XR Magic Xchange

OPPORTUNITY STUDIOS Diverse Voices, Powerful Stories, Authentic Connections, Professional Media www.opportunitystudios.com

Opportunity Pictures Opportunity Productions

PRESENTATION STRUCTURE 1.

PROJECT OVERVIEW (tell them what you’re going to tell them)

2.

PROJECT DETAILS (Tell them the story - with extra details)

3.

PROJECT BENEFITS (Tell them what you told them)

4.

PROJECT PLAN - (financials and timeline, floor plans, property locations )

5.

APPENDIX - (Additional info, research and project detail)

1.Project Overview

WHY? ●

Cultural Landscape: Hollywood resurgence / lots of opportunity / benefits still tend to be disproportionate

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Timing is now: Increasingly urgent need for diversity of voices / Opportunity Zone / Lucas Museum of Narrative Arts

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Convergence: Right place, right time, right people, right financial incentives, right plan, right partners

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Impact: A unique chance to leverage our networks and expertise, cooperate to have fun and make a difference, and to create a sustainable model for social entrepreneurship in the media production and distribution business

WHAT ●

Opportunity Studios - a qualified Opportunity Zone investment and business comprised of two complimentary divisions ○

Opportunity Productions - media production facilities and equipment rentals (real property - low risk / low return potential)

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Opportunity Pictures - content development & creation (intellectual and media property - higher risk / higher return potential )

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Partner Network of associated corporate, institutional and government organizations for maximum social impact and community benefit

HOW? ●

Invest in real-property to establish media production facilities - stages, offices, equipment, post-suites, location vehicles ○

Revenue: Production rentals for media companies, corporate, events, and community partners

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Independent content development and production for diverse, underrepresented voices and talent ○

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Revenue: production & distribution fees, licensing fees, sales.

Access to training and workforce development bringing together clients, educational institutions and local community groups ○

Revenue: grants, program development and management fees, training fees and student tuitionActivate over next 31 months

WHO? ○

Leadership Team

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Proven Management Organization: XISM Company

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Advisors & Supporters

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Ecosystem of partners

WHEN? ●

Establish OZ Fund before end of 2019

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Activate over next 31 months ■ Opportunity Zones ■ Federal Tax Incentive ■ State Tax Incentive ■ Leads to Tax free investments with highly sustainable returns

NEEDS? ●

Partnership & Alliances

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Advisory support

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Investment dollars

2. Project Details

WHY? ●

Cultural Landscape: Hollywood resurgence / lots of opportunity / benefits still tend to be disproportionate

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Timing is now: Increasingly urgent need for diversity of voices / Opportunity Zone / Lucas Museum of Narrative Arts

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Convergence: Right place, right time, right people, right financial incentives, right plan, right partners

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Impact: A unique chance to leverage our networks and expertise, cooperate to have fun and make a difference, and to create a sustainable model for social entrepreneurship in the media production and distribution business

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A Healthy Hollywood fuels a Vibrant LA Hollywood Exploding in an exciting way - (Return production, more biz revenue across the industry) Hollywood Exclusivity Barrier… (generally & even tougher for the traditionally underrepresented groups) Rare Opportunity For Access! - Opportunity Zones

CULTURAL LANDSCAPE

HOLLYWOOD RESURGENCE ●

A HEALTHY HOLLYWOOD FUELS A VIBRANT LA ○ It is commonly known that as goes Hollywood goes so goes LA. A healthy Hollywood media economy is key to sustaining the greater Los Angeles community. ○

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Lots of opportunity ○

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Record revenues across almost every industry sector

An exponential need for more support service enterprises

Benefits still seem to be disproportionate

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Access in Hollywood has always been unequal And it still is - for technicians, talent and creatives on every level

OUTLINE & NOTES Intro Hollywood is experiencing a resurgence There is lots of opportunity But the opportunities and returns still tend to be disproportionate We have an opportunity to take advantage of the exponential growth that the media industry in Hollywood AND at in the same time make enormous strides to narrowing the gap between the traditional benefactors of industry growth and those that have been systematically unable to make the leap that access gap.

WHY LA? Many parts of DTLA lie within the designated Opportunity Zone, and the pace of real estate development is already red hot: ●

The California State Production Program rebates along with ever growing streaming media production have triggered a resurgence in LA media production. It has caused a boom in sound stage bookings. This trend will continue to increase creating a need for more studio space. Due to the lack of availability close to the center of the “Hollywood Zone,” there is a perfect opportunity for studio development within the Opportunity Zone which still lies within the 30 mi zone making it attractive to production companies.

