Digital Cinema: Transforming The Moviegoing Experience          

Bud Mayo, Chairman/CEO      Digital Cinema Destinations Corp.       

     ACG New Jersey Breakfast Meeting               

November 16, 2010

Strictly Confidential

Notice

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Statements included in this presentation, which are not historical in nature, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act''). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects'', "anticipates'', "intends'', "plans'', “could”, “might”, "believes'', “seeks”, "estimates'' or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by the management of Digital Cinema Destinations Corp. d.b.a. Digiplex Destinations (“Digiplex”), are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about Digiplex, its technology, economic and market factors and the industries in which Digiplex does business, among other things. These statements are not guarantees of future performance and Digiplex has no specific intention to update these statements. This presentation shall not constitute an offer to sell nor the solicitation of an offer to buy the common stock nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state.

This presentation is strictly private and confidential; it is being furnished to you solely for your review and may not be reproduced or redistributed, in whole or in part, directly or indirectly, to any other person. This presentation may contain general, summary discussions of certain company, industry, tax, investment regulatory, accounting and/or legal issues relevant to the contemplated transactions. Any such discussion is necessarily generic and may not be applicable to or complete for any particular recipient's specific facts and circumstances. Neither Digiplex nor EFA Partners (“EFA”) offer and purport to offer, tax, investment, regulatory, accounting or legal advice, and this information should not and cannot be relied upon as such. Neither Digiplex nor EFA make any warranties or representations of any kind with respect to the attached information. In no event shall Digiplex or EFA be liable for any use of or reliance on such information, or for any inaccuracies or errors in such information and all analysis is considered preliminary. Valuation, borrowing availability, and projected results are subject to a more thorough examination of historical and current financial information.

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Film Exhibition Industry

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Film Exhibition Overview

Industry in Midst of a Significant Technology Conversion

• Film industry still dominated by major studios− Major studios distribute ~82% of domestic films (Fox, WB, Disney, Universal, Sony,

Paramount)− Mini-majors represent ~13% (DreamWorks, Lionsgate, Summit, Weinstein, MGM)− Content is key driver with studios seeking strong franchises for revenue growth

• Exhibition industry remains strong− Over 39,000 total screens in the U.S. with top ten theatre circuits operating ~55%− The next ten operators represent ~6%− The remaining 16,000+ screens are operated by 749 different operators with circuits ranging

from 1 to 180 screens − Patrons consider movies as relatively inexpensive entertainment making the industry resilient

to recessionary pressures with 2010 domestic box office 3.4% ahead of 2008 and 2009 record years

• Conversion to digital − Industry is in the process of converting from showing films using 35mm projectors to using

digital projectors− Conversion ongoing internationally and is capital intensive− Provides benefits across the industry

35mm Projector

Digital Projector

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Studio Market Share

Major Studios Distribute Over 80% of Film Product

Warner Brothers

17%

Fox16%

Paramount15%NBC Universal

13%

Sony 11%

Disney 10%

MGM/UA2%

DWs SKG3%

Lionsgate 7%

Summit 1%

Weinstein 1%

Indies4%

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Domestic Theatres

Source: Box Office Mojo

55% of Screens Owned by Top Ten; Tier II Exhibitors at 16%

55%

16%

  No. of Market

  Screens ShareRegal Entertainment 6,388 16.4%AMC Entertainment 5,605 14.4%Cinemark 3,687 9.5%Carmike Cinemas 2,341 6.0%Rave Motion Pictures 1,035 2.7%Marcus Theatres 678 1.7%Hollywood Theatres 536 1.5%National Amusements 457 1.2%Harkins Theatres 432 1.1%

Dickinson Theatres 346 0.9%

Top Ten 21,505 55.1%Malco Theatres 320 0.8%Georgia Theatre Company 275 0.7%Great Escape Theatres 274 0.7%Goodrich Quality Theatres 271 0.7%Southern Theatres 268 0.7%Clearview Theatres 250 0.6%Landmark Theatres 228 0.6%Starplex Cinemas 226 0.6%Cobb Theatres 204 0.5%

Marquee Cinemas 190 0.5%

Next Ten 2,506 6.4%

40+ Exhibitors with 50 to 180 Screens

~3,900 10.0%

All Other Exhibitors ~ 11,090 28.4%

Source: NATO Encyclopedia of Exhibition

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Annual Box Office Comparison

2010 Domestic Box Office is 2.9% Ahead of 2009 Record Year

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

YTD 2010 2009 2008 2007 2006

$8.78 $10.60

$9.63 $9.66 $9.21

Source: Box Office Mojo through November 1, 2010

Gro

ss

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x O

ffic

e

Sa

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, in

bil

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Exhibition Recession Analysis in U.S.

