Initiative Presentation

July 2008

Market Overview

As you may know, the recording industry is struggling to adapt to the increasing popularity in digital music.

Market Overview

The major record labels have been unable to decipher the young consumers needs, only 10% of the bands they support end up generating positive cash flow.

Market Overview The weak revenue has triggered a rise in the

amount of artist taking their chances with independent distribution. The “indie” market has grown but still hasn’t figured out a standard model to make money. This is the problem WAPTunes solves.

Purpose

WAPTunes is a social networking site which empowers musical artists to self-publish, sell songs & ringtones, promote shows, reach their fan base and make money.

Widget Marketing Initiative

The WAPTunes widget marketing initiative consists of two different proprietary widgets.

1. Ringtone Widget

2. WAP Widget

Widget Marketing Initiative

Ringtone Widget

The artists get a widget from WAPTunes that they can post anywhere on the net (Myspace, Facebook, etc.) that allows them to sell their ringtones on their different web pages. This widget drives the buyer back to WAPTunes e-commerce.

Widget Marketing Initiative

WAP Widget

The WAP widget can also be put on all of the artists’ web pages. This widget drives fans with iPhones to get the WAP on their iPhones as a music / radio iPhone application.

Widget Marketing InitiativeHow the WAP Widget works: You put in your iPhone cell phone number on

the WAPTunes website You receive a text message on your iPhone You open the text, which allows you to open

the WAP on your iPhone From the WAP you can hear the music of the

artist you’ve selected as well as the WAPTunes radio stations.

Viral Distribution

WAPTunes will have a viral distribution feature that allows users to recommend WAPTunes to all their friends in their email address book. This feature is also used by StumbleUpon.com which has acquired millions of users.

MarketingPhase 1 We get musical artists to sign-up and upload their

content to WAPTunes.com

Phase 2 We continue to sign artists, and we begin to get

fans to visit the site for their favorite artist or radio station.

Marketing

How do we get bands to sign up?

What incentives drive them to use WAPTunes as their primary site as opposed to Myspace, PureVolume, Virb, Speakerheart, etc?

Other Draws

Aside from providing new ways for artists to sell music to their fans, what else sets WAPTunes apart from other music sites?

Other Draws

WAPTunes is splitting song and ringtone sales

with the artist:

80/20.

Other Draws

Compare this 80/20 with the iTunes split of

60/40.

Where you’d rather sell your music?

OR

Other Draws

Myspace doesn’t even allow musicians to sell their music from the site.

Other Draws

That is not the only thing that sets WAPTunes

apart from the competition.

Other DrawsUnlike Myspace and other music sites;

WAPTunes shares ad dollars with the bands that are attracting people to the site.

Other Draws In addition to sharing ad sales dollars with the

artist that is generating them, WAPTunes is donating a percentage of ad sales to major, popular charities.

Other Draws

Aside from these reasons…

Other Draws

What’s the point of throwing away money, even

if it is a good cause?

Other Draws

BECAUSE NO OTHER MUSIC SITE IS DOING IT.

Other DrawsNot only is no one else doing it, philanthropy is

a trend that has been on the rise since the 80’s. From the We Are the World Foundation to Brad and Angelina donating $1 million to African schools, we are sure to see a constant rise in social awareness and concern.

Other DrawsRemember the Lance Armstrong bracelets?

Wildly ugly, yellow, rubber bands… for a good

cause.

Other Draws

Not only are charities wildly popular right now, but no other music site tells the musicians:

“we’ll split song and ringtone sales 80/20 with you, give you a percentage of the ad sales your page generates and also donate a percentage of the ad sales to your favorite charity.”

Other DrawsTo sum up what WAPTunes does differently: We have a WAP application which allows artists

to reach fans in a new way We give musical artists a per cent of the ad

sales their page generates We split all music and ringtone sales 80/20 We donate a per cent of ad sales to charity

Other Draws

These fiscal and socially responsible points are all “hot items” in the indie music scene and will make the WAPTunes viral marketing campaign have a life of its own.

Other Draws

Bands would start using their profiles on other sites to re-direct their fans to their WAPTunes page because the other websites don’t pay the bands a percent of the ad revenue their page generates.

Other Draws

Bands other profiles would also be sites that re-direct the fans to WAPTunes if they have one of the WAPTunes widgets posted.

Other Draws

The WAPTunes viral marketing campaign will be a force to be reckoned with.

Phase 1

The mission of Phase 1 is to get 3,000 bands signed up in 90 days, specifically targeting the Nashville music scene.

Phase 1 – Use of Proceeds

Assuming proposed financing is completed, the Company expects to

allocate the net proceeds of approximately $500,000 to the

following purpose over the next 12 months.

