Dick Foster Productions, Inc. and
Creative Productions, Inc.

Combined Financial Statements

For the Year Ended November 30, 2006

Dick Foster Productions, Inc. and Creative Productions, Inc.
Index to the Combined Financial Statements
November 30, 2006


		Page

Independent Auditors’ Report			1

Combined Financial Statements

	Combined Balance Sheets		2

	Combined Statement of Operations and Retained Earnings		3

	Combined Statement of Cash Flows		4

	Notes to the Combined Financial Statements		5-9



380 Foothill Road • P.O. Box 6483 • Bridgewater, NJ 08807-0483
Phone: 908-231-1000 • FAX: 908-231-6894
Website; www.rrbb.com • E-Mail: info@rrbb.com


Carl S. Schwartz, CPA* David N. Roth, CPA Steven J. Truppo, CPA Leonard M. Friedman, CPA+* Gary A. Sherman, CPA* Roberl S. Quick, CPA Pamela Bezner Ali, CPA Marshn L. Baldinger, CPA, CFP*• Howard R. Condo, CPA		Independent Auditors’ Report

Aaron A. Rich, CPA• Alvin P. Levine, CPA+		To the Board of Directors and Stockholders of
		Dick Foster Productions, Inc. and Creative Productions, Inc.
Daniel M. Brooks, CPA

* NJ and NY + NJ and FL
• NJ, NY and PA • Accredited in Business Valuation + Certified Business Appraiser * Certified Financial Planner		We have audited the combined balance sheets of Dick Foster Productions, Inc. and Creative Productions, Inc. as of November 30, 2006 and 2005, and the related combined statements of income and retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

Other Office:

111 Dunnell Road Maplewood, NJ 07040 973-763-6363 973-763-4430 Fax		We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.

		In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Dick Foster Productions, Inc. and Creative Productions, Inc. as of November 30, 2006 and 2005, and the combined results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.



		Bridgewater, New Jersey June 20, 2007

AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CENTER FOR PUBLIC COMPANY
AUDIT FIRMS PRIVATE COMPANIES PRACTICE SECTION • POLARIS INTERNATIONAL
REGISTERED WITH THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

Dick Foster Productions, Inc. and Creative Productions, Inc.
Combined Balance Sheet
November 30, 2006

Assets
Current Assets
Cash	$	159,736
Accounts receivable		96,510
Prepaid taxes		23,756
Deferred production costs		77,157
Deferred income taxes		122,000
Other current assets		29,448

Total Current Assets		508,607


Property and Equipment
Property and equipment		228,496
Less: accumulated depreciation		(148,256	)

Net Property and Equipment		80,240


Other Assets
Deposits		3,231

Total Other Assets		3,231


Total Assets	$	592,078

Liabilities and Stockholders’ Equity

Current Liabilities
Accounts payable	$	36,315
Accrued expenses		197,433
Deferred revenue		80,000
Current portion of long term debt		8,247


Total Current Liabilities		321,995


Long-Term Debt		13,934

Stockholders’ Equity
Common stock		25,000
Paid in capital		185,545
Retained earnings		45,604


Total Stockholders’ Equity		256,149


Total Liabilities and Stockholders’ Equity	$	592,078

See notes to the combined financial statements.

Dick Foster Productions, Inc. and Creative Productions, Inc.
Combined Statement of Operations and Retained Earnings
For the Years Ended November 30, 2006 and 2005

	2006			2005


Revenues	$	5,601,576		$	5,201,009


Expenses
Cost of revenues		3,132,598			2,849,544
General and administrative		2,518,028			2,275,488

Total Expenses		5,650,626			5,125,032


Income (Loss) From Operations		(49,050	)		75,977


Other Income and (Expenses)
Interest income		23,109			18,532
Interest expense		(1,529	)		(1,231	)
Other income (Expense)		—			4,428

Total Other Income and (Expenses)		21.580			21,729


Income (loss) before provision for income taxes		(27,470	)		97,706

Provision for (Benefit from) income taxes		(9,099	)		2,365


Net Income (Loss)		(18,371	)		95,341

Retained Earnings (Deficit), beginning of year		63,975			(31,366	)


Retained Earnings, end of year	$	45,604		$	63,975

See notes to the combined financial statements.

