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Fusion Capital Group


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Title: Fusion Capital Group

  • Fusion Capital Group
  • Eleven Eleven Films
  • __________________________________________
  • Investor Presentation

This presentation does not constitute an offer to
sell, or a solicitation of an offer to purchase
securities. This has been submitted on a
confidential basis solely for the benefit of
selected, highly qualified investors and is not
for use by any other persons. By accepting
delivery of this document, the recipient
acknowledges and agrees that i) in the event the
recipient does not wish to pursue this matter,
the recipient will return the copy to the contact
as soon as practical ii) the recipient will not
copy, fax, reproduce, or distribute this
Confidential Presentation, in whole or in part,
without permission and iii) all of the
information contained herein will be treated as
confidential material.
  • Fusion Capital Group and Eleven Eleven Films were
    created to take advantage of the opportunity that
    exists within the Indie film sector for a
    well-capitalized competitor that integrates the
    components of production along with bridge and
    gap financing.
  • Fusion Capital Group is now structuring and
    scheduling to expand and fund the operations of
    Eleven Eleven Films and its productions, bridge
    loans, and gap financing opportunities.
  • Fusion Capital Groups production arm, Eleven
    Eleven Films, has already produced and/or
    financed six films in the last 18 months.
  • Eleven Eleven Films is a highly disciplined
    entrepreneurial production company. Company
    management has demonstrated the ability to avoid
    mistakes often made by companies in the
    independent film industry by strictly controlling
    overhead and film budget expenditures while
    calculating the inherent value of each project.

Presentation Contents
  • The Investment Offering
  • The Independent Film Industry
  • The Opportunity
  • Eleven Eleven Films Strategy for Success
  • Eleven Eleven Films Background Information

Investment Offering
Fusion Capital Group, LLC
Investment Offering
Fusion Capital Group, LLC (the Company) is a
California limited liability company formed to
engage in the business of financing through
bridge and gap loans and producing feature motion
pictures. Fusion Capital Group produces all of
its feature motion pictures through its
production arm, Eleven Eleven Films. The
principal members of Fusion Capital Group, LLC
are Ross M. Dinerstein, Eric Montoya, and Bobby
Schwartz. The Company is seeking funds to
create a financing entity that will finance films
by way of bridge loans, gap financing, and/or by
producing them In-House.  The films that the
Company funds will be cross collateralized by
these strategies therefore insulating each film
against possible underperformance.  The revenues
generated by these films include the proceeds
from their sales, licensing, distribution in the
United States and foreign territories, as well as
from the films exploitation in the home video,
television, satellite, and cable
markets.       Investors will become a limited
liability member of the Company.  Fusion Capital
Group, LLC will retain 2 (two percent) of the
money invested in the Company as a management
fee.  Per each investment, investors will receive
100 (100 percent) of the cash available for
distribution until such a time as that investment
has recouped. Thereafter, the investors will
receive 80 (eighty percent) and Fusion Capital
Group, LLC will receive of 20 (twenty percent)
of the balance of the cash available for
distribution.  All cash distribution will be on a
pro rata, parri passu basis.      

The Independent Film Industry
Studio vs. The Independent
The Independent Film Industry
IndependentProduction Co.
Developed by writers, studios other parties
Distribution pre-sales utilized to assist in
Distributed through studios foreign distributors
Consumers (Theater, Video TV)
Consumers (Theater, Video TV)
Studios are highly vertically integrated and
handle a film from concept through distribution.
Independent production companies produce outside
the studio system, but are assisted by the
studios with financing and distribution.
Competitive Advantages of the Indie (vs. the
Studio) System
The Independent Film Industry
Studios benefit from their deep capital
resources, size, and integration. However, they
are hampered by a diseconomy-of-scale with regard
to film production. Almost all creative
resources in the entertainment market are for
hire and therefore almost equally accessible to
studios and independents. Simply put studios
have more muscle, but indie producers are much
more nimble and possess the same access to major
talent resources.
Notable Recent Independent Films
The Independent Film Industry
Every Oscar-nominated film (Best Picture) of 2005
and all but one of the nominated pictures in 2006
was produced independently. Notable recent films
  • Crash
  • Brokeback Mountain
  • Capote
  • Million Dollar Baby
  • The Aviator
  • Sideways
  • Ray
  • Finding Neverland

