This document provides an overview of the sponsors and financial support for Prelude2Cinema's television series "Out of Darkness". It details the businesses and organizations that have financially contributed or provided in-kind support. This includes local restaurants, the Bratenahl Police Department, and private donors. The funding goes towards production costs like paying cast and crew as well as securing airtime for the episodes. Prelude2Cinema is seeking additional sponsors to help fund completion of the full first season.

2. This Program is brought to you by the
Following Sponsors
Financial Sponsors of the TV Show “Out of Darkness” as of March 10, 2006
Village of Bratenahl & Bratenahl Police Department
More supporters of Prelude2Cinema are included within this Annual
Report. If you wish to support Prelude2Cinema or become a Business
Partner, please contact Film Czar Alex P. Michaels at 216-341-0218
or e-mail alexmichaels@prelude2cinema.com

3. 5
Index
This Annual Report will be Available
as an Acrobat PDF File.
Use Bookmarks to Navigate the Report.
This Program is brought to you by the Following Sponsors
Index
Letter to Prelude2Cinema’s Sponsors
Looking to the Future
History
Prelude2Cinema’s Press Room
Selecting Press Clippings
History of the Movies in the Press
The Full Press on Prelude2Cinema
Financial History
Balance Sheet March 10, 2006
Financial and In-kind Support
“What Angels Fear”
“Blood Kiss”
“The M.A.N.”
Knight Studio
Branded Entertainment- funds the TV Series
What is Branded Entertainment?
Is Branded Entertainment the same thing as Product Placement?
Examples of Branded Entertainment in TV
Support for “Out of Darkness”
The TV Series
The Velvet Dog and the Dark Wrap Parties
Scheduling and Markets
The TV Series Yahoo Fan Site
The Future
The need to build Consumers
Future Revenue Streams will Sustain Prelude2Cinema
Internet TV Station
DVD distribution of current movies and TV Series
Business Partners
Prelude2Cinema’s Wiki
Markets and Competition
Financial Projections
Current Financing Needs
Current Financing Needs Chart
Projected Income from Expansion
Prom Forma Statement Year One Expansion
Board & Bios
The Prelude2Cinema Team
Studio Chief: Alex P. Michaels
Movie and TV Library
Unedited Features
Our Place in the Community
Strategic Partners & Support for Prelude2Cinema
Prelude2Cinema Internship Program
To Be Continued

4. Letter to Prelude2Cinema’s Sponsors
I was looking up the origin of the word “thanks.” It comes from the same
root as the word “think.” And I have to say, I don’t think most people think
to say thanks. This Annual Report is my way of thanking the people who
have supported Prelude2Cinema by letting them know how far we have
come. It is also a way to let them know that there is still a lot more to come.
Over the last few years, I have grown and made myself a part of the
business community in Northeast Ohio. While there have been bumps and
missteps along the way, the vision has always been clear. Prelude2Cinema
is a digital movie studio and its focus becomes clearer as technology grows.
The final piece of the puzzle has arrived. Distribution.
Formerly an independent producer was always at the mercy of Hollywood
to distribute its movies. Now, it is possible to create movies and TV shows
and place them directly in front of an audience. It is possible to grow a
library of movies that have been overlooked and create streams of income.
While I plan to touch on that in the Annual Report, I first have to stop and
think and take the time to thank those who have put their faith in
Prelude2Cinema. I owe it to you to make certain the vision is kept clear
and of course to say Thank you.
Alex P. Michaels
Film Czar
Prelude2Cinema
March 10, 2006

5. Looking to the Future
This is the First Annual Report for the Company. It will change as we progress. Much thought was put into whether to do a Business Plan, but I decided that a
Business Plan is for a company that is starting out. Prelude2Cinema is already here. We have a Studio that is expanding. We are building a library of movies.
We have our “flagship” production, our TV Series. Now is not the time to stop. Now is the time to build, to look forward to what is ahead.
Our History provides a template for where we have been. It also gives us a glimpse into the future. The interesting thing about movies is their lifespan. It does
not matter how many years ago (or sometimes decades ago) that a movie or TV show was produced, there is always someone who has not seen it. There is an
audience for everything. The challenge is finding that audience.
Still, it is a worthwhile challenge. By being a dedicated movie studio with a clear vision in Northeast Ohio. Prelude2Cinema will help to spur economic
development by creating a steady flow of productions.
We are proud that we have been featured in the press. We plan to make use of the press to tell our story. We are also proud of our business relationships over
the last few years. We are forming new relationships and strategic partners on an almost weekly basis.
We are forging new ground by being dedicated to creating the infrastructure of film in northeast Ohio.
As the great Bette Davis said, “Fasten your seatbeats, it’s going to be a bumpy night.”
But when day breaks, Prelude2Cinema will still be here in Northeast Ohio and so will the film industry So no matter how bumpy it gets, it will definitely be
worth it.
History
FRANCIS FORD COPPOLA once said there would come a day when some little fat girl from Ohio could borrow her dad's camcorder and become the next Mozart of moviemaking.
I remember the first time I saw colour TV. I think I was about 4. The family had went out except for my Dad and when we got back, there was a brand new TV
set in the living room. “The Old Man and the Sea” was on. The ocean was so blue, I walked over and tried to put my hand in it.
That memory is the same way I felt in 1999 when I had just won my Emmy and I had money from private investors. I had shot in 16mm film before and I was
convinced that film was the only medium to shoot in. I picked up a magazine and read that the Sundance Film Festival was accepting digital movies. Canon had
introduced the XL1 and indie filmmakers were creating movies with it.
I always believed that if you were going to “recreate” Hollywood, you had to do it with the Studio System. Being able to completely control a movie from
production to distribution was the only way to truly reach an audience and to be profitable and sustainable. Of course shooting in film was way too costly. It still
is. Yet, digital offered the possibility that my vision of creating “Hollywood” in Cleveland was possible.

