1. art and entertainment

STRATEGIC BUSINESS PLAN
This Business Plan contains confidential and proprietary information belonging exclusively to HHK Entertainment,
LLC. Reading this document indicates an agreement to keep it confidential and return or destroy it upon
request. This is not an offer to sell securities of any kind. This Business Plan may not be copied or distributed
without the written permission of:
HHK ENTERTAINMENT, LLC
402 E. Gutierrez, Santa Barbara, CA. 93101
Contact: Jim Green, Managing Member
805-637-1966 (cell) 805-964-9084 (office)
[email protected] www.hiphopkidz.net
"If you have a passion for promoting fun and fitness in children and teens, the time may be right
to break into the burgeoning youth market. From Dallas to Montreal, from Chicago to Los
Angeles, youth-based personal training and group classes are hot. The burst in popularity may
be due to growing concern about the epidemic of childhood inactivity and obesity…or other
motivations…”
--- IDEA website (International Dance and Exercise Association)
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STRATEGIC BUSINESS PLAN
Hip Hop Kidz Mission Statement
To provide quality entertainment and fun fitness to kids worldwide, through a multi-media
experience of positive hip hop music and dance.
EXECUTIVE SUMMARY
The Hip Hop Kidz Concept: In a cultural atmosphere that boasts the
everlasting popularity of hip hop, acknowledges the national need for effective
children‘s fitness programs to combat childhood obesity, and supports the huge
success of dance and music based mega-brands like High School Musical, HHK
Entertainment has developed a children‘s lifestyle brand that can best be
described as ―Zumba Fitness meets Kidz Bop meets High School Musical”.
Zumba Fitness is a popular Salsa Aerobics program sweeping the globe. Since
2003, Zumba has trained 20,000 instructors around the world and sold more
than 3 million DVDs via the Internet and Infomercials. Kidz Bop is the most
recognized music product in the U.S. for kids aged 5-12, selling 11 Million CDs in
eight years with cleaned up, kid-sung version of hit songs. And we‘ve all heard
of Disney‘s “High School Musical,” for which consumer products alone generated
$650 million in 2008. In Hip Hop Kidz, children can either be passive consumers
of Hip Hop Kidz entertainment products or active participants in local dance
classes and performance troupes offered by Licensed Instructors—or both. Each feeds the other.
These kids can even become professional performers through web-based contests for inclusion in
Hip Hop Kidz recording sessions, DVD shoots and national touring groups. All of the arms and legs of
the Hip Hop Kidz brand are centralized in an interactive subscription website, and the marketing
message: ―Any Kid Can Be a Hip Hop Kid.‖
Company Overview: Considered the originator of hip hop for kids over 18 years ago, aerobics
champion and Hip Hop Kidz™ Dance Program founder, Suzy Stone formed HHK Entertainment in
2002 with independent film makers, Jim Green and Mark Bacino to exploit the marketing potential of
Stone‘s program. Credited with producing over 45 independent films, Green and Bacino pioneered
brand-building for the young Mary-Kate and Ashley Olsen, developing the platform for their billion
dollar brand over a ten year period. Revenue on the Olsens‘ Warner Home Video movies produced
by Green and Bacino exceeds $30M to date. For the past several years, HHK Entertainment has
created the building blocks for the Hip Hop Kidz™ brand including age-appropriate music, a moviestyle DVD and a book series (distributed by Penguin Young Readers Group). Along the way,
strategic alliances were formed with entities such as Warner Brothers Consumer Products and
Genius Products. While benefiting from the development each of these alliances afforded, HHK
Entertainment remains the sole owner of all rights. In 2004, the HHK dance program achieved
scalability when it non-exclusively licensed Hip Hop Kidz classes to Club Med Family Resorts. To
serve the demand, an instructor training center was organized at the Club Med Sandpiper Village
near Miami, and after five years, Hip Hop Kidz remains a favorite activity.
Products and Services: 1. Instructor Training and Licensing Program: Hip Hop Kidz™ will
offer an affordable Training and Licensing program. Hip Hop Kidz™ has partnered with the
International Dance & Exercise Association (IDEA) to target fitness professionals eager to
earn Continuing Education Credits and augment their incomes with fitness specialties. Licensed
Instructors will drive their students to the Hip Hop Kidz website and receive a percentage of the
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revenues generated from their students when they spend money on class uniforms, media products,
or subscriptions to the ―members only‖ section of the website. In this way, the Hip Hop Kidz
Instructor Training and Licensing Program not only generates revenue in and of itself (through
annual fees and web support upsells), but also creates grassroots support for the brand as it sends
enrolled students to the website for class uniforms, social networking and interactive games. 2.
Subscription Website: Similar in appeal to ―Club Penguin‖ or ―Webkins,‖ the Hip Hop Kidz™ web
site will be 25% free and 75% fee-based. It will contain interactive games, streaming entertainment
and instruction as well as social networking. Kids will be able to communicate with other Hip Hop
Kidz across the country and enter contests including auditions for Hip Hop Kidz recordings, DVDs
and tours. They will be able to search for Licensed Instructors in their hometown and purchase
media products and apparel from the website store. 3. Media & Consumer Products: A Featurestyle DVD, original kid-friendly music and books are among the media products offered by HHK
Entertainment. Instructional DVDs are immediately planned for production.
Business Growth: First year initiatives will focus on three main areas: 1. Launch of the Instructor
Training & Licensing Program nation-wide, 2. launch of the subscription web site, and 3. production
of the first set of instructional DVDs. In the second and third year, the company will undertake a
direct market campaign and continue to produce music, feature-style and instructional DVDs, and
keep the website fresh with new content. Future growth will include a clothing and athletic shoe line
as well as national dance workshops and touring companies. The company expects additional
merchandising opportunities through domestic and international consumer products licensing for
school supplies, toys, etc. Further exploitation of the brand would result in a video game, a
recording group, a reality or fictional television series and a feature franchise.
Competition, Competitive Strategy and Competitive Advantages: While numerous programs
exist in the $121 Billion after school market, none contain an inclusive entertainment component or
positive hip hop for kids. In addition, no Instructor Training & Licensing program exists for kid or
adult hip hop. With respect to our media products, our competitors include Disney, Nickelodeon and
Razor & Tie (Kidz Bop). While these powerful companies may be construed as competitors, they also
help Hip Hop Kidz by setting up the marketplace for our products to be promoted. These megacompanies are also likely acquirers of Hip Hop Kidz, providing a lucrative exit strategy for investors.
(―Club Penguin‖ just sold to Disney for $700 million).
Investment Opportunity: We are offering equity in the company, the level depending upon
amount and terms of investment. We are seeking an investment of $1.5 million to start, with an
