 12 months after domestic theatrical release and

lasts about 6 months, with all cash revenues from this marketoccurring in that time period. The network television market follows the pay television market. Inflows from network television can last from the 25th month to the 60th month. Approximately eighty percent (80%) of the revenues are received between months 25 and48, with the remaining twenty percent (20%) being collected over the last year. Traditionally, the final market to be exploited is world-wide television syndication, which commences after the network television market. This market typically lasts between 61 and 96 months, with most, approximately seventy percent (70%), of the rev-enues occurring between months 61 and 84.

The above is a synopsis of rev-enue patterns based on industry standards in the various markets in which films are exhibited and no representation is made that the revenues for the Film will conform to the pattern discussed herein.

On the following pages are summarized initial accounting documents: the Opening Balance sheet, as well as projected P&L statement. The Projected Worldwide Advances are included, and the budgets for each of the first two films are attached (In hard copy version please reference the “Film Budgets” section. In digital version each budget will be made as an attachment and will be named accordingly)

EXPENSE PROJECTIONS

Below are the Company’s projected expenses and expendi-ture phases for Year One operations, detailing timeline of cash needs for the Company. The distribution budgets are allowances, as these budgets will be created or designed dependent on the distribution deal that is struck. The distri-bution budget may fluctuate, as the production has a goal to shoot both films under the projected budgets, These P&A budgets also act as additional insurance and contingency in case of extreme circumstances.

Film 1 (Chumley-Budget attached) 4,423,338Distribution (P&A Allowance) 1,000,000Film 2 (In a Moment’s Time-Budget attached) 3,217,619Distribution (P&A Allowance) 300,0002 years Working Capital/Co. Payroll/Purchases/Loan Payments 1,900,000

Total Expenses $10,840,957


PHASE 1 – ADVANCESStart Date: ImmediateAmount: $2.4 Million ($2,400,000) US DollarsSummary: The Company requires this initial capital in order to secure crew, talent, and additional producers for both films. Due to the strict timelines, and restricted schedules of high end crew and talent, these immediate funds are critical.

PHASE 2 - PRE PRODUCTION – Chumley / Asset AcquisitionStart Date: May 1st, 2011Amount: $1.895M (1.12M – film preproduction, 375K - 6 months working capital, 400kin equipment and office pur-chases)Summary: Preproduction will begin on May 1st. Full crew will be hired and begin workat varying start dates throughout pre production. The Company will also make the bulk of its asset purchases, including production office space and production equip-ment.

PHASE 3 – PRINCIPAL PHOTOGRAPHY - ChumleyStart Date: June 19th, 2011

(5 weeks) Amount: $1.56MSummary: Principal pho-tography is when the bulk of money is spent for crew, rentals, locations and trans-portation. The volatile, time sensitive nature of this phase of production is also when built in budget contingencies may be used.

PHASE 4 – TRANSITION - Chumley Post Production / Moment’s Time Pre Produc-tion Start Date July 24thAmount: $1.18M (830K Mo-ment’s Prepro / 350K Chum-ley Post Production )Summary: AWP Officers will coordinate the transition phase, with priority on thebeginning of pre-production for the 2nd film on the slate. The post production phase ofany film production is a more controllable environment, and is allotted 12-16 weeks to becomplete.

PHASE 5 – PRINCIPAL PHO-TOGRAPHY - In a Moment’s TimeStart Date: August 28thAmount: $1.18MSummary: Commencement of Principal Photography of the Second feature film under

Above Water Productions Slate of Films. In a Moment’s Time is a festival style film,and dailies submissions to festival representatives will begin toward the end of principal photography.

PHASE 6: POST PRODUCTION - In a Moments TimeStart Date: October 3rdAmount: $300,000 US DollarsSummary: In a Moment’s Time will have a slightly larger post-production budget in proportion to its overall budget. The film has some specific post-production services necessary due to the films style and the slow mo-tion effects.

PHASE 7: DISTRIBUTION PHASE BEGINSStart Date: November 1stAmount: $1.675M US Dollars(1,000,000 Allowance for Chumley / 300k Allowance for IAMT / 375K for next 6months of working capital)Summary: Once a cut of the film is complete, the editor, director, and producers willdecide on a final cut, based on focus group screenings of the film. Officers of the

company and the producers of the film will begin nego-tiations with distributors, focusing first on the sale of domestic rights for the film “Chumley”.