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Beginning in Q1, 2016 soundstage occupancy among the largest stages in Los Angeles has increased drastically to hover around the 100% occupancy mark.

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Warner Music, Greycroft Partners, Arizona State University, Spotify, Evite, Virgin Hyperloop, Collab, Honey, PetNet, JoyMode, Soylent as well as DC Stages, Willow and Hubble Studios have offices, create local jobs.

South LA has a unique opportunity to leverage Opportunity Zone real estate investments to create a robust innovation hub that includes locals, universities, investors and corporations in the heart of Los Angeles.

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BACK STORY How did we get here?

Systemically, there has been a striking disconnect between America’s diversity and the characters that populate films and tv shows developed and distributed in Hollywood. That inequality extends behind the camera to the broader “industry of Hollywood.” These challenges are rooted in a deep history of media industry structural barriers, policies, institutional practices still shaping and driving Hollywood today.

Where are we now?

Recently, underrepresented groups have posted gains relative to their white counterparts in some key Hollywood employment arenas. Despite those gains gap remains huge in almost every area in front and behind the camera. Film leads, directors, writers, directors of photography to production crews, post production as well as support vendors like equipment rental houses and casting services.

Where can we go together?

We can begin with the now proven numbers that “diversity sells.” The box office sales, tv ratings and online “clicks” bear this out. It is essential to the Hollywood bottom line, so let’s feed what has been a slow moving engine of change by creating opportunities to develop, create, invest in projects and partnerships that seek to transform communities and their narratives to move us all beyond the lingering barriers of our past.

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INDUSTRY EXCLUSIVITY TRADITIONAL BARRIERS TO ENTRY Business in Hollywood is surging but traditionally, there have been roadblocks to entry and access to opportunities for those not already connected to industry insiders.

What’s more?

Access to the industry in general is exponentially more difficult for minorities and women.

Systemically, there has been a striking disconnect between America’s diversity and the characters that populate films and tv shows developed and distributed in Hollywood. That inequality extends behind the camera to the broader “industry of Hollywood.”

Recently, underrepresented groups have posted gains relative to their white counterparts in some key Hollywood employment arenas. Despite those gains gap remains huge in almost every area in front and behind the camera.

INDUSTRY EXCLUSIVITY

TIMING IS NOW

WHY NOW? For South LA, the time for rebirth is now: ●

The media and experience engagement industries offer consumers a reflection of themselves. Historically, howerever, in an increasingly more diverse city, those reflections have remained strikingly monochromatic. South LA (an extension of Hollywood) is the perfect location to be a part of changing the narrative and creating financial and creative opportunities for underrepresented cultures..

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U.S. investors hold over $6 trillion in unrealized capital gains, representing a significant untapped resource that can now be unlocked through Opportunity Zones - but the timeline is limited.

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A perfect storm of new tax relief and California’s State Production Plan rebates have lured producers back from other states. They have created a booking boom for traditional large scale production studio facilities as well as production facilities outside of the geographical center of Hollywood production.

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CURRENT FINANCIAL INCENTIVES Opportunity Zones Federal Tax Incentive State Tax Incentive Leads to Tax free investments with highly sustainable returns

TIMING IS NOW ●

Increasingly urgent need for diversity of voices

TIMING IS NOW ●

Opportunity Zone

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Lucas Museum of Narrative Arts

CONVERGENCE

The Opportunity -

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Recognize the confluence of various factors that are currently creating a unique moment in time especially for those “in the know” both financially and in “the industry” Capitalize on economic and social trends and momentum Take advantage of government stimulus programs Bring together leaders from various LA communities to develop new strategies / entities Extend the benefits of prosperity to adjacent underserved communities Mine creative resources that remain relatively untapped Social venture that self sustains financially, while benefiting the greater good for society and culture

A UNIQUE OPPORTUNITY NOW, TWO PROGRAMS PROVIDE ACCESS

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Recognize the confluence of various factors that are currently creating a unique moment in time especially for those “in the know” both financially and in “the industry” Capitalize on economic and social trends and momentum Take advantage of government stimulus programs

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The California State Production Program rebates along with ever growing streaming media production have triggered a resurgence in LA media production. It has caused a boom in sound stage bookings.

This trend will continue to increase creating a need for more studio space. Due to the lack of availability close to the center of the “Hollywood Zone,” there is a perfect opportunity for studio development within the Opportunity Zone which still lies within the 30 mi zone making it attractive to production companies.

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Beginning in Q1, 2016 soundstage occupancy among the largest stages in Los Angeles has increased drastically to hover around the 100% occupancy mark.