Hotel Rwanda The Phantom of the
Opera Saw Alexander Terminator 3 Lucky Number
Slevin The Motorcycle Diaries Unknown
Defined as films on which a completion bond was
utilized. (This is by no means an inclusive
Factors Benefiting Independent Film
The Independent Film Industry
A bifurcated talent market has developed in the
last decade. Top talent will perform in a film
perceived as independent for a fraction of their
studio price. Eleven Eleven Films recent
films Unknown and Black Water Transit are
excellent examples.
Bifurcated Talent Market
Recent DVD sales growth (now the primary feature
film revenue source) has further invigorated the
Indie film sector. Independent films typically
derive a larger percentage of their overall
revenues from DVD exploitation and have benefited
to a larger extent.
DVD Sales Growth
The amount of money available worldwide through
soft money and government subsidy programs has
increased dramatically over the last ten years.
These programs are targeted, for the most part,
at independent film production.
Soft Money Subsidies
Favorable Exchange Rate
The weakness of the US dollar has driven up the
foreign value of independent films produced in US
Coming in the near future
Digital projection, digital capture, and digital
distribution technologies will lower many
entry-barriers for smaller producers and
distributors and expand the Indie film sector.
Digital Technologies
The Opportunity
Fusion Capital Group takes advantage of the
tremendous opportunity that exists in the Indie
film sector for a well capitalized competitor
that integrates the components of production,
foreign sales, and bridge and gap financing.
Fusion Capital Group
The Opportunity
Fusion Capital Groups goal is to raise equity
capital investment to fund a revolutionary motion
picture production company. Most independent film
investment programs are tied to producing a
single film. The investor has only one
opportunity one chanceto participate in the
riches of a mega-hit, or at least to recover his
or her investment. Fusion Capital Groups
multi-film investment program, by its design,
minimizes the investors risk by spreading the
investments over three different types of
strategies. Those strategies include bridge
loans, gap financing, and Eleven Eleven Films
In-House productions.
Fusion Capital
1. Bridge Loans
2. Gap Finance
3. In-House Productions
Bridge Loans
The Opportunity
Bridge loans are investments in larger-scale
productions. These films are primarily
bank-financed and collateralized against
domestic and foreign presales. A lapse in time
usually exists between the start of
pre-production and the closing of the loan, and
therefore an alternate source of equity is
required. Bridge loans are typically paid back
plus an additional 10 to 20 within six to nine
months at the closing of the bank loan, which
occurs approximately at the beginning of
principal photography. Such lenders are usually
able to negotiate back-end points as well. In
2005 and 2006, Eleven Eleven Films provided the
bridge loans on three movies Black Water
Transit, Whos Your Caddy, and Deal. These movies
went through a careful due diligence process and
the expected return in under nine months is 15,
20, and 20 respectively.
Values are approximate based on expected outcome
and does not include back end participation.
A Bridge Loan Case Study Black Water Transit
The Opportunity
Eleven Eleven Films provided a Bridge Loan in the
amount of 1 million for the movie, Black Water
Transit, in the 4th quarter of 2005. Nicolas Cage
is starring in this 35 million feature scheduled
to begin shooting in October of 2006. Comerica
Bank is providing the production financing for
the film, but these loans take months to close