6. Prelude2Cinema’s Press Room

9. Selecting Press Clippings
It was a hard decision to make concerning what press articles to place in here. This is really
just the tip of the iceberg when it comes to press. Like any Movie Studio, Prelude2Cinema
works diligently to promote itself. At the recent party for the TV Show, we had Jay Rossi
interviewing the cast and a reporter from the City News talking to the cast as well.
The company looks forward to continuing its relationship with the press as it promotes the
Studio, the TV Series, its library of movies and other productions.
History of the Movies in the Press
“Blood Kiss” was the first digital feature from Prelude2Cinema. It had its world premiere at
the first York Film Festival in the United Kingdom. The U.S. Premiere was at the Ohio
Independent Film Festival.
This feature was followed by a short movie named “The IT girl.” Both movies are listed on
the Internet Movie Database.
http://www.imdb.com/title/tt0353247/
http://www.imdb.com/title/tt0362772/
“It girl” has screened in London at the World’s Smallest Film Festival New York City,
Clermont France, and other places. The movie is part of compilation of movies and received
3 ½ stars out of five from Film Threat.
After “Blood Kiss,” two movies were shot back to back, but not edited due to a lack of funds. It was then that Prelude2Cinema decided to reorganize and
structure a new production built on a business model that would allow itself to be self sustaining.
That production turned out to be the television series “Out of Darkness.”

12. From Crain’s Cleveland Business News
Prelude2Cinema’s phone number is now 216-341-0218
The new e-mail is alexmichaels@prelude2cinema.com

13. The Full Press on Prelude2Cinema
This Annual Report would be over a hundred pages, if we included the every single press article on Prelude2Cinema. Throughout the Annual Report, we will
include more press pieces related to our productions.
For any full copy of the Press Articles here, please contact
Prelude2Cinema at alexmichaels@prelude2cinema.com or at 216-341-0218

14. Financial History
Balance Sheet March 10, 2006
Assets
Current Assets
Cash And Cash Equivalents 100
Short Term Investments 0
Net Receivables 0
Inventory (Movies, TV Series & Scripts) 25,000
Other Current Assets
Total Current Assets $25,100
Long Term Investments 0
Studio 30,000
Equipment 15,000
Goodwill 10,000
Intangible Assets 0
Total Assets $80,100
Liabilities
Current Liabilities
Accounts Payable (Speaker Fees) 200
Short/Current Long Term Debt 0
Other Current Liabilities 0
Total Current Liabilities 200
Debt (Dish Network and TV Cast) 2,500
Other Liabilities 0
Deferred Long Term Liability Charges 0
Total Liabilities $2,500
Net Assets 77,600

15. Financial and In-kind Support
Since the website Prelude2Cinema premiered in 1999 and it created its first digital feature, the company has received financial and a wealth of in-kind support.
The best way to list this is to break it down by the productions.
“What Angels Fear”
• Received $1,000 as the winner of the Dreambuilder’s Celebration award. The script for “What Angels Fear”
• Loan from private investors for $4,200 for Canon XL1 digital camera. Repaid loan one year later.
• In January 2005, the TV Series aired nationally on PAX TV and Prelude2Cinema received royalties of $100.
The attention Prelude2Cinema has received from “What Angels Fear” and the Emmy win is still part of
the company today.

16. “Blood Kiss”
The first digital feature received a lot of in-kind support which made its production
possible. All the cast and crew donated their time for a percentage of future profits.
As a group, the cast and crew retain 40% interest in the movie.
A total of 7 crew members worked over 18 days with a cast of approx. 50 persons to
create the movie.
Locations were provided for gratis as well.
During the production, Prelude2Cinema purchased its nonlinear computer editing
system. It also attained the necessary software to edit the movie and add special
effects.
Prelude2Cinema also established a Studio Store at Café Press for all its movies. It plans
later to work with a third party on merchandise for each production.