option for an additional $1.5 million-- if needed-- for the second year. With values of comparable
children's brands, we anticipate ROI to well exceed 20X investment, with a break-even anticipated
by the 4th quarter of the second year.
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Financial Projection Summary
Pro forma HHK Years 1 thru 5
$120,000,000
$100,000,000
$80,000,000
$60,000,000
Revenue
$40,000,000
PROFIT
$20,000,000
$Year 1
Year 2
Year 3
Year 4
Year 5
$(20,000,000)
The above projections are based on the assumption that $1.5 million in private equity financing is
obtained in the next 6 months to fund our first year initiatives.
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COMPANY OVERVIEW
The Players
HHK Entertainment, LLC was founded in order to turn the tried-and-true Hip Hop Kidz™ Dance
Program into a children‘s mega- brand via the international licensing of its proprietary instruction
and the creation and distribution of branded entertainment products. HHK Entertainment, L.L.C. is
the result of Hip Hop Kidz Inc. founder, Suzy Stone, joining forces with veteran
television producers, Jim Green and Mark Bacino, and marketing veteran, Harold
Weitzberg. Green and Bacino bring a successful entertainment production history to the
Hip Hop Kidz concept, including Mary Kate & Ashley Olsen films and videos as well as
other award-winning achievements in television. Weitzberg has helped brand several
superstars including the Olsens, Veggietales and Goosebumps. With respect to other
burgeoning children‘s consumer businesses, the company‘s brand value is
unprecedented. Several multimedia products have already been created including a 60minute feature-style DVD, four fictionalized books distributed by Grosset and Dunlap, the
Hip Hop Kidz™ CD, written and produced by top Hip Hop industry players; and a
selection of fashionable logo-carrying dance apparel. The company is using these tools to
create a self-feeding system whereby the products generate demand for more products. Other
marketing successes include relationships with Club Med Family Resorts as well as preliminary
relationships with cruise-lines, both of which offer a large number of customers who are valuable
sources of word-of-mouth promotion and expanded brand-awareness.
More About Hip Hop Kidz, Inc
The Hip Hop Kidz™ Dance Program was founded by fitness expert and national aerobics
champion, Suzy Stone, and has grown to more than 20 active sites in Florida, providing quality
after-school dance instruction and professional training to thousands of boys and girls, ages 5 and
up. Hip Hop Kidz students enjoy expressing themselves as they learn the importance of teamwork,
increase their self-esteem, improve their fitness level, and learn the dance moves they see on their
favorite TV shows, music videos and movies. The Hip Hop Kidz™ core business has been
successful for over 18 years, offering a well-tuned set of best business practices that can now be
used to replicate the business nationally through instructional DVDs, and a large-scale Instructor
Training and Licensing Program.
Hip Hop Kidz™ Performance Troupes have grown out of the Florida program, and have
accomplished much over the years including performing in several Macy‘s Day Parades, NFL and
NBA half-time shows, winning Gold Medals in the World Hip Hop Championships, appearing on the
Tony Danza show and in numerous music videos and commercials. While based primarily in Florida,
Hip Hop Kidz has national recognition, thanks to the tireless efforts of Stone and her long-time staff
members, Lee Pugliese (Office Manager and Instructor) and Jenn D‘Angelo (Entertainment
Coordinator and Instructor) and, of course, the long-standing popularity of hip hop dance.
The Concept… and our Competitive Advantage
“Zumba Fitness meets Kidz Bop” with the potential for High School Musical
The Hip Hop Kidz™ Brand concept is like no other, combining diverse elements never before
combined together: children‘s fitness, entertainment, and consumer products under the banner of
music they love, cleaned up for their safe consumption. Think: ―Zumba Fitness meets Kidz Bop”
with the potential for High School Musical.” The Zumba model is one of International Instructor
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Training, instructional DVD‘s and accompanying clothing line. The highly successful Kidz Bop model
is cleaned-up versions of Top 40 hits, sung by regular kids, sold on CD and DVDs in volumes
released several times a year, with offshoots including an interactive website, and touring
companies. The High School Musical model is one of a mega-brand, with one television movie
(focused on music and dance) spawning sequels, and countless merchandising and tie-in
opportunities. Hip Hop Kidz borrows from all of these brands to create its unique concept. There is
no other brand in the children‘s market that does this. No other brand
for hip hop (or dance in general) for children. And no other
entertainment brand that is so participatory.
The time is ripe. Dance, particularly hip hop dance, is enormously
popular, as evidenced by the many television shows and movies
dedicated to it (So You Think You Can Dance, Dancing with the Stars,
America’s Best Dance Crew, Step Up, You Got Served, High School
Musical). Children love to dance and want to learn the moves they are
seeing on their favorite TV shows, movies and videos. At the same time,
parents want their children to participate in positive after school
activities in which they can exercise their bodies, make new friends,
learn about teamwork and gain self-esteem. What is unique to the Hip
Hop Kidz™ dance program is that it appeals not just to the young
serious dancer (who tends to be female and have a particular body
type), but also to ―regular‖ kids, both boys and girls, of all shapes and
sizes and athletic ability. Also unique to the program is its aspirational
quality in which any kid, if they work hard enough, can move their way
up in the class levels, and eventually become performers themselves,
potentially appearing in Hip Hop Kidz™ DVDs, tours, recordings, etc.
The classes promote interest in the Hip Hop Kidz™subscription website
and consumer and entertainment products, and the various entertainment products promote
interest in the dance classes and consumer products. As Hip Hop Kidz™ continues to expand its
brand awareness it is building brand equity across a wide range of platforms and media.
Interest in Hip Hop dance spans socio-economic strata more than any other dance forms. The
market for hip hop dance is enormous. No other hip hop dance programs have made nearly the
impact Hip Hop Kidz™ has. Although competing hip hop dance studios will open as we expand and
replicate our success in other markets, Hip Hop Kidz™ has 18 years of best business practices
experience – something no other program emulates. This experience has created an extremely high
level of quality and operational efficiency that would be practically impossible to copy as an outsider.
We have, to date, invested significant resources to develop a replicable curricula program and
proprietary instructional system that has proven to work in more than 20 locations. When you add
to that the media initiatives (Movie DVD, CD‘s, Books and subscription web site) , the Hip Hop
Kidz™ dance program becomes unlike any other dance class in the country and one that many
dance instructors will want to be part of. The time is now to release this concept on a much larger
scale.
Business Growth: First Year Initiatives
First year initiatives will focus on three main areas: Launch of the Instructor Training & Licensing