and the film needs cash flow in order to begin
preproduction and to start the bank loan process.
Per the terms of the deal, we funded 1 million
in exchange for a return of 115 (20 annualized
return) of our investment upon bank closing in
mid to late September 2006. In order to secure
our loan, we received a corporate guarantee from
Ascendant, a personal guarantee from the CEO, and
a lien on his property in Utah. We will also
receive 2.5 of the net proceeds of the film as
well as a company credit. This will be one of
the biggest movies of 2006!
Gap Financing
The Opportunity
Gap financing is a common need in the industry.
For one reason or another, the last piece of
financing for green-lit projects is often hard to
come by. In exchange for such commitments these
financiers are last to invest and first to
recoup, and are able to negotiate very favorable
interest terms in the 20 to 30 range along with
back-end points. They are secured by domestic and
foreign presales or rights to sell the finished
film to those presold and unsold territories. A
Gap Financing Case Study Unknown Our first
feature film, Unknown, needed additional
financing because the budget increased due to the
high level of talent that became involved in the
project. A newly formed company, 120db, provided
a gap loan that was needed in order to complete
the films financing in a short matter of time.
120db recouped its entire investment plus an
additional 20 in approximately 120 days.
In-House Productions
The Opportunity
Eleven Eleven Films will have the option to
produce and finance lower budget films in the 1
to 5 million range. These films can be
classified as intelligent genre films,
intelligent to attract the talent, genre to
attract the buyers. Eleven Eleven Films has an
intense and thorough internal green-lighting
process with a mandate to ensure that the
projects foreign value will cover most of the
cost of the film. Eleven Eleven Films utilizes
its relationships with both foreign and domestic
sales agencies to devise an exit strategy to put
the investor in the best position to recoup the
investment and be profitable. In 2005, Eleven
Eleven Films produced and financed Unknown and
The American Standard. The budgets for the films
were 3.6 million and 1.3 million, respectively.
The low-end estimates of foreign sales for each
film exceeded its budget therefore, the domestic
sale is the initial upside for the film.
Two In-House Productions Case Studies Unknown
and The American Standard
The Opportunity
The American Standard is currently in
postproduction and will be completed in September
2006. At this time, the film will be made
available to both domestic and foreign buyers.
The American Standard stars Emmanuelle Chriqui
(Entourage, In the Mix), Joe Pantoliano (The
Sopranos, The Matrix), Ashley Scott (Into the
Blue), Matt Long (Jack and Bobby), Jon Abrahams
(Meet the Parents), and Luke Mably (The Prince
and Me.) Unknown stars Jim Caviezel (The Passion
of the Christ), Greg Kinnear (As Good As It
Gets), Joe Pantoliano (The Sopranos, The Matrix),
Peter Stormare (Fargo), Bridget Moynahan (Coyote
Ugly, I Robot), Jeremy Sisto (Six Feet Under,
Clueless), and Barry Pepper (Saving Private Ryan,
The Green Mile). The Weinstein Company paid 2.4
million to distribute the film in North America
and GreeneStreet International has sold the
foreign distribution rights for 5 million. The
initial return on Eleven Eleven Films investment
in Unknown will be more than 70 in approximately
14 months from the time of funding our
investment. This amount does not include future
revenue from Unknowns theatrical release, DVD
revenue, and other ancillary exploitation of the
Eleven Eleven Films Strategy For Success