17. “The M.A.N.”
Cleveland Public Theater chose Alex P. Michaels to be part of their Big Box Series.
• Prelude2Cinema received $300 for the production (which was spent on actors and promotion)
• Prelude2Cinema also received 50% of the Box Office ($250)

18. Knight Studio
In 2002, Alex P. Michaels’ family brought a house for his Father to stay in after heart surgery. Alex stays in the
house to watch over him and makes use of the 5 bedroom house for Prelude2Cinema. Upstairs are 4 bedrooms. One
bedroom is where the Internet and editing computers are stored. Currently there are 4 computers used for various
productions. The Editor for the TV Series, Tim Franke works on a laptop and uses external hard drives for the video
footage.
Behind the house is a converted garage that is over
600 square feet. It is used for green screen footage.
Here it is below doubling as the set for the
presentation of “The M.A.N.” at CPT.
Two other bedrooms in the house are used for the
bedroom of the lead cop Angie and Prosecutor Raft in
the TV Series “Out of Darkness”.
While Prelude2Cinema intends to continue to utilize Knight Studio, it is seeking to expand the Studio for continued
production of the TV Series and other movie productions. The company plans to secure a larger studio sometime
this year.
http://prelude2cinema.com/knightstudio.htm
Knight Studio has shot scenes for a children’s TV show called “Natural Bridges” and a Civil War reenactment. Once
Knight Studio expands, Prelude2Cinema expects to produce other independent movie and TV projects by third
parties during 2006 and receive funds that will be used for the studio expansion.

19. Branded Entertainment- funds the TV Series
Prelude2Cinema is using “Branded Entertainment” to fund the TV Series. So far it has received over $1,900 from
local businesses who were integrated into the series. The Series has also received in-kind support as well.
What is Branded Entertainment?
It is the practice of tying a brand name to an entertainment property with seamless integration and a natural fit.
Is Branded Entertainment the same thing as Product
Placement?
They are similar.
PRODUCT PLACEMENT is the process, which integrates an advertiser's product into movies and TV shows for
clear, on-screen visibility. It is part of the rapidly expanding entertainment industry reaching millions of people daily
through movies, television, and video. (Source: MMI Product Placement)
Examples of Branded Entertainment in TV
While like Product Placement, Branded Entertainment involves having products and businesses appear in television
shows, branded entertainment takes it a step further. The Business lends financial support to the series and its
business is woven into a storyline.
“HBO's "Sex and the City" stirred Absolut Vodka into the
story line. Levis were the focus of an episode of NBC's "The
Apprentice." Ford's new Mustang is key to the plot on Fox's
"The O.C." The WB is selling "preferred partnerships" to
sponsors who want to place their products into shows. Procter
& Gamble bought into "What I Like About You"; Verizon
took "Smallville." A P&G shampoo was the subject of a story
in "What I Like About You," with two characters competing to
appear in an Herbal Essences ad. The actual ad ran during the
next break.”
From the Denver Post
"When ads are the TV stars "
By Joanne Ostrow
An excellent website about the business of Branded Entertainment that
covers the new ways movie and TV series are benefiting financially and
artistically can be found at http://www.insidebrandedentertainment.com/

20. Support for “Out of Darkness”
Shot on location at
Lucy's Sweet Surrender
at 12516 Buckeye Road
Cleveland, OH 44120
Michael Feigenbaum (real life owner of Lucy’s) gets some
pastries while Detective Avon goes over reports
Besides being a regular location in the TV
Series, Lucy’s has provided $750 which went to
paying cast and securing airtime for the Series.
A scene shot at the Velvet Dog. The Velvet Dog
has been the location for Six Fan parties for the
TV series. The Velvet Dog provided free food
for the parties and clips from the TV Series were
screened on 3 large video screens. The Velvet
Dog has invested $150 toward the TV Series
The money went for the application for the
Fiscal Sponsor Agent, so now Prelude2Cinema
can accept tax-deductible donations for the
Studio.
Director (Alex P. Michaels) getting ready to
shoot a scene at Italian Restaurant and Sponsor
Massimo da Milano. Massimo’s was the location
for a scene in the TV Series and has invested
$1,000. The money went to paying for cast and
securing airtime.
Prelude2Cinema has also received additional sponsorships of $1,000 last year for the Series. Four episodes have
been shot. Two have been edited. A fifth episode is currently shooting. The entire first season will be 13 episodes.
Prelude2Cinema is currently seeking additional Sponsors for the TV Series.