CONVERGENCE ●

Right place

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Right time

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Right people

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Rght financial incentives

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Right plan

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Right partners

IMPACT

IMPACT ●

A unique chance to leverage our networks and expertise

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Cooperate to have fun and make a difference

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Create a sustainable model for social entrepreneurship in the media production and distribution business

WHAT? ●

Opportunity Studios - Opportunity Productions & Opportunity Pictures ○

Opportunity Productions - media production facilities and equipment rentals (real property)

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Opportunity Pictures - content development & creation (intellectual and media property)

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Ecosystem of corporate and institutional partners for maximum social impact and community benefit

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Opportunity Studios (What it is)

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Opportunity Studios (How it works)

OPPORTUNITY STUDIOS

The Solution -

Opportunity Pictures meets Opp Productions Creative and content investments stabilized by real property investments Coalition building / broad ecosystem of people and organizations

OPPORTUNITY STUDIOS OVERVIEW

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Opportunity Pictures meets Opportunity Productions and Creative and content investments stabilized by real property investments Coalition building / broad ecosystem of people and organizations

OPPORTUNITY STUDIOS is a collaborative, conscientious and powerful solution to make Opportunity Zone capital investments synergistically sustain on the media industry in LA communities.

Our mission is to advocate for a two step approach to the Development of the underutilized communities within an LA Opportunity Zone, Investment in real estate and enterprises tied to the extremely lucrative, Hollywood media industry can in turn jumpstart entrepreneurial and economic ventures as well as provide a host of job opportunities, all supporting and sustaining the media production industry within those communities.

Our innovative, two pronged approach works in a virtuous cycle: Opportunity Productions: ● Invest in Real Estate ● Invest in Enterprises Opportunity Pictures: ● Coworking / Production Studio Spaces/Post Production & Audio Post Facilities ● Entrepreneurship Programs ● Training / Media, New Media & Experience Engagement for underrepresented groups

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OPPORTUNITY FOR IMPACT OPPORTUNITY FOR MEDIA INDUSTRY IMPACT Real Estate ● Sound/Green Screen/VR Stages ● Cowork & Production Studio Space ● Events & Conferences ● Theaters (film & theatrical) ● Industry Equipment Rental Assets ● Post Facilities Enterprise ● Industry Vendor Business Support ● Startups ● Social Ventures

Support Desired Policy Outcomes Media Industry job opportunities for underrepresented groups.

Opportunity Productions

Opportunity Studios

Funding for under funded for creative and Industry related businesses

Economic Development ● Industry Workforce Development ● Industry Entrepreneurship Programs ● Jobs for underrepresented people ● Spec Development Partnerships ● Access to Production/Distro Capital ● Access to Distro Channels ● Co-Production Partnerships Community Wellness ● Recycling ● Green production

OUR APPROACH Our approach is grounded in the research around Opportunity Zones and emerging best practices in the production industry. We will deploy an integrated partnership and investment strategy that creates opportunities for growth for investors, community residents and entrepreneurs and the Hollywood industry:

Development with Representation and without Displacement Build to Include - Enhance an existing community of people who also are willing to invest, train, work hard and contribute to the larger Los Angeles centered, global media center. Create a community infrastructure that can pay dividends on investment and generate capital needed to ensure its sustainability for generations to come.

Prosper in Place - Long term residents, typically underrepresented in Hollywood, should be afforded the ability to live out their lives in communities they help build and have that community vitally connected to the larger prosperous Hollywood community and industries Retain Talent - Neighborhoods, traditionally “brain drained” of creative and industrious minds should have a fair opportunity to retain their best and brightest by offering them compelling and lucrative industry professions.

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OUR APPROACH

From FUEL deck See next page

Our approach is grounded in the research around Opportunity Zones and emerging best practices.

We will deploy an integrated partnership and investment strategy that creates authenticity and impact guided by an overarching principle:

Development without Displacement Inclusion Not Gentrification - strike a balance between the community and the capital needed to ensure its sustainability for generations to come.

Prosper in Place - Long term residents should be afforded the ability to live out their lives in communities they help build.

Retain Talent - Neighborhoods should retain their best and brightest by having the opportunities necessary to entice their younger generations to return home after studies.

OPPTY PRODUCTIONS

PRODUCTION FACILITIES & SERVICES

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EXPERIENCE ENGAGEMENT & MEDIA Opportunity Studios aims to be a catalyst for South Los Angeles to develop into a robust global hub for media and new media in areas that will define the future of urban economy and life. A large part of that mission will be to help train and make the industry accessible to underrepresented groups.