Program nation-wide, launch of the subscription web site, and production of the first set of
instructional DVDs (to round out the media products immediately available for sale).
In the second and third year, the company will ramp up its marketing efforts with a direct market
campaign and continue to produce original music, feature-style and instructional DVDs, and keep
the website fresh with new content.
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Future Growth
Interest in our products and services will grow as our dance classes spread across the country via
multiple graduates of our Instructor Licensing Program. We will continue to expand this program, as
well as develop and produce additional instructional DVDs, original music, books, and movie-style
DVDs. Further, we plan to launch a clothing and athletic shoe line, as well as national dance
workshops and professionally developed touring companies. We also expect additional
merchandising opportunities through domestic and international consumer products licensing for
school supplies, toys, house wares, etc. Further exploitation of the brand would result in a video
game, a recording group, a reality television show (à la The Real World and So You Think You Can
Dance) and a fictional television series based on the Hip Hop Kidz Penguin Book Series.
Management
HHK Entertainment has the following organizational structure:
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Management Bios
Harold Weitzberg, COO – Mr. Weitzberg formed Weitzberg Consulting, Inc. in 1994 to advise in
the development, branding, marketing, licensing, production and distribution of entertainment,
educational and consumer products and brands worldwide. In addition to working with HHK
Entertainment, Mr. Weitzberg spent 8 years developing the Mary-Kate and Ashley Olsen
Brand. He has consulted for the Katrina Barillova Fitness Program, Candace Cameron‘s KREW
Program, BOZ Licensing Program and Vergence Media Development, as well as Big Idea Productions
(VeggieTales), Parachute Publishing (R.L. Stine Goosebumps), Blackboard Entertainment/Magic
Johnson Entertainment, Interactive Learning Group, JNCO Entertainment, Little Hardhats, Rick Dees
Enterprises and other children and Entertainment properties. Earlier brands developed include The
Jane Fonda and Richard Simmons Workout Series. Mr. Weitzberg has held executive positions with
Karl Lorimar Home Video, Child‘s Play Video, Wood Knapp Video and Dualstar Entertainment. He
has been a national board member of the Coalition of Quality Children‘s Media (www.CQCM.org) for
the past 8 years. Mr. Weitzberg has a Master‘s Degree in Education from Hofstra University and has
completed Post Graduate Doctoral course work in Educational Administration at New York University.
Jim Green, Executive Producer and Partner of HHK Entertainment, LLC – A pioneer of ABC's Movieof-the-Week, Green formed his own Independent film company in 1978. He has produced over 50
films including such highly rated mini-series as the Emmy winning ―Steven King‘s IT,‖ and Vincent
Bugliosi‘s ―And the Sea Will Tell.‖ Green earned a Christopher Award for ―A Shining Season,‖ and a
Best Picture Cable Ace Award for the HBO film, ―Doublecrossed,‖ starring Dennis Hopper. Other
outstanding movie highlights include the Emmy-nominated ―Fallen Angel,‖ ―One Special Night‖
starring Julie Andrews and James Garner, and several movies and music videos starring Mary-Kate
and Ashley Olsen sold via Warner Home Video. He continues to produce network movies,
independent films, and cable movies with his production company partner, Mark Bacino. Mr. Green
and Mr. Bacino formed HHK Entertainment LLC with Suzy Stone, national director of Hip Hop Kidz
Inc. in 2004. Green is a graduate of Cal State University, Northridge.
Mark Bacino, Executive Producer and Partner of HHK Entertainment, LLC – Mr. Bacino began his
career working on such shows as “The Price is Right”, “The Facts of Life”, “Different Strokes” and
“One Day at a Time”. After serving as production assistant to Dabney Coleman on his critically
acclaimed television series “Buffalo Bill,” Bacino began associate producing television movies,
and joined Green/Epstein Productions in 1987. He became partner of the company in 1999 when
Green/Epstein/Bacino Productions was formed. Among his Executive Producer credits are ―One
Special Night,‖ "Breaking the Surface: The Greg Louganis Story," and several highly rated and
acclaimed movies and music videos starring Mary-Kate and Ashley Olsen. It was Bacino's 10-year
association with the Olsen Twins Brand that led Hip Hop Kidz™ founder, Suzy Stone to contact him
to develop her regional dance program into a nationally recognized children‘s lifestyle brand. In
2004, Bacino, Green and Stone formed HHK Entertainment, LLC for this purpose. Mr. Bacino
graduated from California State University Northridge with a Bachelor‘s degree in Business
Administration.
Suzy Stone, Vice President of Operations and Partner of HHK Entertainment, LLC. Ms. Stone has
been a leader in the fitness industry for many years, having been a gold medalist in the U.S.
National Aerobic Championship and a renowned aerobics instructor nationwide. Her credentials
include certifications with both the American Council on Exercise (ACE) and the Aerobics and Fitness
Association of America (AFAA). As a continuing education provider for the International Dance and
Exercise Association (IDEA), Stone has traveled to more than 20 countries training thousands of
fitness professionals. Stone founded Hip Hop Kidz, Inc. 18 years ago, and is credited as being the
originator of hip hop for children. Stone earned a Bachelor of Science degree in Physical Education in
1982 from the University of Miami, and a Masters degree in Exercise Physiology from the University
of Michigan.
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Lee Pugliese, HHK Trained Instructor and Office Manager
Mrs. Pugliese graduated from Florida International University with a B.A. in Arts and Dance
Education. She has been dancing and teaching in South Florida for over 17 years. Besides being a
Hip Hop Kidz instructor, Pugliese has been the Hip Hop Kidz Office Manager for twelve years. Her
responsibilities include handling all parent inquiries, book keeping, organizing all registrations and
student accounts, and managing all HHK staff and instructors. In addition, she handles the ordering
and distributing of the company‘s merchandise and equipment, and assists with brand marketing.
Jenn D’Angelo HHK Trained Instructor and Performance Troupe Coordinator
Ms. D‘Angelo has been the Hip Hop Kidz Entertainment Coordinator and performance troupe
instructor for over a decade, responsible for booking and coordinating Hip Hop Kidz performance
troupes and training our first licensees, Club Med.
Jamie Green, Producer and HHK Trained Instructor – Ms. Green graduated from Stanford
University with a B.A. in Political Science, returning to her native Los Angeles to continue her
professional career as a dancer and singer which she began as a child. She taught Middle School for
five years, co-founded a musical theater conservatory for teens, and choreographed and wrote
songs for many of the Billboard chart-topping videos for the young Mary Kate and Ashley Olsen. She
worked in TV movie development and production for seven years before landing at HHK
Entertainment. She A&R'd the Hip Hop Kidz debut CD, was an associate producer on the DVD, and
has managed and taught the Hip Hop Kidz program in Southern California. In her spare time, Jamie
is an award-winning songwriter and independent recording artist.