Phase 1 – Use of Proceeds

Cash Outflows (Expenses):Software Development $ 145,000

Marketing $ 260,000

Employee Fees $ 275,000

Streaming / Hosting $ 50,000

Corporate Overhead $ 72,000

Working Capital $ 145,000

Legal & Accounting $ 125,000

Total $1,000,000

Phase 1 – Use of Proceeds

To the extent that less than $500,000 is received, fewer proceeds will be available to us to accomplish our business objectives. In

this connection, we reserve the right to change the expected use of proceeds to meet

unforeseen changed circumstances and contingencies affecting our marketing

program.

July August September

Bands - 500 3,000

Members - 12,500 75,000

Web Banner Inventory - 2,250 13,500

HIGH___75% $ 1,687.50 $ 10,125.00

At $2 CPM $ 3,375.00 $ 20,250.00

At $5 CPM $ 8,437.50 $ 50,625.00

At $10 CMP $ 16,875.00 $ 101,250.00

MEDIUM___50% 1,125.00 6,750.00

At $2 CPM $ 2,250.00 $ 13,500.00

At $5 CPM $ 5,625.00 $ 33,750.00

At $10 CMP $ 11,250.00 $ 67,500.00

LOW___25% 562.50 3,375.00

At $2 CPM $ 1,125.00 $ 6,750.00

At $5 CPM $ 2,812.50 $ 16,875.00

At $10 CMP $ 5,625.00 $ 33,750.00

Phase 1 – Website Ad Revenue

At $2 and selling only 25% of the available inventory, the website ads will

generate $7,875.00 in Phase 1.

Phase 1 – Text Ad Revenue

At $.07 and selling only 25% of the available inventory, text ads will

generate $2,460.94 in Phase 1.

July August September

Available Text Inventory - 506,250.00 3,037,500.00

HIGH___75% 379,687.50 2,278,125.00

At $.07 CPM $ 26,578.13 $ 159,468.75

At $.05 CPM $ 18,984.38 $ 113,906.25

At $.03 CPM $ 11,390.63 $ 68,343.75

MEDIUM___50% 253,125.00 1,518,750.00

At $.07 CPM $ 17,718.75 $ 106,312.50

At $.05 CPM $ 12,656.25 $ 75,937.50

At $.03 CPM $ 7,593.75 $ 45,562.50

LOW___25% 126,562.50 759,375.00

At $.07 CPM $ 8,859.38 $ 53,156.25

At $.05 CPM $ 6,328.13 $ 37,968.75

At $.03 CPM $ 3,796.88 $ 22,781.25

Phase 1 – WAP Ad RevenueJuly August September

WAP Users - 3,125.00 18,750.00

Available WAP Inventory - 7,500.00 45,000.00

HIGH___75% 5,625.00 33,750.00

At $6 CPM $ 33,750.00 $202,500.00

At $12 CPM $ 67,500.00 $405,000.00

At $20 CPM $112,500.00 $675,000.00

MEDIUM___50% 3,750.00 22,500.00

At $6 CPM $ 22,500.00 $135,000.00

At $12 CPM $ 45,000.00 $270,000.00

At $20 CPM $ 75,000.00 $450,000.00

LOW___25% 1,875.00 11,250.00

At $3 CPM $ 5,625.00 $ 33,750.00

At $12 CPM $ 22,500.00 $135,000.00

At $20 CPM $ 37,500.00 $225,000.00

At $3 and selling only 25% of the available inventory, the WAP ads will

generate $39,375.00 in Phase 1.

Phase 1 – Ringtone Sales

If each band only sells four ringtones a month, ringtone sales will

generate $10,500 in Phase 1.

July August September

16 Ringtones sold, per band - $ 6,000.00 $ 36,000.00

8 Ringtones sold, per band - $ 3,000.00 $ 18,000.00

4 Ringtones sold, per band - $ 15,000.00 $ 9,000.00

Phase 1 – Song Sales

If each band only sells ten songs a month, song sales will generate

$7,000 in Phase 1.

July August September

50 Songs sold, per band - $5,000.00 $ 30,000.00

25 Songs sold, per band - $2,500.00 $ 15,000.00

10 Songs sold, per band - $ 1,000.00 $ 6,000.00

Phase 1 – Income Summary

Beginning Cash Balance $1,000,000

Cash Inflows (Income):

Web AD Sales $7,875

WAP AD Sales $39,375

Text AD Sales $2,460

Ring Tone Sales $10,500

Music Sales $ 7,000

Total income in Phase 1 - $67,210

FarewellThank you very much for your patience during this presentation.

This conference will now be opened for a Q & A session.