We intend to co-create a content creation hub around these areas of production: ● ● ● ● ● ● ● ● ● ● ●

Film/ Broadcast TV/OTT Content: Traditional media production and over the top Streaming Video/New Media: Proprietary content services, Digital adds,/AR/VR/MR, Voice Animation: 2D/3D animation Social Media: Activations, marketing Video Games: Development and production Events: Live events, experiential engagement, brand activations Interactive Media: app and website development Music: Production, distribution, performance New Media: AR/VR/MR, Voice Audio: Podcasts Art: Still photography production

OPPTY PICTURES

PROPRIETARY CONTENT CREATION

TRAINING PROGRAMS & WORKFORCE DEV

OPPORTUNITY STUDIOS STRATEGY

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Build a leadership and advisory team Inspire investors Buy real estate - and do renovations Buy gear Set up shop Create community alliances and programs Create development teams for content Create industry alliances with major producers / studios Tell our story to the world - PR benefits for all Marketing and Sales Create and Distribute Content Win awards

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OPPORTUNITY STUDIOS ECOSYSTEM

HOW? ●

Invest in real-property to establish media production facilities - stages, offices, equipment, post-suites, location vehicles ○

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Independent content development and production for diverse, under-represented voices and talent ○

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Revenue: Production rentals for media companies, corporate, events, and community partners Revenue: production & distribution fees, licensing fees, sales.

Access to training and workforce development bringing together clients, educational institutions and local community groups ○

Revenue: grants, program development and management fees, training fees and student tuitionActivate over next 31 months

OUTLINE & NOTES Opportunity Studios What’s our strategy to get there?

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Social enterprise ( self sustaining business model)

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Collaboration ecosystems - pie chart -

What are opportunity zones & how do they work?

Who & What do we need ?

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OPPORTUNITY STUDIOS ECOSYSTEM

REAL PROPERTY

PRODUCTION FACILITIES

PRODUCTION EQUIPMENT & VEHICLES

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POST PRODUCTION SERVICES Opportunity Studios offers a seamless optical fiber network system that connects the stages, production offices and the Post-Production Facility.

All video image data can be sent straight from the stage to the Post-Production room in an instant.

Every room in the facility is connected to high-speed circuit, allowing for stressfree environment during editing, audio post and sound mixing.

Opportunity Studios Post services will be established as a one-stop shop and is uniquely placed to supply all post services for a feature from digital rushes, stereoscopic alignment, digital intermediate, ADR and sound mixing through to the final completion of all film and digital deliverables for distribution.

Post-production facility features dubbing stages equipped to play both film projection and digital projection.

Sound editing rooms, are accommodating multichannel systems. For video editing rooms, there are Avid and Premiere editing rooms.

After finishing or color-grading, the images can be screened in the theater or dubbing stages immediately through the inter-building optical fiber network and also sent to audio post-production.

INTELLECTUAL & MEDIA PROPERTY

STORY & TALENT DEVELOPMENT

PRODUCTIONS / CO-PRODUCTIONS

LICENSING AND DISTRIBUTION DEALS

COOPERATIVE ECOSYSTEM OPPORTUNITY.ENTERPRISES

From FUEL deck

COOPERATION Significant outcomes will require healthy collaboration between a diverse set of leaders, communities, institutions, businesses, impact investors and organizations.

Opportunity Productions intends to dovetail the interests of long underserved communities with those of a wider community of stakeholders, influencers, and changemakers.

A new set of inclusive relationships between these players will forge a path to social renewal with actions, enterprises, exchanges and friendships.

The Opportunity Studios ecosystem will connect with people where they are to: ● ● ●

Co-create: Creative design Co-produce: Impactful results Co-generate: Shared value

OPPORTUNITY ZONES FEDERAL TAX INCENTIVE PROGRAM

The Tax Cuts and Jobs Act of 2017 included The Opportunity Zone tax incentive, a bipartisan initiative created to revitalize economically distressed communities using long-term private investments rather than taxpayer dollars.

Opportunity Zones are low income census tracts nominated by governors and certified by the U.S. Department of the Treasury into which investors can now put capital to work financing new projects and enterprises in exchange for certain federal capital gains tax advantages. The country now has over 8,700 Opportunity Zones including every state and territory.

A wide range of potential investors are able to defer paying taxes on capital gains income that are invested in “Qualified Opportunity Funds” when invested in state-designated Opportunity Zones. ● ● ● ● ●

Banks and institutional investors that have previously invested in other tax credits Corporations with capital gains exposure – insurance companies, anchor institutions High net worth individuals Partnerships Social impact investors

PROGRAM AT A GLANCE

PROGRAM AT A GLANCE

PROGRAM INCENTIVES

PROGRAM INCENTIVES

INVESTOR INCENTIVES

INVESTOR INCENTIVES

OPPORTUNITY FUNDS

INVESTMENT TIMELINE

ELIGIBLE INVESTMENTS

ELIGIBLE INVESTMENTS This is outdated Used equipment is also included now

CALIFORNIA STATE PRODUCTION PROGRAM STATE TAX INCENTIVE PROGRAM In a major win for the local movie and TV production industries, California has extended the state’s film tax incentive program to 2025, adding five years to the program that has helped stem the tide of runaway productions to states including Georgia, Louisiana and New York.