Dick Foster Productions, Inc. and Creative Productions, Inc.
Combined Statement of Cash Flows
For the Years Ended November 30, 2006 and 2005

	2006			2005

Cash flows from operating activities
Net Income (Loss)	$	(18,371	)	$	95.341

Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		25,093			21,305
Interest on note receivable		—			(6,476	)
Deferred income taxes		(10,000	)		—
(Increase) decrease in assets
Accounts receivable		(64,228	)		(18,744	)
Prepaid taxes		(510	)		8,701
Deferred production costs		82,725			164,882
Other current assets		(26,448	)		—
Increase (decrease) in liabilities
Accounts payable		(19,753	)		(50,743	)
Accrued liabilities		(92,366	)		(42,377	)
Deferred revenue		(146,654	)		(173,632	)


Total adjustments		(252,141	)		(97,084	)


Net cash used in operating activities		(270,512	)		(1,743	)


Cash flow from investing activities:
Cash payments for the purchase of property		(9,370	)		(35,777	)
Cash proceeds from repayment of notes receivable		124,937			—


Net cash provided by (used in) investing activities		115,567			(35,777	)


Cash flow from financing activities:
Principal payments on long-term debt		(11,076	)		(1,581	)


Net cash used in financing activities		(11,076	)		(1,581	)


Net decrease in cash and equivalents		(166,021	)		(39,101	)

Cash and equivalents, beginning of year		325,757			364,858


Cash and equivalents, end of year	$	159,736		$	325,757


SUPPLEMENTAL DISCLOSURE OF CASH PAID FOR:
Interest	$	1,529		$	1,231

Income taxes	$	901		$	2,365

See notes to the combined financial statements.

Dick Foster Productions, Inc. and Creative Productions, Inc.
Notes to Combined Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Activities

	Dick Foster Productions, Inc. and Creative Productions, Inc. (the “Company”) produce and perform stage shows for Casinos located in Las Vegas and other venues.

Principles of Combination

The combined financial statements include a wholly owned subsidiary, Dick Foster Productions, Inc. (A California Corporation). The subsidiary had no activity during the year ended November 30, 2006 and 2005 and during combination all the account balances were eliminated. The combined financial statements also include the accounts of Creative Productions, Inc. All significant intercompany transactions have been eliminated.

Revenue and Cost Recognition

	The Company enters into production agreements to produce and perform various stage shows. Revenues associated with the initial development of the production are amortized over the life of the production contract. Revenues earned from the performance of the shows are recognized as the shows are performed. Costs associated with the shows are expensed as incurred.

Deferred Production Costs

	Deferred production costs are costs incurred by the Company in the initial development of a production and are amortized over the life of the production contract.

Cash and Cash Equivalents

	The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Property and Equipment

	The cost of property and equipment is depreciated for financial reporting purposes on a straight-line basis over the estimated useful lives of the assets: five years for computer equipment and software, five years for office furnishings and five years for automobiles. Repairs and maintenance expenditures which do not extend the useful lives of the related assets are expensed as incurred

Use of Estimates

	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Income Taxes

The Companies, with the consent of its shareholders, have elected under the Internal Revenue Code to be S Corporations. In lieu of corporation income taxes, the shareholders of an S Corporation, and partners of a partnership, are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in these financial statements.

Dick Foster Productions, Inc. and Creative Productions, Inc.
Notes to Combined Financial Statements

	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Risk and Major Customers

	At times throughout the year, the Company may maintain certain bank accounts in excess of FDIC insured limits.

	The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. The Company does not believe an allowance for doubtful accounts is necessary at this time.

	For the years ended November 30, 2006 and 2005 the Company had one major customer accounting for 96% and 99% of the total earned revenues, respectively.

Fair Value of Financial Instruments

	The carrying amounts reported in the balance sheet as of November 30, 2006 for accounts receivable, other current assets, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.