21. Wright State Student Intern Ryan A. Heilman and actor Joseph Primes in Bratenahl Police Dept. and Jail
Financial Sponsors include:
Massimo da Milano
Lucy’s Sweet Surrender
The Velvet Dog
Private Donors: Rosa Huffman, Sylvester Dunlap
In-kind Sponsors include:
• Editor Tim Franke worked for free on the first
episode. Tim is continuing to work on the TV
Series and Prelude2Cinema has been able to
secure some private funds to pay for his
continued work. Tim has also finished editing
episode #2 and is at work on Dark #3.
• Infinite Butterfly Studios created the special
effects for episode one for free.
Prelude2Cinema is working on securing funds to include their working Dark #2 and other episodes
• Police Technical Consultants: Bratenahl Police Chief Paul Falzone & Police Detective Michael A. Savioli
have been working for free as consultants on the series. Recently Earl Brantley who was a CMHA police
officer and served in the military is working as an actor and consultant on the series.
• Locations: Whiskey Island Marina, Lucy’s Sweet Surrender, Massimo da Milano, The Velvet Dog,
Bratenahl Police Department and Court
• Other resources: City of Willoughby and Police Department and Lost Nation Airport, City of Bratenahl,
Wendell Teal (computer hard drives and musical score) Eric Whited (theme music and other music),
Anthony Quagliato (marketing and promotion)
Prelude2Cinema is still in production with “Out of Darkness,” so additional financial support and other resources are being added to the
production.
Intern Becky DeNoewer in production meeting, then directing Episode Four of “Out of Darkness.”
Special effect created by Infinite Butterfly Studios for “Out of Darkness.”

22. The TV Series
“Out of Darkness” was created to be a TV Series that Prelude2Cinema
could produce using its limited resources and also allow the company to
gather sponsors while at the same time guaranteeing distribution. . The
series would use a model of product placement known as “Branded
Entertainment.” While the term “Branded Entertainment” may be new, the
practice of businesses supporting television shows was always present.
Currently Pepsi has lent its name and financial support to Pepsi Smash, a
one-hour show featuring performances from today's hot bands and musical
acts. This is no different than the first television hit show, The Texaco Star
Theater, a comedy-variety hosted by Milton Berle (which ran from 1948 to
1956 and was in 86.7% of all TV households). Also, the very reason “soap
operas” are called “soap operas” is because soap companies originally
sponsored them.
From the Summer 2005 Shaker Connection
The Velvet Dog and the Dark Wrap Parties
From the October 15, 2004 Cleveland Plain Dealer
The first party for the TV Series was held at the Velvet Dog August 27th
,
2004. Alex P. Michaels had met the manager Tino Roncone of the Velvet
Dog at a Ryze business meeting some months before the screening. Tino
liked the concept of the show and managed to get the owners to invest some
money into the series. The Velvet Dog has also been host to Six parties
named “Dark Wrap parties” to promote the TV Series. At these parties, the
Velvet Dog has provided no cost appetizers and a cash bar. Each event over
the last few years has had about 40 to 60 persons. The TV Series has also
shot two scenes at the Velvet Dog.

23. Prelude2Cinema expects to continue hosting “Dark Wrap” parties at the
Velvet Dog. The most recent Dark Wrap party was held March 9th
, 2006
From the March 3rd
, 2006 Cleveland Plain Dealer
Scheduling and Markets
It has been quite a balancing act to jump between the creative and the
business side of Prelude2Cinema. Both sides have a priority. With the TV
Series, casting changes were made for creative reasons which pushed
shooting back. At the same time, Prelude2Cinema was working on
gathering sponsors who would fit into the TV series. The TV series is
shooing episode five of a planned 13 season first episode. The storylines
have been refined so certain members of the cast are flexible. A new
director Rufus Malone is shaping the series now. Alex P. Michaels still acts
as Executive Producer and has a role as the Prosecutor. The first four
episodes have been providing a backdrop for a continuing storyline that will
allow the series to move forward. Real life Police detective Michael Savioli
and Chief of Bratenahl Police Paul Falzone have been very valuable
consultants on police procedure.
Prelude2Cinema expects to add new corporate sponsors and bring aboard
partners that will allow the company to finish the 13 episodes in 2006 and
place the series in a number of new markets. The Series first episode is
online at Google Video and it can also be seen to an audience of 130,000
at Kent University and in Portage County, Ohio. Prelude2Cinema
intends to air the first episode in various markets and work on securing
more markets for the series in 2006.
Police Consultant and real Detective Michael Savioli.
Ada Carolina Ortiz as Detective Teresa Marie de los Angelos (a.k.a..
Angie.) The special effects behind her were created by Infinite Butterfly
Studios.

