PROGRAMMING SERVICES, INC.
September 7, 1999
Gentlemen:
This company has engaged in the organization, construction, marketing and sale of a number of
TV studios and stations in the last 5 years. As such, we are recognized authorities on the value
of television station KPSP.
Palm Springs Television Studios, Inc. (PSTS) purchased KPSP Television on extremely
favorable terms. Said purchase allows the television station to remain in its present facilities
with PSTS as its landlord. Additionally, the ability to use its owner's television production
facilities located in-studio is of great present benefit to KPSP, as well as providing for future
programming expansion for the station. Specifically, and since the acquisition above
mentioned, said television station has expanded its programming by adding three live hours of
"Auctions Television" each Saturday and will shortly commence showing "Bingo Television"
five days a week for three hours a day. PSTS has also promised KPSP the right to exhibit an
international financial network show, which will embrace live world markets. Such a service
will provide twenty-four hour a day programming and advertising revenue therefrom for KPSP.
These additions in programming provide KPSP with a unique exclusive format niche which
targets an important element in the Coachella Valley, previously unserved.
Based on the foregoing, and in conjunction with our personal experience in the current TV
station trading market and after analyzing the physical assets of KPSP (a list of which is
attached hereto as an exhibit), we conclude that KPSP has a current value of 1.2 million dollars
($1,200,000). Indeed, we believe an aggressive marketing of said property could easily produce
a premium above the figure.
Programming Services, Inc.
(Signature on file)
By Chandos C. Mahon
President
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PROGRAMMING SERVICES, INC.
September 7, 1999
Gentlemen:
This company has engaged in the organization, construction, marketing and sale of a number of
TV studios and stations in the last 5 years. As such, we are recognized as authorities on the
value of such enterprises as Palm Springs Television Studios, Inc.
You have asked us to provide an appraisal of Palm Springs Television Studios, its production
facilities, equipment, programming and anticipated income streams. Such appraisals are based,
without independent verification, on the accuracy of all data provided to us by you.
Our appraisal is valid only for the purpose of helping you to determine the current market value
of your property. Any use or reliance by you, except for this purpose, and in connection with
possible litigation or third parties, is invalid.
We have attempted to determine "Fair Market Value," which is defined as the estimated amount
at which the business might be expected to be exchanged between a willing buyer and a willing
seller, neither being under compulsion, each having reasonable knowledge of all relevant facts,
with equity to both
An appraised value is based upon the number of assumptions and conditions that may not be
realized from the sale or liquidation of such assets or businesses, should the circumstances of
such sale or liquidation differ from such assumptions and conditions. Accordingly, no
assurance can be given that any particular value would actually be realized.
Our assumptions do, however, take into account such factors as longevity of earnings, quality
of, and demand for market and ratio of competitive stations to available dollars.
After an extensive evaluation, including a complete inventory of the equipment, which is
attached to this writing, it is our opinion that the value of the studio equipment is in excess of
$1,500,000. We also evaluated the two television programs: AuctionsTelevision currently
produced in your studios for a three hour timespan an every Saturday, as well as the
BingoTelevision program which is to air five days a week, three hours a day, coupled with your
unique concept of integrating these television shows with the Internet, a feat that clearly sets aside
from any other television program, and allows you to access income streams here to unknown to the
broadcasting community.
Palm Springs Television Studios purchased this property from a bankruptcy proceeding on very
favorable terms. We are making no investigations of and assumed no responsibility for the title
to the assets held by or any liabilities against the businesses appraised.
As a result of these innovations and the business plan associated with the income generated, and
the immense profit potential, we value the television content of your operations at $4,500,000,
thus giving Palms Springs Television Studios an aggregate value of $6,000,000.
Programming Services, Inc.
(Signature on file)
By Chandos C. Mahon
President
Corporate Headquarters
107 East Charleston Boulevard
Las Vegas, Nevada 89104
Phone: 702.678.5100 Fax: 702.868.3310
Los Angeles Office
21601 Devonshire Street, Suite 320
Chatsworth, California 91311
Phone: 818.709.2424 Fax: 818.709.2425
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