The final fund necessary will be 750k in working capital for the Company’s second yearof operations. These phases will be repeated in some fashion the following year, for oneor more of the future films on the slate (dependent on revised loan payback schedules,and revenue generated and pro-jections that will be recalculated on March 1st, 2012)


INITIAL FINANCIAL STATEMENTS

DUE TO THE VARIABLE NATURE OF BOX OFFICE REVENUE AND RESULTING RESIDUALS, THIS P&L STATEMENT IS BASED SOLELY ON PROJECTED ADVANCES FROM DISTRIBUTORS.

Above Water Productions, IncStatement of Operations (Projected)For the period April 1, 2011 through December 31, 2011 and the years ended December 31, 2012 & 2013

12/31/11 12/31/12 12/31/13Domestic theatrical sales $2,000,000 $- $-Foreign sales - Advances (Chumley) - 1,522,500 3,045,000Foreign sales – Advances (In a Moments Time) - 637,777 2,232,223Sale of tax credits - 1,750,000 -Merchandising rights - 1,750,000 - Total Revenue 2,000,000 5,660,277 5,277,223

Production costs 7,640,957 - -Distribution - 1,300,000 -Administrative expenses 193,500 258,000 64,500Equipment 300,000 - - Total operating expenses 8,134,457 1,558,000 64,500

Operating income/(loss) (6,134,457) 4,102,277 5,212,723

Interest expense(calculated at 5%) 405,000 540,000 135,000

Net income/(loss) $(6,539,457) $3,562,277 $5,077,723

*Initial payout schedules (12-18 months) for each film detailing the projected territories’ advances are included within the specific business plan for that film. Further detailed supporting documents are available upon request regarding income projections.

The chart on the following pages displays projected initial sales by region, they do not include projected royalties from theatrical, DVD, merchandising or other media. These expected sales are dependent on the cast that is acquired by the pro-ducers, and are reflective of the prospective cast that will be

approached by producers. These specific projections have been compiled using an aggregate average of recent sales projections by associates, combined with data from foreign sales compa-nies for films that are similar in cast, budget, and style. These are all mid range projections, and are not guarantees.


Chumley In a Moments Time Combined Advances

North America 2,000,000.00 1,000,000.00 3,000,000.00

AsiaJapan 140,000.00 75,000.00 215,000.00Korea 80,000.00 55,000.00 135,000.00Australia 150,000.00 50,000.00 200,000.00Malaysia 45,000.00 3 5,000.00 80,000.00Thailand 60,000.00 35,000.00 95,000.00The Philippines 70,000.00 40,000.00 110,000.00China 60,000.00 45,000.00 105,000.00Taiwan 120,000.00 60,000.00 180,000.00Singapore 20,000.00 15,000.00 35,000.00Hong Kong 50,000.00 40,000.00 90,000.00Indonesia 40,000.00 30,000.00 70,000.00India 60,000.00 40,000.00 100,000.00Pakistan 0 0 0.00ASIA TOTAL 895,000.00 520,000.00 1,415,000.00

EuropeGermany 500,000.00 350,000.00 850,000.00France 360,000.00 250,000.00 610,000.00United Kingdom 400,000.00 200,000.00 600,000.00Spain 275,000.00 165,000.00 440,000.00Italy 450,000.00 300,000.00 750,000.00Greece 85,000.00 55,000.00 140,000.00Portugal 50,000.00 22,500.00 72,500.00Scandinavia 110,000.00 55,000.00 165,000.00Switzerland 90,000.00 65,000.00 155,000.00Benelux 150,000.00 125,000.00 275,000.00Turkey 70,000.00 45,000.00 115,000.00Russia 175,000.00 125,000.00 300,000.00EUROPE TOTAL 2,715,000.00 1,757,500.00 4,472,500.00

INITIAL SALES BY REGION

The following is a projection of Returns for specific theatrical performances of the first two films on the Above Water Productions slate of films. These projected performances are highly dependent on specific deal terms and a Distributor’s P&A contribution. Distribution Agreements are very complex, and all terms are negotiated. The producers have used industry standards on revenue sharing structures and recent market data in order to illustrate this example.Upon completion of the films, Producers may also encoutner multiple scenarios whereas different distribution approaches will be the most lucrative.