RecessionPeriod

Box Office Has Performed Well During Recessions

Jan-

65

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Avera

ge T

icket Pri

ce ($)

Box O

ffice

Revenues

($Bs)

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endance

(Bs)

Box Office Revenues

Tickets Sold

Average Ticket Price

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Box Office Trends With New Competition

• * Red bar indicates a recession year.

• CableVCR

InternetDVD

5.3% Box Office CAGR (1970-2009E)

U.S. Box Office (in billions)

5.3% Box Office CAGR (1970-2009)

1.1% Admissions

4.1% Ticket Prices

Commercial Penetration of New Media Forms “Competing” With Box Office:Cable

Continued Box Office Growth Despite Introductions of New Video Media

2009

Source: SNL Kagan

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Digital Cinema Overview

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Digital Cinema Background

Digital Projector

Digital 3-D

Satellite Film Delivery

Sports in Theatres

• Digital cinema is the use of digital technology to distribute and project films.− The most common medium for projecting films today is 35mm− The industry is seeking to convert to digital projectors; primary benefits are significant

decreases in distribution cost for film studios and increased revenue opportunities for movie theatre operators

− Digital process involves sending digital prints utilizing satellite or hard drive to theatres equipped with digital projectors, servers and software applications

• To date, over 11,000 screens have been converted (cost at ~$70,000 per screen)− With ~39,000 screens in U.S. and ~110,000 worldwide, financing need exceeds $2.8 billion and

$7.8 billion, respectively− First major conversion was Cinedigm’s deployment of 3,724 digital screens utilizing a $217

million debt financing led by GE Capital and $93 million of equity raised by Cinedigm. − Digital Cinema Implementation Partners (DCIP) closed a $660 million facility earlier this year

for converting ~10,000 of Regal, AMC and Cinemark’s 15,000+ screens

• Digital cinema provides platform for 3-D films and alternative theatre content− 3-D films have been yielding an average ticket price premium of $2 to $5− 3-D screens have been yielding ~2-3x the attendance of 2-D screens− Digital cinema allows showing of other content such as concerts and sports

Conversion Progressing with Significant Financing Needed

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Digital Cinema Conversion Progress

Cinedigm and DCIP Are Only Large Scale Transactions

• Conversion cost being paid from various sources− Senior debt financing primarily based on virtual print fee (“VPF”) payments made by studios each time a

digital print is delivered to a theatre screen− Exhibitors pay one-time up-front fee that includes equipment installation costs− Vendors have provided limited equipment financing and/or mezzanine financing− Equity is more difficult to raise since returns are lower than normally expected

• Conversion process has been slower than expected− Negotiations for studio agreements to pay virtual print fees were prolonged− Most major studio agreements finalized in late 2008, which was unfortunately when the capital markets

collapsed. This delayed any related financings for over a year.

• Transactions− Cinedigm announced a commitment from GE and Societe Generale for a $100 million senior debt facility to

convert approximately 2,100 screens. (This transaction has yet to close.)− As previously mentioned, DCIP closed on $660 million for Regal, AMC and Cinemark earlier this year

(JPMorgan led debt process; Blackstone led equity raise)− Sony is also converting screens− International conversions continue in Europe and Asia with groups such Arts Alliance and GDC

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Digital Cinema Delivery Process

TheatreServers

And Projectors

Screen

2

Screen

1

Screen

3

• Encrypted digital film print received by theatre operating systems either via satellite or hard disk

• Encryption keys sent separately for security purposes

• Reporting of each film’s usage for theatre circuits and film studios through the use of digital cinema software

Satellite Uplink

or

Hard Disk

Delivery Administration

and Reporting

Post-Production Site Theatre Site

• Post-production site receives 35mm film or digital film from studio

• Final film mastering is completed and digital film print is created

• Digital film print sent to theatres via satellite or hard disk drive

Studio

2

Studio

1

Studio

3

Administration

and Reporting

DigitalFilm Print

DigitalFilm Print

Digital Master

ProducedFilm

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Digital Cinema Benefits

• Primarily distribution cost savings - estimated at ~$1 million per movie with such amount increasing after equipment financing is repaid