24. The TV Series Yahoo Fan Site
To promote the TV Series established a Yahoo fan site. The group has over
200 members and is growing.
Prelude2Cinema plans to make use of the Internet in promoting all its
productions.
The Future
The need to build Consumers
There is a difference between having consumers and having an audience.
An audience only views the work, but a consumer pays for it.
Prelude2Cinema needs to gather more consumers so it can sustain its
productions. In the case of the TV series, the consumers are the sponsors.
The sponsors allow the audience to watch the TV Series for free.
Prelude2Cinema will work on the premise of gathering more sponsors for
its TV Series so the audience doesn’t have to pay for it. That will mean
providing more opportunities in the Series for branded entertainment. This
will have to be done very carefully so the series does not become one long
commercial.
Future Revenue Streams will Sustain
Prelude2Cinema
The future for Prelude2Cinema lies in building a brand name for it’s
productions and utilizing innovative techniques and technology to get
productions out across the globe. Below are just a few of the methods the
company may work on in the coming years. And of course there are new
techniques and technology not invented yet, that we hope to use as well. in
order to sustain productions, we will need to focus on gather consumers.
Internet TV Station
Prelude2Cinema intends to build a library of movies and programs that can
be broadcast exclusively over the Internet. As broadband becomes more
accessible, the company will explore this method of distribution.
DVD distribution of current movies and TV Series
Prelude2Cinema intends to acquire movies from third parties and take the
productions it currently owns and repackage those for distribution on DVD.
Each DVD will include extra behind the scenes footage.

25. Business Partners
Prelude2Cinema intends to gather business partners who make a financial
commitment to the company and also add their skills in shaping the vision
and future revenue streams. These partnerships will vary in terms of
financial commitment and responsibility. Each partnership will be weighed
to see it does not interfere with the relationships Prelude2Cinema currently
has.
Prelude2Cinema’s Wiki
The Company is always growing. It recently established a Wiki to chart the
growth of the Studio Expansion.
Even so, the Wiki will not cover all the changes as Prelude2Cinema grows.
Being a “technology” company, we are always striving to keep ahead of the
curve. We are always researching and looking for new opportunities.
Years ago, there was a commercial where a guy bought the latest model of a
computer and while he was driving home. He saw they were putting up
another model that made his computer obsolete. While that is a bit of an
extreme, anyone who works in technology knows it is pretty close to the
truth.
While this Annual report includes our plans for the future, as soon as it is
done, another opportunity will present itself and things will change. We
cannot say what all the changes will be especially as we add new partners
and form strategic alliances that will help us to grow, but we can say that
we will always be learning and we will always be growing.
The Wiki is at http://prelude2cinema.pbwiki.com/
Markets and Competition
While on some level, it is true that Prelude2Cinema is in competition with
all the major Hollywood studios, it is often true that Hollywood neglects
audiences because of the high cost of movies. Prelude2Cinema’s motto is
“Movies That Make You Think.” The Company will produce and acquire
movies and TV series that appeal to people looking for independent artistic
and genre inspired works. The description of our movies in this Annual
Report give a sample of the types of works we will produce and market.
The market is large enough to support the cost of these productions and to
have the company expect a comfortable profit in the years to come. Profit
margins will grow larger as Prelude2Cinema brands itself and starts to build
a steady flow of movies and TV productions..

26. Financial Projections
Current Financing Needs
Prelude2Cinema is working on bringing aboard Business Partners who will add finances and resources to the Company to fund the Studio expansion. Listed
below is our current financing needs which covers all the essential salaries and operations for a year of expansion. By focusing on strengthening our relationship
with the business community, we expect to reach financial and resources to allow us to make an impact in the economic development of the region and have a
consistent flow of productions and be able to market those productions. Any financing Prelude2Cinema receives will go toward building its movie and TV
library.
Item/ Staff member Annual Details/ Duties Monthly
Film Czar 24,000
Oversees all studio productions and is responsible for all departments.
2,000
Public Relations & Marketing 24,000
Oversees the press sent out about the studio productions and works on
creating an image for incoming productions. Creates marketing
campaigns to constantly keep the Studio in the public eye. 2,000
Chief Financial Officer 12,000
Responsible for all financial transactions and accounting duties for the
Studio. Studio may have accountant on retainer for this position. 1,000
Web Department 12,000
Responsible for promoting the studio using the Internet and also
helping to create web based productions. 1,000
TV Series Production 15,000
The TV Series "Out of Darkness' will utilize Cleveland talent and will
be used to promote the studio. This amount includes the airtime for
those episodes in local and national markets. Five episodes are
produced and aired. Businesses will also purchase sponsorship in the
TV Series and other productions from the Studio. 3 episodes at $5K
each 5,000
Movie Production and Sales 15,000
Purchase third party movies and sell those on DVD using the Internet
and grass roots marketing campaigns. Total amount $15K 15,000
Studio Rental 18,000
Studio may be shared space and certain productions will be shot on
location. 1,500
Equipment purchase 15,000
High Definition video production and editing equipment.Total amount
$15K 15,000
Operations 6,000Non- studio expenses such as phones, custodial, and security. 500
Total 141,000