It includes more tax credits for independent films and additional incentives for projects that hire labor outside the 30-mile radius around Los Angeles.

Filmmakers can recoup as much as 25% of their spending — up to the first $100 million — on crew salaries and other qualified costs, such as building sets. Studios can then use the credits to offset state tax liabilities in California.

TAX INCENTIVES - California From LA TIMES: In a major win for the local movie and TV production industries, California has extended the state’s film tax incentive program to 2025, adding five years to the program that has helped stem the tide of runaway productions to states including Georgia, Louisiana and New York.

The measure, which was part of Gov. Jerry Brown’s $201.4-billion budget plan that was signed Tuesday, will maintain the $330 million in annual tax credits handed out to selected productions. But it includes more tax credits for independent films and additional incentives for projects that hire labor outside the 30-mile radius around Los Angeles.

California raised the annual tax credit amount to $330 million from $100 million in 2016.

Filmmakers can recoup as much as 25% of their spending — up to the first $100 million — on crew salaries and other qualified costs, such as building sets. Star salaries and other so-called above-the-line compensation don’t count. Studios can then use the credits to offset state tax liabilities in California.

TAX INCENTIVES - California

Los Angeles area key to state

The Los Angeles region accounts for a big chunk of the state’s creative economy. It fueled an economic output of $190.3 billion in 2015 and it generated 759,000 direct, indirect and induced jobs for workers who collectively earned $56.9 billion.

Those jobs fueled $8.2 billion in tax revenues tied to property taxes, local and state personal income taxes and sales taxes directly and indirectly generated by the region’s creative industries.

TAX INCENTIVES - Federal https://www.markspaneth.com/insights/category/tax-cuts-jobs-act/tax-reforms-impact-on-the-theater-and-film-industry http://besttaxbreak.net/ https://www.forbes.com/sites/schuylermoore/2018/01/24/how-the-new-tax-bill-benefits-hollywood/#41e27f40643c

(FORBES) 100% Deduction for Certain Property and Films Remarkably, all taxpayers can now deduct 100% of the cost of almost all new or used “Qualified Property” with no limit. The 100% allowance is phased down by 20% per calendar year for property placed in service in taxable years beginning in 2023.

Qualified Property includes almost all tangible personal property if used in a trade or business, but more importantly for Hollywood it now includes films and television shows for which a deduction otherwise would have been allowable under old Section 181 (i.e., if 75% of production costs are incurred in the United States). The big changes from old Section 181 are that (a) there is no more $15 million limit and (b) the deduction is permitted at the time of the first commercial exhibition to an audience.

This means that studios may now deduct the entire cost of a big-budget film upon release. Wow! The difficulty for the independent film industry is that the deduction is a “passive loss” that can only be offset against limited types of income for individuals, so most individual investors cannot use the deduction, and the corporate tax rate is now too low to entice corporate investors that are not in the industry.

TAX INCENTIVES - Federal http://kpmfilm.com/2018/01/31/film-industry-tax-cuts-jobs-act/ Pay attention! Qualified film, television and live theatrical productions have become eligible for the new 100% Bonus Depreciation treatment. Bonus depreciation now allows a 100% first-year deduction of the cost of new and used qualified property placed in service after September 27, 2017. Why is this exciting when the Section 179 deduction has been increased to $1 million with a phase-out threshold of $2.5 million- and this is indexed for inflation? Here are some reasons: Bonus depreciation applies to assets with up to a 20-year life.

Bonus depreciation is not recapturable like Section 179 depreciation.

Bonus depreciation is not limited.

Bonus depreciation can create a loss.

Therefore, when productions have high capital expenditures and may have net operating losses, bonus depreciation will yield a more favorable federal tax result than Section 179. However, bonus depreciation is set to sunset between 2023 and the end of 2026.

The KPM Take Bonus depreciation is not accepted by some states, so consult your tax adviser when weighing the benefits of which depreciation method to use. Know the rules for bonus deprecation. The benefits are fairly sizable!