Eleven Eleven Films Strategy For Success
Investment Diversification Entertainment
investing is like any other form of investing
diversification is the key to a stable portfolio.
Investing in a single film is risky. But while
any one film might not do well, the film industry
in its many forms is usually successful. Eleven
Eleven Films is not a speculative investment in a
single film, but rather a sound investment in,
and financing of, a group of diverse films
utilizing three specific strategies bridge
loans, gap financing, and In-House
productions. Foreign Sales Partnership Eleven
Eleven Films has strategically partnered with all
of the leading foreign sales companies. This
alliance will be highly complimentary and
synergistic within the current operations of
Eleven Eleven Films and will allow us to properly
evaluate each film before we decide to invest.
Eleven Eleven Films Strategy For Success
Industry Access Eleven Eleven Films also has
relationships with all the major agencies and
management firms in Hollywood, including Creative
Artists Agency, William Morris Agency, United
Talent Agency, Endeavor, and ICM. They regularly
approach us with quality projects for producing
and financing, and are the main source of how we
find our projects. Through these relationships,
Eleven Eleven Films has created alliances with
some of the top production and distribution
companies as well, including The Weinstein
Company, Lions Gate Films, Prospect Pictures,
Mark Cubans 2929 Entertainment, Miramax, and Bob
Yaris conglomerate of companies. We also
continuously build bridges with actors,
directors, and writers who approach us with their
own projects. These projects have the benefit of
built-in names that can sell themselves.
Eleven Eleven Films Strategy For Success
Low Overhead Everywhere in the industry, film
budgets are increasing. Even independent films
are becoming more expensive. Thanks to careful
planning and excellent vendor relations, Eleven
Eleven Films is able to keep to very modest
budgets. Our slate of films may become profitable
in a shorter amount of time because of the low
budgets, and because of our access to talent, the
major agencies, and the many distribution
channels. Distribution Today there are more
ways to distribute a film as well as more
domestic and international buyers then ever
before. Eleven Eleven Films will secure
distribution in every way that is profitable, and
with our low budgets these films can become
profitable through many of the numerous
distribution channels described on the following
Examples of Film Distribution Channels
Eleven Eleven Films Strategy For Success
Theatrical Distribution The traditional way to
see a movie has always been at the theater. In
todays motion picture industry, theatrical
release is not the only source of revenue. A film
can bypass release at your local cinema and still
be very profitable. Foreign Distribution
Overseas markets represent major sources of
revenue for indie films. A recent independent
film called Saints and Soldiers has already
returned three times the investment by selling
the rights to foreign territories. Foreign
rights are traditionally sold through annual
industry events called markets. Film markets
like the American Film Market (AFM) in Los
Angeles, or the film market in Milan, Italy, host
hundreds of potential buyers from all over the
world who purchase content for their
territories. Pay Cable Television Cable
television is huge and growing. Where there was
once a single channel called HBO, there is now a
huge HBO lineup, including HBO Family and HBO
Latin. Subscription-based cable (HBO, Showtime,
Encore, etc.) is often called Pay Cable and is
a major buyer of new film content. They will
purchase small films to fill up airtime or to
promote major television events called
originals. There are even cable channels
specific to independent films, such as the
Independent Film Channel and the Sundance
Examples of Film Distribution Channels
Basic Cable In addition to Pay channels,
there are more and more basic channels that must
have original content. TNT, USA Network, and
Comedy Central are just a few examples of basic
cable buyers. Direct-to-DVD DVD sales are now
so high that the DVD market is no longer just for
specialty content. All genres of film are
selling exceptionally well, and DVD sales are now
considered the top revenue source for independent
films. Network/Syndicated TV While most of
the television buyers are now cable channels, the
broadcast network channels and the syndicated
local channels are still viable markets for
film. Emerging Technology As Internet
commerce, video streaming, and digital video
continue to evolve, new markets are being opened
to media purchasing. Subscription movie websites
are growing in popularity. Additionally,
Netflix, a rent-by-mail Internet DVD site, is
emerging as an important distributor of original
content. Ancillary Markets There are also
much smaller markets for films like airline movie
showings, military service network screenings,
etcthat make up a small part of distribution
possibilities. These may generate smaller
amounts of revenue, but for low budget films they
still can make significant return contributions
to the bottom line.
Eleven Eleven Films Background Info
Eleven Eleven Films Current Snapshot
Eleven Eleven Films Background Info
  • High profile Hollywood-based independent
    production company.
  • Has produced and/or financed 6 films in the last
    18 months.
  • Executive Team has a combined 20 years of
    experience in the entertainment industry.
  • Executive Team has been involved in every aspect
    of the film business from working at a major
    studio to starring in a studio movie.