AWP - PROJECTED DOMESTIC RETURNS BASED ON THEATRICAL PERFORMANCEChumley In a Moment's Time

Expected Domestic Advance 2,000,000 1,000,000P&A Monies expended by Distributors 10,000,000 5,000,000Total Advances and P&A to be recovered by Distributor 12,000,000 6,000,000

DOMESTIC REVENUES

Theatrical ReturnsDomestic Box Office Returns 50,000,000 20,000,000Cinema Share of Box Office 65% 32,500,000 13,000,000Net Box Office (to Distributor) 35% 17,500,000 7,000,000Distribution Fee (Distributor Fee) 25% 4,375,000 1,750,000Net Theatrical Revenues 13,125,000 5,250,000Advance/P&A revovery by Distributor 12,000,000 5,250,000Remaining Advance/P&A to be recovered by Distributor 0 750,000Net Theatrical Profits 1,125,000 0Distributor Theatrical Profit Share (40%) 450,000 0Producer/Picture (AWP) Theatrical Profit Share (60%) 675,000 0

DVD ReturnsRetail DVD/VOD Revenues (Direct Sales and Rentals) ** 45% 22,500,000 9,000,000Wholesale DVD Revenues (to Distributor) 50% 11,250,000 4,500,000Distribution Fees (Video Distributor Fees) 25% 2,812,500 1,125,000Net DVD Revenues 8,437,500 3,375,000Advance and P&A by Distributor 0 750,000Remaining Advances and P&A to be recovered by Distributor 0 0Net DVD Profits 8,437,500 2,625,000Distributor DVD Profit Share 25% 2,109,375 918,750Producer/Picture (AWP) Profit Share 75% 6,328,125 1,706,250

TV ReturnsGross TV Revenues (sales to Pay, Basic Cable, and Free TV) 10% 5,000,000 2,000,000Distribtion Fee (Distributor Fee) 25% 1,250,000 500,000Advance and P&A recovery by Distributor 0 0Remaining Advances and P&A recovery by Distributor 0 0Net TV Profits 3,750,000 1,500,000Distributor TV Profit Share 30% 1,125,000 450,000Producer/Picture (AWP) TV Profit Share 70% 2,625,000 1,050,000

Ancillary RevenuesGross Ancillary Revenues (sales to airlines and other anc. outlets) 5% 2,500,000 1,000,000Distribution Fee (Distributor Fee) 25% 625000 250000Advance and P&A recovery by Distributor 0 0Net Ancillary Profits 1,875,000 750,000Distributor Ancillary Profit Share 25% 468,750 187,500Producer/Picture (AWP) Anicllary Profit Share 75% 1,406,250 562,500

Domestic Picture RevenuesGross Domestic Advances (from Distributor prior to release) 2,000,000 1,000,000Theatrical Profits 675,000 0DVD Profits 6,328,125 1,706,250TV Profits 2,625,000 1,050,000Ancillary Profits 1,406,250 562,500Total Net Domestic Pricture Revenues $13,034,375 $4,318,750

Projected Advances for International Territories $4,567,500 $2,870,000Total Revenue

Total Projected Picture Revenues under scenario $17,601,875 $7,188,750 $24,790,625

Assumptions1. ** 45% was the approx. average percentage of DVD revenues in correlation to a film's US box office revenue in the year 2010. 2. This scenario assumes one distributor for all domestic rights.3. - The following projection does not account for P&A monies that AWP will have available to contribute to the films' distribution. Producers contribution greatly effects the profit sharing in favor of the producer. The P&A capital on hand will make it a viable optionfor AWP to distribute the film itself if distribution offers are less favorable. This will decrease box office #s, but eliminate distribution fees.