27. Current Financing Needs Chart
Knight Studio Movie Incubator Expansion
Equipment purchase
11%
Studio Rental
13%
Movie Production and Sales
11%
TV Series Production
11%
Web Department
9%
Chief Financial Officer
9%
Public Relations & Marketing
16%
Film Czar
16%
Operations
4%
Film Czar
Public Relations & Marketing
Chief Financial Officer
Web Department
TV Series Production
Movie Production and Sales
Studio Rental
Equipment purchase
Operations

28. Projected Income from Expansion
Income
TV Series sponsors Per 30 second spotSpots availableTotal Total EpisodesMonthly income Total income
6 min.per episode 250 12 3,000 13 6,000 39,000
Production 4 episodes every 2 months
Movies Projected Unit CostNo. of Units Selling Price Gross Sales Net Sales
DVD Cost 2 2,500 10 25,000 20,000
3 Movies released Year One Total Movies 75,000 60,000
Studio Rental Income Cost for space Day rented Total Income
Rent min 3 x per month 500 36 18,000
Production Services No. Clients Total Income
Scriptwriting 2,000 12 24,000
Casting 500 12 6,000
Production Services 2,500 12 30,000
Total Monthly Services 5,000 Total Annual Income 60,000
Income
Production Services 25,000
Sponsors TV Series 39,000
Movie Sales 60,000

29. Prom Forma Statement Year One Expansion
PRO FORMA STATEMENT
Quarter First Second Third Fourth
Month Month Month Month Month Month Month Month Month Month Month Month Year End Totals
Item 1 2 3 4 5 6 7 8 9 10 11 12 Item
INCOME INCOME
Production Services 5,000 5,000 5,000 5,000 5,000 25,000 Production Services
Sponsors TV
Series
6,000 6,000 6,000 6,000 6,000 6,000 3,000 39,000
Sponsors TV
Series
Movie Sales 20,000 20,000 20,000 60,000 Movie Sales
Interest
(100,000)
333 333 333 333 333 333 333 333 333 333 333 333 4,000
Total Income 6,333 6,333 6,333 11,333 11,333 31,333 8,333 5,333 20,333 333 333 20,333 128,000 Total
Income
EXPENSES
Studio Cost
Studio Cost- Rental (6,500 sq ft) 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Studio Cost
Depreciation (equipment $15K) 125 125 125 125 125 125 125 125 125 125 125 125 1,500 Equipment:
TOTAL STUDIO COSTS 1,625 1,625 1,625 1,625 1,625 1,625 1,625 1,625 1,625 1,625 1,625 1,625 19,500 TOTAL STUDIO COSTS
Productions Cost Productions Cost
TV Series 5,000 5,000 5,000 15,000 TV Series
Movies -purchase & marketed 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 15,000 Movies -purchase & marketed
TOTAL PRODUCTIONS COST
6,500 6,500 6,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 0 0 30,000
TOTAL PRODUCTIONS
COST
Operations cost Operations cost
Telephone 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Telephone
Utilities 300 300 300 300 300 300 300 300 300 300 300 300 3,600 Utilities
Insurance 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Insurance
TOTAL STUDIO OPERATIONS 500 500 500 500 500 500 500 500 500 500 500 500 6,000 TOTAL STUDIO
OPERATIONS
SALARIES SALARIES
KEY STAFF KEY STAFF
Film Czar 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000 Film Czar
Public Relations & Marketing 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000 Public Relations & Marketing
Chief Financial Officer 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Chief Financial Officer
TOTAL STAFF SALARIES 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000 TOTAL STAFF SALARIES
Benefits (20%) 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Benefits

30. Quarter First Second Third Fourth
Month Month Month Month Month Month Month Month Month Month Month Month Year End Totals
Item 1 2 3 4 5 6 7 8 9 10 11 12 Item
TOTAL SALARIES & BENEFITS 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 72,000
TOTAL SALARIES &
BENEFITS
SUPPLIES SUPPLIES
Office Supplies 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Office Supplies
Computer Supplies 150 150 150 150 150 150 150 150 150 150 150 150 1,800 Computer Supplies
TOTAL SUPPLIES 250 250 250 250 250 250 250 250 250 250 250 250 3,000 TOTAL SUPPLIES
TOTAL EXPENSES Before Taxes 14,875 14,875 14,875 9,875 9,875 9,875 9,875 9,875 9,875 9,875 8,375 8,375 130,500 TOTAL EXPENSES
Net Before Tax (8,542) (8,542) (8,542) 1,458 1,458 21,458 (1,542) (4,542) 10,458 (9,542) (8,042) 11,958 (2,500) Net before Tax
TAXES (28%) 0 6,825 1,225 (8,050) 0 Tax
NET PROFIT (LOSS) (8,542) (8,542) (8,542) 1,458 1,458 14,633 (1,542) (4,542) 9,233 (9,542) (8,042) 20,008 (2,500) NET PROFIT (LOSS)

