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Combined Business Introduction

Quatrophonic Entertainment Group
Quatrophonic Music Corporation
Q Records Company
Quatro Records, Ltd.

An Interactive Music E-Commerce Company
(A Third Stage Co.)

Quatrophonic Music Corporation (QMC) is an INDEPENDENT record company that turns recording artists into global stars.  We sell our products worldwide.  QMC, through its internet division, sells music, music videos and mini-movies on via world wide web.  We  have our feet in the door of downloadable products with proprietary software from NAMS, Inc. and will permit internet "radio" play of released singles via streaming audio.

Quatrophonic Music Corporation is a combined entertainment and new technology media company.  The company owns, acquires, produces, records and makes music videos on new and emerging recording artists.  The company also takes the "hit" catalogs and compilations of other artists and markets them in unique ways.  Quatrophonic mass markets and sells its products internationally, using all available traditional exposure mediums, new mediums and distribution channels.  Quatrophonic sells its products through traditional retail record and video outlets nationally and internationally countries.

Quatrophonic's Internet Division provides "direct-to-retail" product sales to worldwide consumers.  Whether involving our signed artists or those from "sub-labels," we can provide complete marketing and promotion services for music genres.   Quatrophonic also licenses and sells the right to use the exclusive NAMS download system to other record companies and artists.

             Quatrophonic Music Corporation has ownership of copyrighted content with both a traditional and an internet delivery and exposure and sales system.

    "Hollywood meets Silicon Valley" reflects the marriage of entertainment and high technology, described in Red Herring Magazine (Feb., 1996).  Quatrophonic Music Corporation is an Independent distribution/multiple sales vehicle, MTV outlet and star-maker.

Quatrophonic Music Division
The Company
 

"We Make Products That Become Immortal!"

Quatrophonic Music was formed in June 1995, we have since expanded into two labels (QT Records and Quatro Records).   The purpose of the company is to produce and distribute quality music and videos.  If we do our job well, our products will reflect our complete dedication to our artists and products.  Once produced, we will use our national and international distribution systems to place our products in retail outlets that include small "Mom & Pop" stores as well as major chains and wholesalers throughout the world.

The company utilizes traditional products such as compact discs, cassettes and LP's and music videos as well as new technology products including MP3 and our own  NAMSnet software.  Our artists themselves are technologically sophisticated, see Pam West's web site, Pamela West.

Global Exposure/Growth
(Any consumer, anywhere, can listen and watch, anytime)

The Company uses a combination of all traditional retail media, as well as modern marketing tools (such as the Internet) to seize the new world markets and increase sales.  Aside from traditional artist and label contracts owned by the company,  we also license well established artists for special products

The Company will focus it's greatest resources and concentrate it's highest creative and marketing priorities on developing a limited number of new artists each year in order to maximize potential sales and profits.   The artists chosen for development are targeted toward proven popular demographic segments and undiscovered niche markets.  Are products will be designed to reach the optimal demographic section of the world music buying public for each individual item.  Already signed, and in production, are artists categories of commercial alternative rock, urban & street, modern rock, attitude and pop female vocalists, hip hop and jazz.  The Company has designed an innovative marketing campaign for each particular album and product.

The Company will continue to acquire undiscovered new and emerging talent.  The Company will implement this business strategy by capitalizing on the experience and contacts of the Company's senior management and advisors in the music industry.  In this context, a "new" artist is defined as an artist who has not recorded an album for a record company, or engaged in a performance intended to promote the artist, or the artist's recordings.  An "emerging" artist is defined as an artist who has recorded an album, or has experienced modest commercial success.  These artists, though talented, are not demonstrated generators of significant sales; therefore, their services can generally be acquired by a recording company on a long term basis at a relatively low royalty rate and modest advance.

Through a customized program of print and broadcast media, the internet and live performance exposure, the Company will enhance both the artists' popularity and longevity.  We aim to position our artists to attract sufficient promotional and exposure opportunities to increase the likelihood of the artists sell-though and long term success.

The Company will focus much of its resources on the marketing of it's products.  After a vigorous testing period on each product, the company will spend marketing dollars at a ratio of seven to one - up to $7.00 of marketing expense for every $1.00 of production costs.  The formula has proven extremely successful when applied by independent labels.  Touring and concerts together with  a cost effective internet exposure and TV media will assure public awareness of each product and artist.

The Company has also established distribution partnerships in eighty-seven counties, for selected products.   Quatrophonic will focus particularly, on South East Asia, Eastern Europe, South America, and China.  These counties represent the fastest growing markets with an excess of 2.5 billion new consumers emerging in the market place.  The Company, it is important to note, controls or owns the world-wide publishing, performing, management, copyrights and merchandising rights on most of it's artists.