• Improved security measures against piracy

• Faster and easier delivery via satellite or hard drive

• Ability to capitalize on release of 3-D movies

• 3-D presentation: Marketing differentiator and ability to charge higher ticket price

• Ability to present alternative content (e.g. concerts, live sports events)

• Operating flexibility to more easily move films among screens

Studio Benefits Theatre Benefits

• Reduced time needed from post-production to release

• Sharper image allows for advanced special effects

Film Maker Benefits• Improved experience as digital easily enables 3-D

content and alternative content

• Better resolution with no deterioration in quality over time

• Large view format for alternative content

Consumer Benefits

Digital Cinema Benefits Are Across Film/Theatre Industry

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2010 Major Releases ( 7of 12 in 3D)

3D 3D 3D

3D 3D 3D 3D

April 2010March 2010

June 2010

March 2010 May 2010 May 2010

July 2010 Nov 2010 Dec 2010Nov 2010

May 2010

June 2010

3D3D3D 3D

3D 3D 3D

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Announced 3D Releases

Release Date Title Director Cast

March Alice in Wonderland Tim Burton Johnny Depp, Anne Hathaway

March How to Train Your Dragon Peter Hastings Gerard Butler, Jonah Hill, America Ferrera

April Clash of the Titans Louis Leterrier Liam Neeson, Ralph Fiennes, Sam Worthington

May Shrek Forever After Mike Mitchell Cameron Diaz, Eddie Murphy, Mike Myers

June Toy Story 3 Lee Unkrich Tim Allen, Tom Hanks

July Despicable Me Chris Renaud, Pierre Coffin Steve Carell, Danny McBride

July Cats & Dogs 2 Brad Peyton Chris O'Donnell, David Milchard

August Step Up 3-D Jon Chu Sharni Vinson, Rick Malambri

August Piranha 3D Alexandre Aja Elisabeth Shue, Jerry O'Connell, Richard Dreyfuss

September Guardians of Ga'Hoole Zack Snyder N/A

October Alpha and Omega Ben Gluck Christina Ricci, Hayden Panettiere

October Saw VII 3D David Hackl Tobin Bell, Tanedra Howard

November Megamind Tom McGrath Ben Stiller, Tina Fey, Robert Downey Jr.

November Harry Potter 7 David Yates Daniel Radcliffe, Emma Watson, Rupert Grint

November Tangled (AKA Rapunzel) Dean Wellins Kristin Chenoweth, Mandy Moore

December Yogi Bear Eric Brevig N/A

December Tron Legacy Joseph Kosinski Jeff Bridges, Michael Sheen, Olivia Wilde

20 3D Films Scheduled in 2010 and Over 30 Planned for 2011

Select Upcoming 3D Releases

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Alternative Content Samples

Sporting Events and Concerts are Increasing Theatre Revenue Sources

2008 2009 2010

Distributor Title Distributor Title Distributor Title

NCM Metropolitan Opera Series Live

NCM Metropolitan Opera Series Live

NCM Metropolitan Opera Series Live

Cinedigm San Franciso Opera Series Cinedigm BCS National Championship Florida vs. Oklahoma Live 3D

NCM Boxing: Mayweather Mosley Live

Cinedigm The Beatles Love Cinedigm NBA All Star Skills Contest Live 3D

Cinedigm NCAA Basketball Championship Live 3D Duke vs. Butler

Screenvision The NY Mets Theatre Simulcast Cinedigm Jonas Brothers Cinedigm Phish 3D Concert

National Geographic

U2 Vertigo Tour Cinedigm The Narrows Film Live Interviews with the Stars at Premier

NCM Interviews with 'Lost' producers Live

Cinedigm David Gilmour In Concert Cinedigm Michael Jackson Funeral Services Live

NCM Drum Corps Int'l Competition Live

Cinedigm Three Days of Grace at the Palace In Concert

Cinedigm Dave Matthews Band 3D NCM Black-Eyed Peas Concert Live

Cinedigm David Crowder Band In Concert Sony Video game event NCM UFC Championship

Cinedigm Toby Mac Live In Concert NCM Lance Armstrong race and interview NCM Bill O'Reilly and Glen Beck Live

Cinedigm Queen & Deep Purple In Concert NCM Boxing: Mayweather Marquez Live

Cinema Events

Dr. Dyer motivational presentation

NCM Drum Corps Int'l Competition Live

Cinedigm FIFA World Cup Final

NCM 'Forever Plaid' Live

Screenvision Stevie Wonder concert

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APPLYING TECHNOLOGY TO CREATE VALUE FOR INVESTORS AND CONSUMERS

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Mission Statement:

Digital Cinema Destination Corp. is dedicated to transforming movie theaters into digital entertainment centers. DCDC provides consumers with uniquely satisfying experiences, combining the full promise of digital technology with engaging, dynamic content that far transcends traditional movies.  Beyond more “passive” theatergoing, DCDC allows its customers to actively engage in live and lively events. Its applicability and appeal are as unlimited as the number of these events held worldwide and the customer segments who enjoy them. 