The Act represents one of the largest changes to the tax code since 1986. Not everything is set in stone. There’s a lot going on under the new law, particularly as it relates to the entertainment industry. Honestly, the accounting industry is still working through some of the provisions and is still awaiting the IRS regulation interpreting the Act. At KPM, we have been working with companies like yours for over 50 years and we would be happy to guide you through the new law and your options. Contact Chad Robinson at crobinson@kpm-us.com.

THE MARKET SIZE

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COMPETITION

HOW YOU WILL MAKE MONEY

In addition to hundreds of certified sound stages, Greater Los Angeles is also home to hundreds of noncertified production facilities. These facilities range from empty warehouses to buildings that house floors of permanent standing sets for generic locations like hospitals, police stations and courtrooms. While a permit may or may not be required in such facilities (they are required in FilmL.A.’s permit jurisdictions) these production spaces are often included in industry directories of area stage and studio facilities. FilmL.A. estimates that these non-certified facilities represent an additional 1 million square feet of dedicated production space. - FilmL.A.

“There’s an overwhelming amount of production going on so the soundstages, have been tight for space,” noted producer-director Grant Housley, who’s planning to start a feature in the fall. “Everythings’ booked. Netflix, Hulu, Amazon, every single studio, tons of productions are going on. It’s sort of a good problem to have because there’s a lot of employment as well, but there’s a limited amount of space these days.” the “crunch” has been growing. His office recently released reports that placed local soundstage occupancy rates at 92 and 96 percent in different periods of the last two years, up more than 20 points from the before-surge average.

There is a Need for More Stages More soundstages are needed to meet the demand.

www.fuel-la.co

COMPETITIVE ADVANTAGES Connections to LA Trade Tech

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Workforce Dev Community anchored around common purpose space

“Anybody in the studio business who says ‘I’ll just build more (Studios/Stages),’ well no you won’t because there’s nowhere to build it,” Butler said.

“It’s a quandary in a couple of aspects. You’d love to build more stages, but you can’t afford it in this area. You can afford it once you go out of the area, but you’ve got to get the kind of land you need to build a studio, and then you’re out of the Thirty Mile Zone.

TRACTION INDUSTRY OVERVIEW Annual Expenditures between 2016 - 2018 - approx $6B - $7B LA Biz The Biz

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OPPORTUNITY STUDIOS CAMPUS

HERO IMAGE

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STUDIO COMPLEX LAYOUT IMAGE

SOUND STAGE EXTERIOR IMAGE

SOUND STAGE INTERIOR IMAGE

GREEN SCREEN STAGE IMAGE

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WHO? ○

Leadership Team

○

Proven Management Organization: XISM Company

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Advisors & Supporters

○

Ecosystem of partners

OUTLINE & NOTES Opportunity Studios Who & What do we need ?

Who is involved (move this down)

THE RIGHT TEAM DEEP INDUSTRY EXPERIENCE ON EVERY LEVEL

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TBW

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We’ve Assembled The Right Team (to execute)

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We need Partners, Advisors, Investors

From FUEL deck

OUR DIVERSE TEAM Led by LA natives, our FUEL.LA team is uniquely positioned with over 100 years of combined multidisciplinary experience converging on this opportunity. Beyond economic development, entrepreneurial, and health & wellness skills, our core team brings a broad community, local government, and investor network to our FUEL.LA ecosystem.

Our

James A. Kern

Itzel Molina

Mark Kennedy

Garnet S. Heraman

Executive Director

Director of Community Relations & Partnerships

Director of Finance

Director of Investments

ANCHOR TENANT / MANAGEMENT ORG XISM Company Talk about the existing company that will reside and manage the property…

What we do - rand expereince innovation at the intersection of Story, Design and Technology XISM relationships to corporations and agencies XISM credits XISM Website

WHEN? ●

When? ●

Establish before end of 2019

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Activate over next 31 months

THE RIGHT TIME THE TIME IS RIGHT AND OF THE ESSENCE

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Opportunity Pictures meets Opp Productions Creative and content investments stabilized by real property investments Coalition building / broad ecosystem of people and organizations

NEEDS? ●

Needs? ●

Partnership, alliances and Advisory support

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Investment

Next Steps What do we want from listeners ?

- Help spread our story - Connect with us and connect us to others - Help generate Investment - Connect us to other public and private funding

The resources needed Money Help from leaders & advisors ●

TARGET INVESTMENT/RAISED TO DATE TALK ABOUT MARKET BRAD JAMISON (HOW IS HE DOING?) INFO AROUND RENTALS GARY GLASS (Linkedin)/need his pitch deck Bob Bekian/Loyal Studios

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3. Project Benefits

SUSTAINABILITY The Opportunity Studios’ sustainability philosophy is based on the Four Pillars of Sustainability: Social, Human, Economic, Environmental.