The Company is the only internationally distributed INDEPENDENT Record company east of L.A. and west of New York.  Previously distributed by MS Distributing, one of the Big 7, we are about to announce major and exciting news concerning new national distribution of our products.  Front line products will be positioned to take advantage of a $250,000 marketing push, while other products will begin regionally but still receive national distribution upon demonstration of the ability to sell-through.  Our tiered distribution system further safeguards our marketing resources while allowing us to target our products more precisely.

Founder's Experience

Our two labels, QT Records and Quatro Records were formed to take advantage of the unique, global relationships developed by Michael Quatro.  Throughout his decades of experience as a promoter, artist and record executive, Michael has established a worldwide network of contacts.  This network was partially established over the course of sixteen years through release of nine "Michael Quatro" albums in 60 countries.

Michael was signed to many major labels (United Artists, SRI/Capital, Phonogram, and Roulette), and is one of two Caucasian artists ever to sign and release two albums for Motown.  His personal record sales are in excess of 5 million units.  He enjoys publicity and exposure attendant to his "star" status.  Quatro's concert, TV, radio, and newspaper appearances and his 20 million live audience fans, and multinational industry executive friendships have further developed since 1965.  United States based artists, who have been released globally, number 5,000 per year with fewer than 2,500 lasting past two albums.  Only a handful of aritists/executives become known globally.  Since 1968, Mr. Quatro has received over forty-eight industry gold and platinum awards.

Senior Management/Advisors

The Company also benefits from a diverse and experienced board and staff.  This marquee staff has many years of experience working with companies such as SONY/EPIC/CBS, MCA, EMI, CAPITAL and PILZ (a multinational German CD manufacturer and other overseas conglomerates).

Michael Diamond - is currently a partner in an entertainment business law firm.  For the last twenty years, Mr. Diamond has been active in radio promotion throughout the U.S. for major labels such as Warner, MCA, Capital, Geffen, Atlantic, Epic, Sony and others.  He has been personally involved in the career development of such artists as Michael Jackson, Madonna, Mariah Carey, Van Halen, Billy Idol, REM, Bob Seger, Kenny G, and countless others.

Ronald Alexenburg is consultant to Quatrophonic in the areas of sales, marketing and promotional campaigns.  Mr. Alexenburg's achievements include many industry awards.  He was formerly the president of EPIC Records and took that label from $6.5 million to over $185 million in sales during his tenure.  He personally signed and developed twenty five new artists in seven consecutive years including such luminaries as Michael Jackson, Meatloaf, Heart, Boston and Charlie Daniels.  His continued involvement with the music industry includes affiliations with MCA, and consultation to Rupert Murdoch, Turner Broadcasting, the 1996 Olympics and the Beach Boys.  Additionally, Mr. Alexenburg teaches music and promotion at New York University.

Joseph E. Antonini - Chairman of J.E.A. Enterprises, is a significant equity investor in Quatrophonic Music and "NAMS".   Mr. Antonini's abilities elevated him from management trainee at Kresge to the position of CEO at Kmart, which at its peak did 39 billion dollars in revenues in 4,000 retail and specialty operation stores along with record profits.  He currently serves on the board of Shell Oil, American Sensors, Inc., American Speedy Printing, and formerly Chrysler.  He advises and provides direction to several companies and organizations to increase sales, profitability and acquisitions.  Mr. Antonini has no active management role or other current involvement with the Company.

Ronald P. Sandler - Executive Vice President, General Counsel.  After graduating first in his law school class in 1981 (The Detroit College of Law at Michigan State University), Ron entered into a litigation practice.  Building on degrees from Wayne State University and the University of Michigan, Ron developed a sophisticated business practice with emphasis on complex commercial transactions and human resource policy.  Ron is the chief operating officer of Quatrophonic and handles contract negotiation, drafting and administration as well as finance.

Quatrophonic Music Corporation - 1998 Release Schedule

Album # 1

"Speed Caesar"  --   Alternative Modern Rock - 
                                     Crossover demographics
In stores Now

Album # 2

"Quatro Compilation"
Established Artists, best of CD     Guest Stars (Legendary),
Never Before Available                    Nugent, Parker, Derringer
Anywhere

Album # 3 

"Natasha"       Young Female Alternative Rock

Album # 4    

"Vision" - Michael Quatro            Special Marketing - VHI,
CD/Video/CD Single                    Established artist

In stores Now

Album # 5 

"Cap Ivory & DeDe"        Hip Hop/Soul/Funk
                                           R&B/Spilven Music
 

Album # 6 

"Muruga" Compilation          Toy Drum/CD/Compilation
Legendary Drummer            Featuring Jerry Garcia ("Grateful
                                                  Dead") & Other Stars (Clinton, 
                                                  Jimi Hendrix, Santana)

