Contract analysis

I. PURPOSE This memorandum summarizes the key findings from the preliminary forensic accounting memorandum prepared by Tillerman Forensic Advisory LLC, dated December 19, 2022 (the "Tillerman Memo"). The Tillerman Memo was prepared by Greta Sørensen, CPA, CFF, Principal of Tillerman Forensic Advisory LLC, located at 350 South Grand Avenue, Suite 1480, Los Angeles, California 90071. Ms. Sørensen holds a license in goo

II. RSV INVOICE ANALYSIS A. Invoice Total: $2,694,500 Tillerman's team reviewed a total of 142 invoices issued by RSV to CMP during the period from July 2018 through June 2022. These invoices were sourced from CMP's accounts-payable files, which Tillerman obtained from Clearfield & Moss CPAs pursuant to Fonseca's authorization as a partner of CMP. Each invoice was catalogued by date, invoice number, film property, se

1. Duplicative Post-Production Supervision — $814,600 (37 invoices) The largest category of excess fees, totaling $814,600 across thirty-seven separate invoices, consists of charges described on the invoices as "post-production supervision" services rendered in connection with all four CMP film properties. These invoices purport to reflect fees for RSV's oversight and management of the post-production process for eac

2. Unsupported Festival and Distribution Services — $412,900 (18 invoices) The second category, totaling $412,900 across eighteen invoices, consists of charges described on the invoices as "festival and distribution services." These invoices purported to cover RSV's work in submitting the respective films to domestic and international film festivals, coordinating festival screenings, managing press and publicity in c

3. Miscellaneous Overcharges — $306,000 (remaining excess) The remaining excess of approximately $306,000 is distributed across various service categories, including production management, consulting, travel coordination, and general administrative support. These invoices, while describing facially legitimate service categories, reflect unit rates and aggregate charges that substantially exceed comparable market benc

III. REVENUE RECLASSIFICATION ANALYSIS In addition to the excess-fee analysis, Tillerman identified two discrete revenue reclassification events that further reduced the distributable profit pool available to Fonseca. Both events involved the transfer of confirmed domestic distribution revenue from the "distributable revenue" line of CMP's waterfall schedules to an "advance recoupment — Tranche B" line, without any l

IV. RECONSTRUCTED WATERFALL To quantify the aggregate financial impact of the excess management fees and the improper revenue reclassifications on Fonseca's distributions, Tillerman prepared a full reconstructed revenue waterfall for all four CMP film properties from inception through Q2 2022. This reconstructed waterfall is designated as Exhibit C to the Tillerman Memo and runs to eleven pages. The reconstructed wat

V. RECOMMENDATIONS Based on the foregoing summary of Tillerman's findings, I recommend the following action items for the litigation team's consideration. Each recommendation is designed to ensure that we maximize the evidentiary value of Tillerman's work and position our case for success at both the discovery and trial stages.

1. Discovery Priorities The Tillerman findings should be incorporated into our discovery plan upon filing the complaint. In particular, Tillerman's categorization of the excess invoices and the specific timing of the revenue reclassifications should inform the scope and specificity of our initial document requests and interrogatories. As a priority matter, we need to obtain RSV's bank records. Tillerman's analysis tr

2. Deposition of Howard Moss, CPA We should schedule and take the deposition of Howard Moss, CPA, of Clearfield & Moss CPAs, located at 9100 Sunset Blvd., Suite 220, West Hollywood, California 90069, at the earliest opportunity following the close of initial written discovery. Moss served as the Partner-in-Charge of CMP's engagement at Clearfield & Moss and was directly responsible for the preparation of CMP's quarte

3. Expert Testimony Greta Sørensen has indicated that she is prepared to testify as an expert witness at trial if necessary. Her estimated trial-preparation and testimony fees are in the range of $45,000 to $55,000, which is consistent with the rates typically charged by forensic accounting experts of comparable experience and qualifications in the Los Angeles market. Ms. Sørensen's qualifications — including her CPA

4. Pre-Judgment Interest Tillerman's analysis does not include a calculation of pre-judgment interest on the $1,309,385 shortfall. This is consistent with the scope of Tillerman's engagement, which focused on the forensic accounting analysis rather than the legal calculation of recoverable damages. Based on our own preliminary estimate, applying California's statutory pre-judgment interest rate of 10% per annum (Cal.

5. Coordination with Pleading The complaint should incorporate Tillerman's findings throughout the factual allegations and damages sections. Specifically, I recommend the following approach: (a) The factual allegations should describe the three categories of excess management fees identified by Tillerman — duplicative post-production supervision ($814,600), unsupported festival and distribution services ($412,900), a