Opportunity Studios shares a vision of a “City of Villages” with many leading voices in the production and experiential engagement industries. Our platform model will align with many of Mayor Garcetti’s Sustainable City pLAn initiatives already underway by focusing on amplifying key areas of technology innovation: ● ● ● ● ● ● ●

Water and Air conservation technologies Local Solar EV’s Low/No Carbon Manufacturing Smart City technologies Green/Clean industry jobs Recycling of materials used in production

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SOCIAL ENTREPRENEURSHIP A social entrepreneur is a person who pursues novel applications that have the potential to solve community-based problems. These individuals are willing to take on the risk and effort to create positive changes in society through their initiatives.

Widespread use of ethical practices such as impact investing, conscious consumerism, and corporate social responsibility programs facilitate the success of social entrepreneurs.

KEY TAKEAWAYS ● A social entrepreneur is interested in starting a business for greater social good and not just the pursuit of profits. ● Social entrepreneurs may seek to produce environmentally-friendly products, serve an underserved community, or focus on philanthropic activities. ● Social entrepreneurship is a growing trend alongside socially responsible (SRI) and ESG investing.

OPPORTUNITY STUDIOS SOCIAL BENEFITS Everyone from local residents & entrepreneurs, community groups, educational institutions, corporate partners and Opportunity Zone investors will benefit from Opportunity Studios’ tactics around diversity and inclusion: Succeed with Diversity - D & I is a must have because exclusion based on race, gender, orientation, ethnicity, economic status and national origin is a prescription for failure. Period.

Bet on Women & Minorities - A vast body of research shows that diverse teams make better decisions and narratives featuring minorities and women can be extremely profitable.

Technologize the Enterprise - Opportunity Studios will expand the definition of inclusiveness by helping local industry businesses and productions access cutting edge technology, services and practices.

OPPORTUNITY STUDIOS FINANCIAL BENEFITS

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Opportunity Pictures meets Opp Productions Creative and content investments stabilized by real property investments Coalition building / broad ecosystem of people and organizations

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Opportunity Zones 100% Fed Bonus Depreciation CA State Film tax benefits Ownership stake in the $6 B strong Media Industry

The Social benefits -

Increase access and inclusion for underrepresented communities Education and Workforce development

INVESTOR BENEFITS -

What can Investors expect to gain

COMMUNITY DEVELOPMENT -

What can Investors expect to gain

4. Project Plan

Project Budget Real Estate Renovations Equipment Set-up labor Production Vehicles Marketing and Advertising Staff and Administrators Content Development team Content Development fees / IP Licensing Fees Professional Advisors Start-up / Admin fees

PROJECT BUDGET OVERVIEW

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Real Estate Renovations Equipment Set-up labor Production Vehicles Marketing and Advertising Staff and Administrators Content Development team Content Development fees / IP Licensing Fees Professional Advisors Start-up / Admin fees

OPPORTUNITY STUDIOS INVESTORS THE ASK

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To stay on track for a 2020 launch, Opportunity Studios needs to complete it’s capital stack and have site control in the next 60 days Opportunity Studios hopes that you will support our project in the following ways: - Direct financial support to contribute to our $_,_ _ _,_ _ _ million dollar budget in the form of equity - Connecting Opportunity Studios with financial partners to close out our capital stack - TERMS: - EXIT STRATEGY: Sell majority ownership in seven years paying off all debt and maintaining management rights.

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TIMELINE

OPPORTUNITY STUDIOS PARTNERS & ADVISORS WE ARE LOOKING TO FILL OUT THE REST OF THE OPPORTUNITY STUDIOS ROLES

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Opportunity Pictures meets Opp Productions Creative and content investments stabilized by real property investments Coalition building / broad ecosystem of people and organizations

CONTACT US WE WOULD BE HAPPY TO DISCUSS THIS WITH YOU PERSONALLY

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Opportunity Pictures meets Opp Productions Creative and content investments stabilized by real property investments Coalition building / broad ecosystem of people and organizations

The Logistical Plan -

Build a leadership and advisory team Inspire investors Buy real estate - and do renovations Buy gear Set up shop Create community alliances and programs Create development teams for content Create industry alliances with major producers / studios Tell our story to the world - PR benefits for all Marketing and Sales Create and Distribute Content Compete and Win awards

Project Budget

Investment Amounts

5. Appendix

Research Links

TAX INCENTIVES - California From LA TIMES: In a major win for the local movie and TV production industries, California has extended the state’s film tax incentive program to 2025, adding five years to the program that has helped stem the tide of runaway productions to states including Georgia, Louisiana and New York.