Album # 7 

"Urban Gypsys"                                   Street Record

In Stores Now

Album # 8 

"Senator O'Brien"                LA/Punk/Blues/Alternative Rock
                                                "Cutting Edge Music"

Album # 9 

"Car Wash" & Video     Redo of Hit Movie

Album # 10 

"Compilation"                            Hip Hop/Jazz/Christmas
 

Album # 11                          Ethereal Rock 

"Dweller on the Threshold" - Pamela West 

In Stores Now

Album #12                        New Age Jazz 

"Future" - Randy Scott 

In Stores Now

Consumer and Delivery

New Technology

QUATROPHONIC MUSIC has from the start, patterned itself similarly to the three largest independent labels from 1970 to 1990; A&M, Virgin and Geffen records.   It's strategies combine the best qualities of traditional growth in all specific cases.  Independent Labels now account for 1/4 of all domestic sales and 1/3 of world sales.

    Overseas Growth/New Technology:    To achieve overseas sales, Quatrophonic has entered into distribution agreements with territorially dominant partners in 87 counties.  Having partnerships with companies such as Samsung in Korea, Quatrophonic Music is well on it's way to achieving this goal.   All current contracts have higher-than-average royalty rates and lower pressing costs than industry norms.  Traditional sales and marketing techniques, combined with the "NAMS" on-line video technology and delivery systems, provide Quatrophonic with access to the emerging internet consumer market.  Additionally, Quatrophonic's overseas partnerships will provide access to the 2.5 billion consumers in third world countries who are beginning to demand music and video products.

    Guiding Visionary/Marquee Staff:     There is a guiding creative visionary not unlike David Geffen, Herb Alpert or Walt Disney at the helm of Quatrophonic.  Only with such a person to discover, pick and choose, unique-and-exploitable talent and projects can an independent label hope to achieve the level of success necessary to take a company public.  Additionally, Quatrophonic has attracted an experienced staff, board of directors, and advisors with an excess of 160 years of combined experience.   A&R, promotion and marketing positions have all been filled with youthful staff so as to have a finger on pulse of the industry.

    Secure Finances/Multiple Products:    A capital budget, based on the infusion of capital from an our Regulation D Rule 506 private placement, has been allocated for marketing and production.  This budget and our corporate plan assures a steady stream of products for the world markets.  Nine to twelve albums, related singles, and videos are planned per annum with a three to five year shelf life on each product.

    Long Term Acts/Ancillary Rights:     Quatrophonic signs and builds long term career artists, not "One Hit" acts.  Quatrophonic contracts generally are for a minimum of seven albums and seven year deals, and include publishing, merchandising, and management overrides.   Ancillary rights include movie sound tracks, compilations, and a publishing division.  Quatrophonic has obtained trademarks and owns all copyrights, most band and artist names, merchandise, logos and songs.

    Product Cost Containment/Maximum Marketing Effect:      Our operational plan  takes advantage of the company's strategic partnerships.  These partnerships, and the use of emerging recording technology, allows Quatrophonic to enjoy production costs which are 50% below industry averages (see graph below).  Additionally, our marketing pland start with limited cost, regional testing utilizing both traditional and high-tech approaches.  Each plan is custom tailored for the particular product.  As a product's sales increase, marketing expenses are increased, eventually reaching a ten to one ratio of marketing to production expense..  To further contain costs, senior management compensation is structured towards bonuses based on the company's success rather than large base salaries.  Through the use of all these techniques our exposure on unsuccessful products is limited.

    Royalty Cap/Higher Profit Margin:    We are an artist centered company and pay competitive royalties.  Since we are also in the business of discovering talent, our royalty costs are reduced because of the lack of a track record of these emerging stars.  Our competitive advantage allows for aggressive product pricing.

    Long Term Growth Strategy:    The company has formulated plans to capitalize on it's early growth through a second tier underwriting as soon as it's asset base allows.  The funds generated through this IPO will be utilized to enter into the production of first run motion pictures.  Two full length features per year are planned.  Quatrophonic will enjoy total ownership of all world audio, video, and publishing copyrights and masters.   The company will enter into distribution agreements with feature film distributors.   The movie sound track driven "hit" records are now approaching 20% of the total record business sales.  Additionally, the "NAMS" technology and Web site will be further developed in order to market all of the company's products to consumers world wide.

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Accredited investors may receive the link to our online Private Placement Memorandum and Business Plan.  Contact the Company by telephone or email and upon qualification, the links will be provided.  Sorry, governmental regulations prohibit the general solicitation of investors via the world wide web.

Email us:  Ron Sandler

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