Jack Kimball, Producer – Mr. Kimball has been a production coordinator and executive assistant on
17 television movies, features and music videos. He is also a free lance director-editor and an
accomplished stage performer. He directed, edited and produced the behind-the-scenes footage of
“Hip Hop Kidz: It's a Beautiful Thing” and does all in-house editing for Hip Hop Kidz™. In
addition, he recently won a Scion Directing Award.
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PRODUCTS AND SERVICES
Existing Products
Feature-Style DVD
The first DVD in the Hip Hop Kidz Feature-Style DVD series, ―Hip-Hop Kidz: It's a
Beautiful Thing‖, tells a fictional story that takes viewers into the world of the
real-life Hip Hop Kidz dance troupe. Starring real-life Hip Hop Kidz, the 60minute feature dramatizes the Kidz‘ efforts to pull together as a team to create a
music video for a competition that could land them a record deal. Allison, whose
father disapproves of anything having to do with hip hop, is torn between loyalty to
her friends and the approval of her father. Without her, the video can‘t get made,
and her friends may miss their big break. Does she dare defy her father, or can
they find another solution? The kids learn the importance of friendship, loyalty,
being themselves and working hard towards their goals. The DVD is packaged with a bonus music
CD, ―Hip Hop Kidz Are in the Building!,‖ featuring original music performed by the Hip Hop Kidz
recording group, ―H2KZ.‖ It also contains bonus features including dance instruction, behind-thescenes, and acting tips from a renowned acting coach.
The DVD was directed by Donn J Viola, who has directed
music videos for top recording artists, including legendary
hip hop artist, Eminem. It received an iParenting Media
Award for ―Greatest Products‖‖ in the Home Video category
along with the “Chronicles of Narnia,” “High School Musical‖
and the Wiggles.
Books
HHK Entertainment, LLC has a licensing deal with Grosset
and Dunlap‗s Penguin Young Readers Chapter Books for four books. These well-written, well
researched books tell compelling, humorous and touching fictionalized stories of reallife Hip Hop Kidz in Miami. This series of books by a well established first class
publisher of children‘s literature is an invaluable tool to creating a television series
and/or kid‘s feature film. As a key strategy, HHK Entertainment intends to exploit the
book series to the appropriate media hungry for timely new product, as soon as the
national publicity campaign is underway.
Music
Hip Hop Kidz™ music provides a safe alternative for the growing number of kids who love hip hop.
Hip Hop Kidz™ music contains the cutting edge beats, musical hooks and clever
lyrical phrases of chart-topping hip hop tracks, but the lyrics are clean, and the
message age-appropriate. Recorded by real-life Hip Hop Kidz, the first CD in the
series, ―Hip Hop Kidz are in the Building!‖ was executive produced by TUFF, who
has worked with Dr. Dre, Usher, Brandy and Jamie Foxx to name a few. It is an
enhanced EP with video clips, interviews, photos, and lyrics. The music has been and
will be used as a soundtrack to the DVD‘s, website, Direct Market commercials and live
performances. HHK Entertainment owns the copyright and publishing to the music, and intends to
shop it to major record labels and music publishing companies as soon a national publicity campaign
in underway.
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Products Planned
Instructional DVDs
HHK Entertainment, LLC. immediately seeks to produce 3 Instructional DVDs based on the
proprietary teaching method of Hip Hop Kidz. The productions will be an on-going initiative to serve
the demands of a continuity program offered through the direct market, subscription web site and
retail process.
More Music – The Next “Kidz Bop”
Hip Hop Kidz™ seeks to become the Hip Hop version of ―Kidz Bop,‖ producing Hip Hop music by
and for kids in volumes released every year. Hip Hop Kidz original music, and Hip Hop Kidz cleanedup covers of hit songs will be available on CD, as digital downloads and ringtones, and also serve as
the soundtrack for the instructional and feature-style DVD‘s, and for Hip Hop Kidz dance classes.
More Feature-Style DVDs
HHK Entertainment LLC plans to utilize its partnership with Club Med Vacation Resorts to release
a series of mini action-adventure movies which take place in various exotic locations where the
fictional Hip Hop Kidz performance troupe tours, and when not on stage, solves mysteries presented
to them on the road.
Merchandise
HHK Entertainment, LLC will implement a comprehensive consumer licensing program
based on the lifestyle of Hip Hop Kidz™. This licensing program will include the
development of fashion, accessories, footwear, school supplies, toys, house wares and other
consumer products. Initial clothing concepts have already been developed and presented to
various clothing licensees. We are also planning to implement promotional partnerships with
major consumer brands in order to increase brand awareness. Initial discussions have taken
place with major cereal manufacturers and other product categories.
Existing Services
Dance Program
The Florida-based Hip Hop Kidz™ Dance Program is a comprehensive children‘s dance and fitness
company. Throughout the program, kids learn teamwork as they practice and prepare for group
dance recitals. In addition to learning social skills and improving their fitness level, kids build self
esteem all while having fun. Hip Hop Kidz is a strong antidote to negative images and unhealthy
activities. With respect to curricula, Hip Hop Kidz choreographs and teaches dance routines that
help make children of all abilities feel like superstars. A range of classes allow kids to progress
through more challenging routines as they grow. This 18-years successful program will be the basis
for the Hip Hop Kidz Instructor Training and Licensing Program.
Performance Troupes
Students in the Hip Hop Kidz™ dance program work their way up through various levels to become
performers at local community events, or even participate in national and international events and
television appearances. The ―best of the best‖ are chosen to record Hip Hop Kidz music, or appear in
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Hip Hop Kidz™ DVDs. This aspirational aspect of the Hip Hop Kidz™ brand encourages brand
enthusiasm and loyalty.
Hip Hop Kidz performance troupes have accomplished much over the years including:
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Opening concerts for Destiny‘s Child, 98 Degrees, and Jessica Simpson.
Performing with the Backstreet Boys in the Macy‘s Thanksgiving Day Parade.
Appearing in fashion shows for Macy‘s and Tommy Hilfiger.
Performing half-time shows for numerous NBA games and NFL Super Bowls.
Appearing in music videos for Lil Romeo, Lenny Kravitz and Ricky Martin.
Winning gold medals in the World Hip Hop Championships.
Appearing on MTV‘s TRL and BET‘s Hits from the Street.
Appearing in commercials for K-Mart, Burdines, Barbie, and many more.
Touring Singapore, and Club Meds in the Caribbean.
Performing on the Tony Danza Show.
The 18 years successful performance troupes in Florida will be the basis for an additional Training
and Licensing Program for Hip Hop Kidz Licensed Instructors who wish to take their students to the
next level.
Services Planned
Subscription Web site
Immediately, HHK Entertainment will launch a cutting edge, highly interactive web site along the
lines of Miley‘s World, Princess Academy, and Webkins. The web site will contain games, streaming
and downloadable entertainment and instruction (e.g. ―Dance Move of the Day‖) and social