The measure, which was part of Gov. Jerry Brown’s $201.4-billion budget plan that was signed Tuesday, will maintain the $330 million in annual tax credits handed out to selected productions. But it includes more tax credits for independent films and additional incentives for projects that hire labor outside the 30-mile radius around Los Angeles.

California raised the annual tax credit amount to $330 million from $100 million in 2016.

Filmmakers can recoup as much as 25% of their spending — up to the first $100 million — on crew salaries and other qualified costs, such as building sets. Star salaries and other so-called above-the-line compensation don’t count. Studios can then use the credits to offset state tax liabilities in California.

TAX INCENTIVES - Federal https://www.markspaneth.com/insights/category/tax-cuts-jobs-act/tax-reforms-impact-on-the-theater-and-film-industry http://besttaxbreak.net/ https://www.forbes.com/sites/schuylermoore/2018/01/24/how-the-new-tax-bill-benefits-hollywood/#41e27f40643c

(FORBES) 100% Deduction for Certain Property and Films Remarkably, all taxpayers can now deduct 100% of the cost of almost all new or used “Qualified Property” with no limit. The 100% allowance is phased down by 20% per calendar year for property placed in service in taxable years beginning in 2023.

Qualified Property includes almost all tangible personal property if used in a trade or business, but more importantly for Hollywood it now includes films and television shows for which a deduction otherwise would have been allowable under old Section 181 (i.e., if 75% of production costs are incurred in the United States). The big changes from old Section 181 are that (a) there is no more $15 million limit and (b) the deduction is permitted at the time of the first commercial exhibition to an audience.

This means that studios may now deduct the entire cost of a big-budget film upon release. Wow! The difficulty for the independent film industry is that the deduction is a “passive loss” that can only be offset against limited types of income for individuals, so most individual investors cannot use the deduction, and the corporate tax rate is now too low to entice corporate investors that are not in the industry.

TAX INCENTIVES - Federal http://kpmfilm.com/2018/01/31/film-industry-tax-cuts-jobs-act/ Pay attention! Qualified film, television and live theatrical productions have become eligible for the new 100% Bonus Depreciation treatment. Bonus depreciation now allows a 100% first-year deduction of the cost of new and used qualified property placed in service after September 27, 2017. Why is this exciting when the Section 179 deduction has been increased to $1 million with a phase-out threshold of $2.5 million- and this is indexed for inflation? Here are some reasons: Bonus depreciation applies to assets with up to a 20-year life.

Bonus depreciation is not recapturable like Section 179 depreciation.

Bonus depreciation is not limited.

Bonus depreciation can create a loss.

Therefore, when productions have high capital expenditures and may have net operating losses, bonus depreciation will yield a more favorable federal tax result than Section 179. However, bonus depreciation is set to sunset between 2023 and the end of 2026.

The KPM Take Bonus depreciation is not accepted by some states, so consult your tax adviser when weighing the benefits of which depreciation method to use. Know the rules for bonus deprecation. The benefits are fairly sizable!

The Act represents one of the largest changes to the tax code since 1986. Not everything is set in stone. There’s a lot going on under the new law, particularly as it relates to the entertainment industry. Honestly, the accounting industry is still working through some of the provisions and is still awaiting the IRS regulation interpreting the Act. At KPM, we have been working with companies like yours for over 50 years and we would be happy to guide you through the new law and your options. Contact Chad Robinson at crobinson@kpm-us.com.

LUCAS - Museum of Narrative Art https://lucasmuseum.org/museum The Lucas Museum will be a barrier free museum where artificial divisions between “high” art and “popular” art are absent, allowing you to explore a wide array of compelling visual storytelling. Visitors who might be less inclined to visit a traditional fine art museum will be invited to engage with and relate to art forms they recognize and love.

WE WILL INTRODUCE YOU TO NEW FILMS AND FILMMAKERS Cinema is the most visible narrative art form of the 20th and 21st centuries. The Lucas Museum will present daily screenings of films ranging from legendary historic features to the latest and most innovative projects today. We will also present a lecture series featuring the most inventive and intriguing filmmakers of our time.

WE WILL MAKE EDUCATION AND ACCESS A PRIORITY Our programming and education will make pioneering use of our one-of-a-kind collection. The Lucas Museum will provide multiple opportunities for hands-on engaging educational experiences for all ages and curriculum-based learning for students.

You will be able to experiment in many artistic processes, from painting to pre-professional cinema techniques.

OPPORTUNITY STUDIOS Investing in the Future of Urban Economy and Life in the LA Opportunity Zone www.opportunitystudios.com Linkedin Facebook

ADDITIONAL CONTENT