31. Board & Bios
The Prelude2Cinema Team
The Prelude2Cinema Team will be responsible for crafting the Studio.
Studio Chief: Alex P. Michaels
Emmy winning writer and acclaimed director
Alex P. Michaels has studied screenwriting at
Stanford University, filmmaking at DeAnza
College in California, and acted and directed on
the stages of the Karamu House and the
Cleveland Public Theatre. His digital movie
company Prelude2Cinema has shown movies in
New York, France, the U.K. and Cleveland,
Ohio. He remains dedicated to recreating the
Hollywood studio system in Cleveland, Ohio. Alex has created the TV Series
“Out of Darkness,” which will be the first production from the Studio. Mr.
Michaels will head the Studio until he finds a Studio Chief for the Studio or
a Co-Studio Chief. For more info on Mr. Michaels, go to
www.prelude2cinema.com/alexmichaels.htm
Board Member/ Financial Advisor: Theron Cyrus
Theron Cyrus is a Financial Advisor with the
Global Private Client Branch Office in Cleveland,
Ohio. He assists a select group of affluent clients
in investment management and tax, estate and
wealth transfer planning. Drawing on his
experience and Merrill Lynch's global resources,
Theron develops personalized, strategic solutions
to address the complex needs of individuals with
substantial wealth. Together with specialists in
different areas of expertise, Theron offers clients a comprehensive range of
services, including: discretionary porfolio management; stock option
analysis and sophisticated retirement planning; hedging and monetization of
concentrated equity positions; life insurance analysis and funding; and a full
complement of wealth preservation and transfer services. Prior to joining
Merrill Lynch Theron has previous experience as an advisor. He holds
various board positions with civic organizations in Cleveland.
Board Member/ Sponsor TV Series Michael Feigenbaum
Born in Cleveland Ohio, Michael is the owner of
Lucy’s Sweet Surrender. He believes in the
community and supports other small businesses.
He has financially supported the TV Series “Out
of Darkness.” His bakery serves as the location
where the main cops congregate. Michael is a
graduate of Shaker Heights. High School, the
New College of California. B.A., The California
Culinary Academy, (professional chef degree).
He was recently inducted into Shaker Heights. Alumni Hall of Fame 2005

32. Movie and TV Library
A Movie Studio needs a Library of Movies and other productions to market. Prelude2Cinema is working on building a Library and will soon have the tools in
place to properly market all of its productions. The Studio also plans to acquire other movies from third parties.
Prelude2Cinema plans to continue focusing on its TV Series since that production has managed to secure consumers (sponsors). It does plan to build its movie
library and release the following features in limited release. As Prelude2Cinema builds its distribution pipeline, it will be able to control when and how audience
across the globe see its movies. With an international distribution pipeline, Prelude2Cinema will be able to find the right audience for its movies, even if that
audience is on the other side of the world.
Movies: “Blood Kiss: Soul of a Woman”
Synopsis
Beth thinks she has everything under control. On her 30th
birthday, she decides to be bold and take what she
wants. Yet things go wrong when her ex-lover returns offering her a chance at a darker life where one survives
off the souls of others.
Length Approx. 80 minutes
This movie will be re-released and a proper audience targeted once Prelude2Cinema has the resources to do
so.

33. Unedited Features
Both features need to be edited, but with proper marketing should
attain cult status and a good audience. Although Prelude2Cinema
will be focusing on the TV Series for right now, it does intend to
place their movies into release once it has funds for editors. And
new computer editing systems.