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Objectives and Model

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Company Objectives

• The Digiplex business model is to transform movie theatres into digital entertainment centers or destinations.

• The strategy to execute this model is to acquire existing cash flow positive theatres in strategic markets, convert them to a digital format, and proactively program/market all forms of digital alternative content, such as sports and concerts, in addition to first run 2D and 3D movies.

• The accretive cash flows associated with 3D films and alternative content will increase attendance, per capita box office, concessions and sponsorship/advertising revenues with high incremental EBITDA margins.

Business Model

• The traditional theatre model provides that weekly seating utilization is only 10-15% of capacity and less than 5% from Sunday to Thursday.

• Utilization and margins will increase by providing more alternative content choices made possible with digital cinema technology. Such content can include sports, music, lectures, religious and video gaming, most of which will be shown during non-peak times.

• Movies remain the “bread and butter” of the industry; however, all movies should not need to play five shows per day and seven days a week. Popular alternative content can be shown during specific show times that match audience demand and fill seats during days/times that are traditionally slow for theatres.

• New technologies allow for significant upside, exploiting new opportunities deriving from more choices of content, including 3D films, live events and even live 3D events.

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Marketing

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Marketing Strategy and PR

• Marketing “with an attitude" will bring consumers to theatres for reasons other than just viewing movies.

• Social media (e.g. Facebook, Twitter, YouTube) will find and attract targeted audiences to new forms of content, thus building a new community of theatre goers.

• Interactive technologies in theatres (e.g. text messaging, Megaphone, Bluebite, video gaming) will engage audiences and sponsors.

• Alternative programming will be “eventized” (e.g. tailgate parties for sports events, hawking concessions and selectively serving alcoholic beverages) with related food, drink, staff uniforms, atmospheres, audience and local PR outreach and radio/TV trade outs.

• Local and extended audiences will receive regular, virtual and viral communication (e.g. email newsletters, social networking, special offers), which is comparable to how arenas and performing arts centers market today.

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Value Creation

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Value Creation for Consumers

• At a fraction of the price to attend a major event ($15 to $25) consumers will be able to see events from major sports arenas throughout the world in 3D (e.g. World Cup, Super Bowl) as well as other genres such as The Nutcracker from Lincoln Center, Opera from La Scala or the Met, and pop concerts (Dave Matthews, Phish) from Radio City, the Paladium, or Staples Center.

• Customers will experience larger than life live images along with exceptional seats … each seat can be “the best seat in the house!”

• Corporate, religious and professional groups will save time and consume less energy and money using Digiplex Destination theatres as a meeting place.

• Live auctions and fundraisers will take place in reserved auditoriums across the U.S.

• Fashion shows and other VIP-only sponsored events/parties will target demographic profiles and interact with local retailers.

• Fun factor increases in these alternative content events when “shhhh” is replaced with “let’s get loud!”– Events will be brought to life with theme uniforms (e.g. baseball/umpire uniforms).– Events attracting a huge number of individuals gathering to experience something together builds excitement

and a sense of community.

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Value Creation (continued)

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Value Creation for Investors

• Manage risk by acquiring existing, cash flow generating movie theatres in and around top DMAs, managed by team with proven track record of success.

• Add value by converting all screens to digital 3D and opportunistically add screens where feasible and profitable.

• Add screens to existing complexes where feasible.

• Transform the theatre into an entertainment destination using marketing and programming strategies described above.

• Produce incremental box office revenues from 3D premium priced programs and movies.

• Increase per capita concession revenues accompanying alternative content music programs and sports events with food packages and per event (or regular, where possible) alcoholic beverage service.

• Increase advertising and sponsorship revenues on: – Movie screens– theatre websites and location/event specific websites (i.e., Lincoln Center, Rolling Stone website)– Interactive technologies in lobbies– Outdoor signage

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CONTACT INFORMATION:

BUD MAYOBMAYO@DIGIPLEXDEST.COM

Q & A TO FOLLOW A BRIEF VIDEO

THANKS!