Chumley In a Moments Time Combined Advances

Eastern EuropePoland 47,500.00 37,500.00 85,000.00Czech Republic 50,000.00 35,000.00 85,000.00Hungary 35,000.00 20,000.00 55,000.00Romania 45,000.00 30,000.00 75,000.00Bulgaria 17,500.00 10,000.00 27,500.00Ex-Yugoslavia 20,000.00 10,000.00 30,000.00Eastern Europe Total215,000.00 142,500.00357,500.00

Latin AmericaMexico 150,000.00 90,000.00 240,000.00Argentina 60,000.00 40,000.00 100,000.00Brazil 80,000.00 55,000.00 135,000.00Central America 20,000.00 15,000.00 35,000.00Columbia 30,000.00 15,000.00 45,000.00Venezuela 20,000.00 15,000.00 35,000.00Peru 7,500.00 5,000.00 12,500.00Ecuador 7,500.00 5,000.00 12,500.00Bolivia 7,500.00 5,000.00 12,500.00Latin America Pay TV 160,000.00 100,000.00 260,000.00LATIN AMERICA TOTAL 542,500.00 345,000.00 887,500.00

OtherIsrael 65,000.00 40,000.00 105,000.00Middle East 85,000.00 35,000.00 120,000.00South Africa 50,000.00 30,000.00 80,000.00Other Total 200,000.00 105,000.00 305,000.00

Foreign Total $4,567,500.00 $2,870,000.00 $7,437,500.00

WORLD-TOTAL(advances/guarantees) $6,567,500.00 $3,870,000.00 $10,437,500.00

INITIAL SALES BY REGION CONTINUED

CHIEF EXECUTIVE OFFICER, JEANETTE PEREZ

- Over twenty years of experience in busi-ness development, negotiations, andinternational media, working with many high profile companies and individuals.

- Her connections in all facets of Puerto Rico and her key business relationships are a key to Above Water’s success.

- Led negotiations for JP International Enterprises, increasing company revenue up to 300% .

- Most recently worked with Mark Lip-sky at Who’s On First Productions as a Senior Vice President.

- Was instrumental in the creation of marketing and fund raising tools to raise non-profit funds for Puerto Rican chap-ters of Make-A-Wish and The Cancer Society

PRESIDENT/PRODUCER, VINCE CAMPANELLA

- Earned his J.D. from Suffolk University School of Law in Boston - After fifteen years in the field of law as a trial attor-ney, in 2005 Vince left his profession to become a feature film screenwriter and producer.

- He reached his goal with the successful development, production, and distribu-tion of his first script, “Order of Redemp-tion” (released under the title “Breaking Point” with LionsGate Films)

- Vince is a professional businessman, as well as a passionate, self made writer/producer.

- He also has philanthropic intentions for his films and some of his own profits. (For Chumley, he will donate to organi-zations concentrated on Autism)

VICE PRESIDENT OF OPERATIONS/PRODUCER, JAY WEBB

- President and Founder of Evolving Productions

- Jay joins the company as the industry production specialist. Along with his role as VP, Above Water has attached him and his company to co produce “Chumley”, the first film on the slate.

- Knowledge and experience in the production and distribution of motion pictures is an invaluable resource to the company.

- A young and passionate film maker, Jay has already personally been a top producer on three independent feature films, and senior editor on one; has a strong creative backbone to accompany his producing savvy.

- Business degree/background and vast technical skills are invaluable to his pro-ductions (skill set includes: Non linear editing, crew management, budgeting, scheduling, web design, graphic design, marketing, financier relations, etc.)

CO PRODUCTION COMPANY –EVOLVING PRODUCTIONS

Evolving Productions LLC is a feature film production company & postproduction facility based in both the New York/New Jersey area and Los Angeles, California. Started in 1999, it was created as a commercial production house, handling all aspects of produc-tion, post production and distribution. The company boasted numerous tele-vision spots, music videos, marketing DVDs, and electronic press kitsthrough it first few years. Bands like Fall-en from Grace, companies like Creativity in Practice, and schools like Rutgers Uni-versity were all clients of the company in its first 4 years of commercial produc-tion. It was not until 2003 when Evolving Productions LLC found its niche inindependent feature film post produc-tion. At this time, the company had the opportunity to collaborate with a few other production companies in the production of the feature film Mail Order Bride. Evolving Productions limited, but

influential, role in the post production of this comedy featuring Danny Aiello caused the company to concentratesolely on the independent film industry, leaving its commercial production as a secondary income. From this movie, Evolving Productions also created a strong relationship with the film’s princi-pal production company; BAXTER films.Evolving Productions paired up with BAXTER films for its second feature film,titled Waltzing Anna. Evolving Produc-tions was accountable for all of post pro-duction on the film, and its post produc-tion facilities grew enormously within this project. Completely digital and HD ready, the company has made a point to monitor and adapt to the fast paced tech-nological world of post production.