Executive Team
Eleven Eleven Films Background Info
Ross M. Dinerstein Ross has a M.A. in Motion
Picture Producing from the USC School of Cinema
and Televisions Peter Stark Producing Program
and a B.S. in Economics and Film Studies from
Vanderbilt University. Ross began his career
working in the Acquisitions Department at Miramax
Films. He worked closely with Andrew Herwitz,
Head of Acquisitions. In January 2002, Ross left
Miramax with Mr. Herwitz to form The Film Sales
Company, an independent film sales agency. At The
Film Sales Company, Ross scouted potential
projects and films for representation. Projects
included big-budget theatrical films, small
independent films, direct-to-video films, foreign
films, and documentaries. He worked directly with
filmmakers and/or producers to sell their
projects to theatrical, non-theatrical, and pay
TV distributors. The Film Sales Company continues
to be very active in the independent film
market. Ross has also worked at Clear Channel
Entertainment. At CCE, he created and
implemented a new initiative to change the
function of the TV department from work-for-hire
to content development. Ross is a managing
partner of Fusion Capital Group and Eleven Eleven
Executive Team continued
Eleven Eleven Films Background Info
Eric Montoya Eric attended the University of
Michigan where he earned a B.A./B.S. in Economics
and History. While attending Michigan, Eric
worked for The Southwestern Company, a publishing
company based in Nashville, TN, that specializes
in recruiting college students to run a business
selling reference books door to door. By the
time Eric was a senior in college, he was
successfully managing a 60 person sales
organization that was generating 1.5 million in
revenue. During his senior year, Eric joined up
with a team of guys from the Silicon Valley to
launch a web-based college recruiting firm,
JobAce.com. As a managing partner at JobAce,
Eric was responsible for managing the companys
relationships with Microsoft, Nortel Networks,
Cisco Systems, Intel, IBM, and Apple, while
raising a total of 10 million in venture
capital. After JobAce was acquired in 1999, Eric
was hired to be the COO of the Internet Media
company Trident Solutions. Through 3 different
rounds of funding, Eric was responsible for
raising a total of 20 million while continuing
to run the day-to-day operations of the
company. Eric began his career in the
entertainment industry 3 years ago, getting his
break in television, producing reality television
for NBC. With film always being his true
passion, Eric crossed over from TV to the film
business, partnering with Ross and Bobby to form
Fusion Capital Group.
Executive Team continued
Eleven Eleven Films Background Info
Bobby Schwartz Bobby entered the entertainment
industry five years ago, becoming a major
investor and managing partner of NUAJ
Entertainment and Management, based in New York
City. NUAJ had owned the rights to and managed
the boy band LMNT, which was featured on the
television show Making The Band, as well as
managed the theatrical, television, and movie
career of Jamie-Lynn Sigler, who is best known
for her role as Meadow on the hit HBO series The
Sopranos. While at NUAJ, Bobby advised clients
on their careers with Atlantic Records, Edel
Entertainment, and MTV as well as many other
companies within the entertainment
industry. Before entering the entertainment
business, Bobby owned a brokerage firm at the
Chicago Mercantile Exchange where he is still a
member. While there, he and his company executed
all the order flow in the NASDAQ market for
companies such as Goldman Sachs, JP Morgan,
Morgan Stanley, Merrill Lynch, Solomon Smith
Barney, Deutsche Bank, UBS Warburg Dillon Read,
First Boston, Commerce Bank of Germany, Lehman
Brothers, and more.  He is still an active member
of the Exchange and continues to own an interest
in several futures, securities, options trading,
brokerage, and clearing firms. Bobby is a
managing partner of Fusion Capital Group and
Eleven Eleven Films.
Contact Information
Fusion Capital Group Eleven Eleven Films 1041
N. Formosa Avenue Santa Monica Building West
Suite 16 West Hollywood, CA 90046 (tel)
323-850-2784 (fax) 323-850-2718
eric_at_fusioncapgroup.com ross_at_elevenelevenfilms.co
m bobby_at_elevenelevenfilms.com
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