	Fair value estimates are made at a specific point in time, based on the terms of the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

PROPERTY AND EQUIPMENT

	A summary of property and equipment and the related depreciation expense is as follows:

	November 30, 2006

Computer equipment and software	$	58,580
Office furnishings		69,946
Trucks and automobiles		99,970

Total Costs		228,496
Accumulated depreciation and amortization		(148,256	)

Net Property and Equipment	$	80,240

Depreciation expense for the years ended November 30, 2006 and 2005 amounted to $25,093 and $21,305, respectively.

Dick Foster Productions, Inc. and Creative Productions, Inc.
Notes to Combined Financial Statements

OPERATING LEASES

	The Company leases automobiles and office equipment with monthly payments totaling $2,429 per month expiring at various dates through April 2008. The Company rents its office space from a company owned by the shareholders requiring a monthly payment of $12,990 through December 2010. The Company also rents storage space expiring in 2006.

	Minimum future lease payments as of November 30, 2006 are as follows:

Operating Leases

2007	$	179,124
2008		161,926
2009		155,880
2010		155,880
2011		12,990

	$	665,800

Total rents paid under all operating leases during the year ended November 30, 2006 and 2005 was $194,627 and $105,738, respectively.

RETIREMENT PLAN

The Company has a qualified profit sharing plan covering substantially all full time employees. Employer contributions to the plan are discretionary and are determined annually by the Board of Directors. The contribution for the year ending November 30, 2006 and 2005 were $104,053 and $221,414, respectively.

LONG-TERM DEBT

Long-term debt is summarized as follows:

Note payable, bank, at 5.5% due in monthlyinstallments of $479 through July 2007, secured by an automobile	$	18,750

Note payable, bank, at no interest, with principal only payments of $572 monthly through April 2007, secured by a truck		3,431

		22,181
Less: current portion		8,247

	$	13,934


	The future maturities of long-term debt are as follows:

Years ending November 30,
2007	$	8,247
2008		5,091
2009		5,378
2010		3,465

	$	22,181

Dick Foster Productions, Inc. and Creative Productions, Inc.
Notes to Combined Financial Statements

COMMON STOCK

	The following details common shares authorized, issued and outstanding, par value and the combined capitalization for the companies:


	Number of Shares

	Authorized		Issued and Outstanding		Par Value		Amount


Dick Foster Productions, Inc.		25,000		25,000	$	1.00		25,000
Creative Productions, Inc.		5,000		5,000		None		—

							$	25,000

INCOME TAXES

	The Company files a combined tax return with an wholly owned subsidiary, Dick Foster Productions, Inc., A California Corporation for Federal and the State of New Jersey tax purposes. Dick Foster Productions, Inc., A California Corporation, files a separate return for the State of California. Creative Productions, Inc. files a separate federal and state income tax return.

	The income tax provision (benefit) is comprised of the following:


	Federal			State			Total

Year Ended November 30, 2006
Current	$	—		$	901		$	901
Deferred		(7,100	)		(2,900	)		(10,000	)

	$	(7,100	)	$	(1,999	)	$	(9,099	)


Year Ended November 30, 2005
Current	$	—		$	2,365		$	2,365
Deferred		—			—			—

	$	—		$	2,365		$	2,365

Dick Foster Productions, Inc. and Creative Productions, Inc.
Notes to Combined Financial Statements

INCOME TAXES (Continued)

	The Company’s deferred tax asset as presented in the Company’s financial statements is comprised of the following temporary differences at November 30, 2006:


Deferred Tax Asset
Deferred production costs	$	27,000
Net operating losses		123,000

Total Deferred Tax Asset		150,000

Deferred Tax Liability
Deferred revenue		(28,000	)

Total Deferred Tax Liability		(28,000	)

Net Deferred Tax Asset		$ 122,000


	At November 30, 2006 the Company had net operating loss carryforwards available for Federal and California expiring as follows:


Year of Expiration	Amount

2021	$	171,000
2024		152,000
2025		28.000

Total	$	351,000


SUBSEQUENT EVENTS

	In February 2007, the shareholders of Creative Productions Inc. transferred all of the issued and outstanding stock to Dick Foster Productions, Inc., thereby making it a wholly owned subsidiary.

	On February 28, 2007 80% of the Company common stock was acquired by Sibling Theatricals, Inc.

Sibling Entertainment Group, Inc. 8-K/A