Just recently, in 2009, Evolving Produc-tions enjoyed its first sole feature filmproduction, where it handled all phases of the film, from fundraising through distribution. The film was an Urban thriller entitled “Breaking Point”, and starred highly respected film actors Tom Berenger and Armand Assante with sup-porting performances by hip hop stars Busta Rhymes and Kirk “Sticky Fingaz” Jones. The film enjoyed a limitedtheatrical release and the DVD was distributed by the prestigious LionsGate Films. The connections established by Evolving Productions during “Breaking Point” within every aspect (vendors, tal-ent, crew, sales agents, and distribution companies) have taken the knowledge base and professional network of the company to amazing heights. In just 10years of existence, this young, competi-tive studio has positioned itself to be-come one of the independent film indus-tries most trusted production facilities.

LEGAL MATTERS

Legal Counsel for the Company will be provided by Ivan Diaz Lopez, with offices located at Anchor Funding Plaza, 1612 Ponce De Leon Ave., San Juan Puerto Rico 00909-1833.

Office 787-721-4929Fax 787-723-1343Email [email protected]


MANAGEMENT

REGULATION


Distribution rights to motion pictures are granted legal protec-tion under the copyright laws of the United States and most foreign countries, which provide substantial civil andcriminal sanctions for unauthorized duplication and exhibition of motion pictures. The Company plans to take all appropri-ate and reasonable measures to secure, protect and maintain or obtain agreements from licensees to secure, protect and maintain copyright protection for the Film under the laws of all applicable jurisdictions. The Code and Ratings Administration of the Motion Picture Association of America, an industry trade association, assigns ratings for age-group suitability for view-ing of motion pictures.

It is anticipated that the Film will be submitted for such rating.In addition, United States television networks as well as foreign governments impose restrictions on the content of motion pictures, which may restrict in whole or in part exhibition on television or in a particular territory.


ADDITIONAL INFORMATIONAll original documentation referred to herein or copies thereof and information with respect to this Investment Package and Offering of the Units is retained in the offices of Above Water Productions. The foregoing summaries do not purport to becomprehensive or definitive. As with any summary, some details and exception have been omitted. All references herein to documents are qualified in their entirety by reference to each such document. If any of the statements in this PPM are in conflict with any of the terms of any such documents or agree-ments the terms of such documents or agreements will govern.

Reference is made to the actual documents and agreements for a complete understanding of what they contain. Each prospec-tive investor is urged to review all such documents and agree-ments. Copies of all documents in connection with the transac-tions described in this PPM are available for inspection at the

offices of the Company at 1612 Ponce DeLeon Ave., 1 St.Floor - San Juan, PR 00909 upon request. Prospective investorsmay be required to execute non-disclosure agreements as a prerequisite to reviewing documents determined by the Com-pany to contain proprietary, confidential or otherwise sensitive information. Prospective investors or their respective represen-tatives may, at any time (during normal business hours) prior to the sale of the Units ask questions of the Company or its em-ployees with respect to the terms and conditions of this Offer-ing of the Units and request additional information necessary to verify any information contained in this PPM. The Company will provide answers to such questions and provide suchinformation to the extent such answers and information are possessed by the Company or its officers or can be obtained by them without unreasonable effort or expense.

INVESTMENT PACKAGEFor the Motion Picture Production & Film Fund Management Company

PLEASE NOTE. THE FOLLOWING BUSINESS PLAN IS A SUMMARY OF TERMS, WHICH IS INTENDED SOLELY TO SERVE AS A BASIS FOR FURTHER DISCUSSION AND DOES NOT CONSTITUTE OFFICIAL TERMS OF ANY INVESTMENT, CREDIT, OR LOAN IN THE CORPORATION.

above water productions investment package

Documents