34. Our Place in the Community
“No Man is an Island.”
John Donne
February 1st
, 2006, Alex P. Michaels lead a civic forum at Myers University
on creating the film industry in Northeast Ohio. Thanks to the help of I-
open, a group that spurs open source economic development, Alex was able
to reach out to the community. Prelude2Cinema is focused on building a
strong tie with the business community and bring aboard organizations and
community leaders to fund the Studio expansion. The Studio will create
numerous jobs for each production and firmly establish the film industry in
the region.
This goal can only be achieved by remaining focused on those who are
positive in the community. Prelude2Cinema has formed a number of
strategic partnerships to accomplish this goal.
Strategic Partners & Support for Prelude2Cinema
Prelude2Cinema is receiving economic development assistance from the
following organizations in expanding the Studio.
CAAO (pronounced K-O) is an umbrella consulting organization for
the black professional organizations of Northeast Ohio. CAAO
serves as a conduit and referral source to existing resources for
entrepreneurial development, professional development, and
leadership empowerment for its member organizations and their
members.
Alex is a member of CAAO and they have been very supporting in
connecting Prelude2Cinema to the necessary contacts it needs to expand the
Studio.
I-Open (The Institute for Open Economic Networks), accelerates innovation
and economic transformation in local and regional economies. I-Open's
approach is founded on open source development, an effective innovation
engine developed in the software industry. Open source development is
based on voluntary communities of people contributing to common
projects. I-Open hosts civic forums to build open networks and stimulate
innovation and entrepreneurship.
On February 1st
, 2006, Alex P. Michaels lead a civic form on creating the
Film Industry at Myers University.
Networked Creative Industries Build Innovating Regions
Alex Michaels (Prelude2Cinema) lead our forum this evening
begining with a call to action: we can benefit by working
together to strengthen our NEO film industry. Alex suggested
we place renewed value on some important behaviors: the
value of being adaptable, having a clear vision that is inclusive
of others and sharing resources with others so everyone can
benefit. The Knight film incubator initiative will be a co-
operative effort everyone will benefit from.
The full comments can be found at the link to realneo.us at
Prelude2Cinema’s wiki at
http://prelude2cinema.pbwiki.com/

35. In addition to our TV Series sponsors, and Board Members, there are others who are supporting Prelude2Cinema.
Name/ Job Title
In alphabetical order
Support for Prelude2Cinema
Intended support for KSMI
Anthony Houston- Director of
Empowerment Zone
We are discussing with Anthony potential city space that could be used for the
studio and also tapping into economic development money. He is very
supportive of K.SM.I.
Anthony Quagliata
AGA Marketing
Anthony is president of a marketing company and will be working with
K.S.MI. on its marketing of the studio. His clients have included Zeppe’s
Pizza, CSU, The Cleveland Cavaliers, and others.
Brendan Malloy
Owner
Infinite Butterfly Studios
Brendan created the special effects for the TV Series “Out of Darkness.”
Prelude2Cinema will be working with him to provide effects for incoming
productions who use K.SM.I.
Dale and Shawn Tufts
Corporate Executive Housing
Dale and Shawn have a mansion named Quentin Manor in Novelty Ohio that
Prelude2Cinema can use as a shooting location. The mansion will also be
available as lodging for incoming producers.
Independent Pictures Creators of the Ohio Independent Film Festival, this organization is acting as
the fiscal agent for K.SM.I. Prelude2Cinema is able to accept tax- deductible
donations for the studio thanks to Independent Pictures.
Joseph Marshall Parnell
Librarian Assistant Grade 1.
Ohio Rep. for the Screen Actors
Guild
Board member Prelude2Cinema
Joseph has worked in the business department of the Cleveland Public Library
for over 30 years. He has been helpful in forming the business structure of
Prelude2Cinema. He is also a writer and Emmy winning actor. Joseph will
help to create a strategy to recognize and attract incoming productions for
K.S.M.I.
Peter Lawson Jones
County Commissioner
We are currently talking to Peter about involving the city in the studio since it
would add to the Mayor’s expected economic development goals. Both
Anthony Houston (Director of the Empowerment Zone) and Peter are very
supportive and although we don’t have an agreement with the city of
Cleveland about their involvement, we are diligently pursuing it. Alex P.
Michaels has a meeting in January 2006 with the Commissioner.
Thomas Mulready
Cool Cleveland
Thomas is very supportive of KS.M.I. and has helped to promote it in Cool
Cleveland. We expect to continue our relationship with Thomas and other
members of the press in spreading the word about KS.M.I. The press will
help to gather clients to KS.M.I. Thanks to a piece Thomas did in Cool
Cleveland, we gathered the first sponsor for our TV Series.

36. Prelude2Cinema Internship Program
Prelude2Cinema launched
its internship program and
has had nearly a dozen
individuals and students
working on the production
for “Out of Darkness” and
assisting the Film Czar with
the business details of the
Studio. Interns have come
from Wright State
University, Cleveland State
University, Bowling Green
University, Avon Lake High
School, and Kenyon
University.
Prelude2Cinema has used http://www.clevelandintern.net to gather interns.
Also students have contacted the company through an Internet search for
opportunities as well.
One of the interns arranged for Kenyon College to pay for Alex to speak at
the college.
Prelude2Cinema expects to continue its internship program during the
Studio expansion and later bring aboard certain interns who perform well as
company employees.

37. To Be Continued
It has been the best of times and the worst of times, but it has been fun. Now the real work lies ahead and with our partners, we are ready to continue. As the old
song goes, “The Best is Yet to Come.”
Prelude2Cinema
“Movies That Make You Think.”
www.prelude2cinema.com