networking. Members will be able to communicate with other Hip Hop Kidz across the country,
upload photos, videos & original songs, and enter contests including auditions for Hip Hop Kidz
recordings, dvds and tours. 25% of the site will be free, while 75% will be for members only. Kids
who enroll in a local Hip Hop Kidz dance program will receive one month membership free, along
with their class uniform – a Hip Hop Kidz t-shirt.
Instructor Training and Licensing Program / Partnership with IDEA
Hip Hop Kidz will offer affordable (under $300) training and licensing seminars to individuals
interested in teaching Hip Hop to children, much like the training offered by Zumba Fitness, a
popular Salsa Aerobics program for adults sweeping the globe. (Since 2003, Zumba has trained
20,000 instructors around the world and sold more than 3 million DVDs on the Internet and through
infomercials). Licensed Instructors will be required to renew their license each year, maintaining
proper training. They will have the option of joining our Instructor Network which will be a monthly
fee-based online support system providing music and choreography on the one had, and web tools
to run their business on the other. In addition, licensed instructors will receive a percentage of sales
generated by their students through the website. Once trained, instructors will be well-prepared for
self-employment, able to set their own schedule, their own tuitions, and keep the revenue for
themselves. In addition, they will become enthusiastic foot soldiers in a nationwide grassroots
marketing campaign, sending millions of children to the subscription website.
A Hip Hop Kidz™ Trained Instructor has the potential to earn $19,620 - $26, 340 per year working
part-time, $36,150 -- $88,020 per year working full-time and up to $104,550 per year for a very
popular instructor willing to work overtime. Given the low start-ups costs ($2,200) and very low
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training fee (under $300) and Instructor Network fee ($45 per month for a 6 month minimum), this
is an amazing opportunity for any entrepreneurial person who loves dance and loves kids.
During the past 12 months, 2.2 million Americans have lost their jobs. The majority of those people
will either start their own business or go to work for a microenterprise. According to Women‘s
Economic Ventures, many of these new entrepreneurs are under 30‘s and two-to-one they are
female – our target market for Hip Hop Kidz Instructors. The time is ripe for our Training Program
According to the U.S Bureau of Labor an increasing number of people are spending time and money
on fitness due to the reduction of physical education programs in schools and parents‘ growing
concern about childhood obesity. In addition, the growing popularity of dance for recreational and
fitness purposes has resulted in increased opportunities to teach dance, especially for older dancers
who may be transitioning to another field.
We believe that our training program will appeal to a great many people, including aspiring and
retiring dancers and choreographers, former cheerleaders, aerobics and fitness instructors, street
dancers, existing dance schools, athletic clubs and elementary school teachers. With a Hip Hop
Kidz ™ Instructor License, one can create employment for oneself that suits one‘s income and
scheduling needs. The work is flexible, can be part-time or full-time, has a built-in exercise
component and is fun. We believe this makes it attractive to potential licensees, especially in the
current economy which requires that people be entrepreneurial, or juggle more than one job.
Applicants will recognize the great benefit they will receive from Hip Hop Kidz™ brand awareness.
In turn, licensed instructors will increase awareness of the brand (through advertising and teaching
local classes and promoting the website), and revenues for the brand (through their training and
licensing fees).
Tours & Workshops
The ―best of the best‖ Hip Hop Kidz™ chosen from existing classes, and from contests on the
website, will form national touring troupes of dancers and singers/rappers to be opening acts for
major hip hop and pop artists and other touring shows and/or headliners in their own right. National
fee-based dance workshops will be held to bring Hip Hop Kidz™ to cities that don‘t yet have licensed
instructors, or to bring together the kids in regions that do with special guest choreographers.
Facts and Quotes from the U.S. Small Business Administration
“The credit crunch has sparked entrepreneurship, but more importantly, entrepreneurship is sparking
economic expansion,” said Dane Fox, vice president of business development at PartnerUp.com. Small
businesses are now responsible for more than 97 percent of new jobs, according to a recent report by
the Small Business Administration.”
”The states with the highest percentage of respondents indicating they were seriously considering
starting a business, or are already working on starting a business, were: California, New York, Texas,
Florida, Arizona, Minnesota, New Jersey, Washington, Georgia, Maine.”
The top industries in which respondents indicated that they were likely to start a business were:
1. Internet/Web/IT/Technology 2. Advertising/Marketing
3. Retail 4.Arts/Entertainment/Media 5. Consulting
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
MARKETING
Market Overview
HHK Entertainment is focused on the kids consumer market (ages 5 -12 and beyond) through a
variety of revenue streams. These markets include direct response, retail, Internet, business-tobusiness (i.e. licensing), broadcasting and live tours. HHK Entertainment LLC participates and
plans to participate in these markets through product sales (DVDs, CDs, downloads, books, clothing
and apparel), licensing (merchandise, video games, television shows); and services (subscription
web site, performance tours and dance workshops). In addition, we are focused on the after-school
markets and fitness and dance industry for our Instructor Training Program.
Market Size
The size of these consumer markets are listed below and illustrated in Figures 1 through 6 below.
After-School Market
The Hip Hop Kidz Dance Program is part of the $121 billion US after-school programs market,
which is expected to grow at compounded annual growth rate (CAGR) of 4% to $147 Billion by
2011.
DVD Market
The DVD sales market is estimated at $59 billion worldwide and is expected to grow at a CAGR of
12.6% to $91 Billion by 2011.
Music Market
The $35 billion global and $12 Billion US music markets are expected to be stagnant for the rest of
the decade; however, the $4.9 billion world ringtone and $2.0 billion music download markets are
expected to grow at a rapid CAGR of 18.2% and 43.4% each to $11.3 billion and $12.1 billion
respectively by 2011.
Video Game Market
The $7.4 billion US video games market is estimated to grow at a CAGR of 4.2% to $9.1 billion by
2011.
International Licensing
The $185 billion world licensed retail market is expected to grow at a CAGR of 2.2% to
approximately $207 billion by 2011; the $6 billion corresponding license fees, however, are
expected to continue growing at a lower rate, at a CAGR of $1.5%, to $6.5 billion by 2011. Overall
product licensing revenue in the children‘s business also can deliver enormous results. According to
License! Magazines (4/1/2003 and 4/1/2006), of the top 91 Licensors in 2002, 16 were exclusive
Children‘s products licensors, of which four were single product licensors. 14 additional top licensors
had children‘s products and brands as part of their overall licensing strategy. These licenses
include:



Nickelodeon at $2.6B in 2002, $5.2B in 2005
Hit Entertainment at $2.2B, $2.25B in 2005
Disney at $14.0B in 2002, and $21B in 2005
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN




Mary-Kate and Ashley Olsen at $1B in 2002
4Kids Entertainment, Marvel, Mattel, and United Media each between $2.0B and $5B in
2005
Pokemon at $1.1B in 2002, $1.3B in 2005
Non-TV brands such as Little Suzy‘s Zoo at $240M and Mary Engelbreit at $107M in
2002
Book Retail Market
The $25.9 billion US retail book sales market is expected to grow at a CAGR of 1.8% to $28.3 billion
by 2011; The $5.4 billion US juvenile book sales market is expected to grow faster, at a CAGR of
11.8% to $9.4 billion by 2011, with hardbound books making up 84% of the juvenile market in
2006 and 90% in 2011.
Television Market
According to the Newspaper Association of America, the total US television revenues for 2003 were
approximately $42 billion.
Instructor Training and Licensing Market
Zumba has trained 20,000 instructors around the world and sold more than 3 million DVDs on the
Internet and through infomercials. In addition, fitness industry professional organizations such as
IDEA (International Dance and Fitness Association), draw on as many as 23,000 members each,
seeking ways to earn Continuing Education Credits to expand their skill set and employment
opportunities. Retired dancers, or graduated cheerleaders are a large and untapped source of
potential Hip Hop Kidz trained instructors as well, as are existing dance schools, athletic clubs and
elementary school teachers looking to supplement their income with teaching afterschool activities.
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
Competitive Strategy
Our competitive strategy is based on a combination of attributes already discussed at some level in
this plan, but here we revisit them.
Quality Cross-Promotional Products and Services
Based on a highly successful hip hop dance program for kids, HHK
Entertainment LLC has created quality music and entertainment that has not
been widely accessible for young people -- until now. All of the product
extensions of the brand are well-written, well-produced, visually compelling,
and authentic, as they are based on real-life kids who love hip hop. With its
motto, ―No Drugs, No Violence….Just Dance!‖, Hip Hop Kidz is a creative
alternative to the negative images of mainstream hip hop culture, harnessing
the culture‘s phattest beats and raw expression to enable kids to tap into their
own expression and potential. Hip Hop Kidz uses hip hop to express positive
feelings of self-confidence, self-respect, and good health. We make fitness
fun. And our music makes it safe, without robbing it of its raw energy, which
kids love. Hip Hop Kidz DVDs and books provide compelling stories in which
the characters learn the importance of hard work and teamwork, learn from
their mistakes, express themselves and follow their bliss: hip hop dancing.
Parents and kids alike can feel good about the message, the image and the
sound that is Hip Hop Kidz, and the quality that defines the Hip Hop Kidz
brand.
Our Instructor Training and Licensing Program is a unique strategy whereby Hip Hop Kidz instructors
serve not only as revenue generators (through the fees they pay), but as powerful tools for
marketing and distribution of the brand through their efforts to enroll students in their classes, send
them to the subscription website and purchase media products and merchandise. They help build
participation in the brand through the grassroots.
Multiple Revenue Streams
Our strategy is to obtain sales through a variety of revenue streams:









Instructor Training Fees & upsells
Internet Sales & Website Membership Fees
Direct Response sales of existing products and instructional DVDs
Retail Sales
Music Licensing & Publishing
Merchandise Licensing
International Licensing
Television Licensing
Tour and Workshop Fees
Market Positioning
Our kid target market (ages 5-12) is a viable niche which is sizable and growing, and combines
entertainment, fitness, after-school programming and merchandising. The hip hop market is over
25 years old and continues to evolve and expand. Many of the parents of kids this age grew up on
Hip Hop. Hip Hop Kidz is built on the popularity of this music and the acknowledged desire to
make it accessible and safe for children of all ages and backgrounds. Most important is that our
brand participation is renewable. As children grow, expand their experience and graduate from the
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
dance program, new participants enroll. We believe that the Hip Hop Kidz concept, products, brand
positioning, licensing and performance opportunities make us uniquely positioned to become a
highly successful international multimedia entertainment provider for kids for many years to come.
For our Instructor Training and Licensing Program, our target market includes fitness professionals,
dancers and former dancers, former cheerleaders and elementary school teachers. Every one of
these niche groups has active associations, publications and conventions through which advertising
and marketing is relatively inexpensive, and highly targeted.
Unique Brand Message: “Any Kid Can Be a Hip Hop Kid!”
Our long term strategy is to become a globally recognized kid‘s brand. What is particularly unique
to our strategy is that the brand not only provides the opportunity for consumers and fans to enjoy
Hip Hop Kidz entertainment and merchandise passively, but to actively become a ―Hip Hop Kid‖
through participation in the dance classes and workshops. In this way, any kid truly can become a
Hip Hop Kid!
Successful Management Team
Our management team comes with a wealth of experience, including nearly two decades of the
successful Hip Hop Kidz dance program developed by Suzy Stone; the successful veteran film
producers Jim Green and Mark Bacino who were behind the creation of multiple Mary-Kate and
Ashley Olsen movies and videos; Harold Weitzberg, who has vast experience in marketing,
merchandising, and branding in children‘s consumer and entertainment marketplace including such
well known brands as the Olsen Twins, Goosebumps, and Veggietales.
Strategic Partnerships
Our competitive strategy includes partnerships with best-of-class industry leaders to develop and
deliver our products and license the Hip Hop Kidz brand on a global basis. Currently these partners
include the International Dance and Exercise Association (IDEA) for our Instructor Training and
Licensing Program, Grosset & Dunlap for book publishing and Foothill Entertainment for
International Broadcast Licensing. We will continue to consider other strategic partnerships to
maximize the success of the brand.
Competition
We compete or plan to compete against major entertainment companies that target kids around the
world. However, each of these companies can simultaneously become a potential partner or
acquirer as they look to expand their presence. Further, although these companies may be
construed as competitors, they also help us by setting up and providing the marketplace for Hip
Hop Kidz products to be promoted. It is also important to note that the majority of the ―brands‖
provided by these companies are scripted and passive. Hip Hop Kidz is unique in that it offers
direct participation in the brand, thus making it active and aspirational.
The most powerful competitors include Disney (High School Musical, Hannah Montana, Jonas
Brothers), Viacom‘s Nickelodeon (Zoey 101, Drake & Josh) and Razor & Tie Direct, the producer of
Kidz Bop -- the most popular and recognized music product in the US for kids aged 4 to 11.
There are also competitors in the US and around the world that offer programs to learn how to hip
hop dance. However, the Hip Hop Kidz Dance Program has been recognized among the best in the
industry through major competitions and famous performers, and is the only branded hip hop
program that focuses on the kid market.
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
Marketing Plan
HHK Entertainment‘s marketing plan is based on the following key components:
Web Based Marketing
We will utilize the most cutting-edge web marketing techniques to spread the word of our new
subscription site to the three main consumer groups we will be targeting: Kids (with interactive
games, social networking features, and contests); Parents (with information about the brand, and a
list of Trained Instructors in their hometown); and instructors (with information about becoming
licensed, and support for those who are).
Cross-Promotional Products & Services
Our products and services are designed to promote each other. Licensed Instructors send kids to the
website. Kids who visit the website find Licensed Instructors in their hometowns. Watching the
DVDs, listening to the music, reading the books, kids want to join Hip Hop Kidz dance classes. Kids
in the dance classes want to watch the DVDs, listen to the music, read the books.
Clear Marketing Message
Hip Hop Kidz facilitates safe involvement in a genre that kids love, putting their parents at ease. It
also disguises fitness as fun, which is key to combating the epidemic of childhood obesity. The
message of the brand is always positive and uplifting, designed to teach kids the importance of
exercise, self-expression, confidence and teamwork. The marketing message that underscores it all
is ―Any Kid Can Be a Hip Hop Kid!
Hip Hop Kidz marketing messages are also designed to attract strategic licensing, distribution, and
production partners as they are key to the company‘s competitive strategy. The opportunities for
such partners are endless: kid cereals, energy bars and sports drinks, athletic shoes and clothing
lines, positive hip hop artists and tours, and in the non-profit world, organizations such as the
Juvenile Diabetes Research Foundation and the American Heart Association.
Direct Response Program
Utilizing the experience and consultation of a DR agency such as Pinnacle Direct, we will test and
develop media and product strategies to maximize the return on such programs. We will focus on
selling our Instructional DVDs with up-sales of our feature-style DVD, music, books and apparel.
Merchandise License Agreements
We will implement numerous license agreements for Hip Hop Kidz merchandise. An effective
licensing program will communicate the Hip Hop Kidz brand values, increase consumer awareness
and promote the long-term viability of the brand.
International Broadcast Licensing and Distribution
We have partnered with Foothill Entertainment, Inc., a company specializing in distribution to
international clients, to license our media products on the international markets. We expect
revenues with minimal marketing costs.
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
FINANCIAL ANALYSIS AND INVESTMENT
Financial Projections, Financing & Market Strategy
From inception we have been financed largely by our owner-members with approximately
$1,800,000. We are now seeking $1,500,000 additional investment through private investors
during the next six months for the first phase of growth that will bring Hip Hop Kidz to an all new
level of national success. The company‘s financial projections are for the period commencing upon
receipt of the funding sought, through a period of three years thereafter. These projections are
shown in the following table.
PROFIT & LOSS STATEMENT - HHK Ent.
Number of Customers Acquired
Revenue
Instructor Training Revenue
Product Sales
Internet Subscriptions
Other
Gross Revenue
Yr 1
29,760
3
4
8
5
%
Yr 2
126,960
%
Yr 3
387,960
%
Yr4
939,360
2,160,000
3,375,000
13,737,600
1,687,500
20,960,100
10.3%
16.1%
65.5%
8.1%
100.0%
$
%
Yr5
1,943,760
%
$
552,000
$
216,000
$
864,000
$
108,000
$ 1,740,000
31.7%
12.4%
49.7%
6.2%
100.0%
$
$
$
$
$
1,035,000
2,025,000
3,726,000
1,012,500
7,798,500
13.3%
26.0%
47.8%
13.0%
100.0%
$
1 $
100,000
1 $
50,000
1 $
595,000
$
3 $
145,200
5 $
21,600
4
6 $
27,000
2 $
313,200
9 $
350,000
$
25,000
$ 1,627,000
$
113,000
6%
5.7%
2.9%
34.2%
0.0%
8.3%
1.2%
0.0%
1.6%
18.0%
20.1%
1.4%
93.5%
$
$
$
$
$
$
$
$
$
$
$
$
$
120,000
60,000
714,000
600,000
304,200
202,500
810,000
121,011
1,403,730
420,000
30,000
4,755,441
3,043,059
39%
1.5%
0.8%
9.2%
7.7%
3.9%
2.6%
10.4%
1.6%
18.0%
5.4%
0.4%
61.0%
$
$
$
$
$
$
$
$
$
$
$
$
$
144,000
72,000
856,800
1,000,000
480,000
337,500
1,350,000
325,243
3,772,818
504,000
36,000
8,842,361
12,117,739
58%
0.7%
0.3%
4.1%
4.8%
2.3%
1.6%
6.4%
1.6%
18.0%
2.4%
0.2%
42.2%
$
172,800 0.3% $
207,360 0.2%
$
86,400 0.2% $
103,680 0.1%
$ 1,028,160 1.8% $ 1,233,792 1.1%
$ 1,500,000 2.6% $ 2,500,000 2.3%
$
600,000 1.1% $
792,000 0.7%
$
432,000 0.8% $
480,000 0.4%
$ 1,890,000 3.3% $ 1,800,000 1.7%
$
886,391 1.6% $ 1,685,135 1.6%
$ 10,282,140 18.0% $ 19,547,568 18.0%
$
604,800 1.1% $
725,760 0.7%
$
43,200 0.1% $
51,840 0.0%
$ 17,482,691 30.6% $ 29,075,295 26.8%
$ 39,640,309
$ 79,522,305
69%
73%
7 $
$
$
1 $
1 $
1 $
1 $
1 $
1 $
1 $
1 $
1 $
$
$
$
27.8%
0.9%
0.2%
2.3%
0.9%
2.0%
2.9%
0.6%
0.7%
2.0%
5.7%
0.6%
0.9%
47.3%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
946,250
25,000
13,446
48,000
25,000
42,000
60,000
12,000
14,400
42,000
120,000
12,000
18,000
1,378,096
1,664,963
21%
12.1%
0.3%
0.2%
0.6%
0.3%
0.5%
0.8%
0.2%
0.2%
0.5%
1.5%
0.2%
0.2%
17.7%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,316,750
40,000
36,138
57,600
30,000
50,400
72,000
14,400
17,280
50,400
144,000
14,400
21,600
3,703,920
8,413,819
40%
6.3%
0.2%
0.2%
0.3%
0.1%
0.2%
0.3%
0.1%
0.1%
0.2%
0.7%
0.1%
0.1%
17.7%
$ 1,617,600
$
55,000
$
98,488
$
69,120
$
36,000
$
60,480
$
86,400
$
17,280
$
20,736
$
60,480
$
172,800
$
17,280
$
25,920
$ 2,337,584
$ 37,302,725
65%
$
$
$
3,600,000 6.3% $ 5,400,000 5.0%
5,400,000 9.5%
6,000,000 5.5%
$ 45,423,000 79.5% $ 94,197,600 86.7%
$ 2,700,000 4.7% $ 3,000,000 2.8%
$ 57,123,000 100.0% $ 108,597,600 100.0%
Cost of Revenue
Teaching Techniques DVD & Manual
Instructor Music & Choreography Up Sell
CD and Instructional DVD Production
Production of Movie DVD
Instructor Seminar Training Cost
Pkg & Dist Cost of Products Sold
Direct Response Marketing
Cost of Other Sales
Marketing & Promotion
Entertainment Website
Instructor Website
Total Cost of Revenue
Gross Profit
Gross Profit Percentage of Revenue
Operating Expenses
Payroll & Fringe
IDEA Convention
CEC Provider Costs
Office Lease
Insurance
Legal/Consulting
Accounting
Telephone & Utilities
Office Equipment & Supplies
Computer Hardware Costs
Information Tech Costs
Printing & Postage
Other
Total Operating Expenses
Profit
Profit Percentage of Revenue
483,750
15,000
3,000
40,000
15,000
35,000
50,000
10,000
12,000
35,000
100,000
10,000
15,000
823,750
(710,750)
-41%
2.8%
0.1%
0.2%
0.1%
0.1%
0.1%
0.2%
0.0%
0.0%
0.1%
0.3%
0.0%
0.0%
4.1%
$ 1,941,120
$
75,000
$
187,237
$
82,944
$
43,200
$
72,576
$
103,680
$
20,736
$
24,883
$
72,576
$
207,360
$
20,736
$
31,104
$ 4,444,024
$ 75,078,280
69%
1.8%
0.1%
0.2%
0.1%
0.0%
0.1%
0.1%
0.0%
0.0%
0.1%
0.2%
0.0%
0.0%
4.1%
22
HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
1 1st year est., then growth at
2 Assume % of Product Sales
3 See detail Seminar Spreadsheets
4 See Product Sales Table
5 Assumed % of Product Sales
6 Assumed % of Other Retail
7 See Payroll Table
8 See Internet Subscriptions Table
9 Estimates from 3rd Party Service Provider
20%
18%
50%
25%
Reasons to Invest
The following are several important reasons Hip Hop Kidz has a bright future, and we believe you
will be very pleased that you chose to help us make it possible:

Great youth programs like Hip Hop Kidz enjoy an ongoing, evergreen existence that provide for
a continuous revenue stream over many years; We participate in various growing and proven
entertainment and after-school markets. The kids market is an ever-expanding market,
increasingly enamored with hip hop music;

We have a fully developed portfolio of products, with some distribution already in place.

We have the ability to expand our tried and true, award-winning Hip Hop Kidz dance program
through a Training and Licensing program.

In this time of economic downturn and rising unemployment, more people will turn to starting
their own business, and therefore many will be drawn to our Instructor Training and Licensing
opportunity.
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN

We have a talented management team with vast experience with major Hollywood productions,
marketing and licensing, and hip hop dance programs and productions;

Our music publishing has great potential for exploitation across all media outlets;

Our ability to scale our operations over time maximizes our effective use of resources and cash
flow potential; providing superior ROI for investors;

We have an operational plan providing competitive advantages through scalability and cost
containment.
Risk Factors
We have taken care to limit the current and future risk to our stakeholders, financing sources, and
customers. There are however, several risk factors to this Business Plan that we have identified.
These include:

Limited History of Operating Losses – HHK Entertainment has a limited operating history. There
are no assurances that the company will be able to successfully generate profits in the near
future and successfully implement its business plan.

Imperfect Risk Mitigation – We have taken a proven hip hop dance program directed to kids and
developed a family of brand products. We have assembled a highly experienced and talented
team and established strategic partnerships. Therefore, we believe we have minimized the
inherit risks of a new business venture and are ready, with your help, to fully implement our
commercial launch on a national and international level. That said, there are still unknown risks
which could negatively affect these projected outcomes.

Competition – Products and services provided by HHK Entertainment are also provided by some
of the established and dominant competitors in the market place and may be copied by others.
This could result in downward pressure on our projected margins and competitive advantages.

Markets depend on the health of the economy – The market for entertainment and after school
products and services directed to kids as well as their parents are dependent on the ups and
downs of the economy.

Additional Equity Financing Required – This business plan requires HHK Entertainment to raise
$1.5 million over the course of the next few months. There are no assurances, however, that
we will be successful in raising the necessary equity capital, or that the capital raised will be
sufficient.

Rapid Revenue Growth – We are projecting to grow rapidly during the first five years after
funding. There are no assurances, however, that management will be able to assimilate this
growth and adequately manage that business and cash flow.
Disclaimer
This document is intended to provide a general guide only and does not deal with every important
development, legislative or regulatory requirement. It has not been independently verified. We
make no representation or warranties that it is complete or that it remains unchanged. You should
consult your professional advisors where appropriate and conduct your own inquiries and
investigations. It does not constitute legal, accounting, financial taxation, or investment advice, or a
commitment to arrange or underwrite any facility by HHK Entertainment, LLC. This information is
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HHK ENTERTAINMENT, LLC
STRATEGIC BUSINESS PLAN
intended only for the use of the addressee and is confidential. Disclosure, reproduction or use by
any person other than your officers, employees or professional advisors is strictly prohibited.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
Some statements in this document contain certain ―forward-looking‖ statements of management of
HHK Entertainment, LLC. Forward-looking statements are statements that estimate the happening
of future events are not based on historical fact. Forward-looking statements may be identified by
the use of forward-looking terminology, such as ―may,‖ ―shall,‖ ―could,‖ ―expect,‖ ―estimate,‖
―anticipate,‖ ―predict,‖ ―probable,‖ ―possible,‖ ―should,‖ ―continue,‖ or similar terms, variations of
those terms or the negative of those terms. The forward-looking statements specified in this plan
have been compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results, however, are
impossible to predict and no representation, guaranty, or warranty is to be inferred from those
forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in this plan
represent estimates of future events and are subject to uncertainty as to possible changes in
economic, legislative, industry, and other circumstances. As a result, the identification and
interpretation of data and other information and their use in developing and selecting assumptions
from and among reasonable alternatives requires the exercise of independent judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially from anticipated
or projected results, and, accordingly, no opinion is expressed on the ability to achieve those
forward-looking statements. We cannot guaranty that any of the assumptions relating to the
forward-looking statements specified in this plan are accurate, and we assume no obligation to
update any such forward-looking statements.
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