Note 4 - Intellectual Property Rights: Intellectual Property Rights Policy (Policies)

9 Months Ended

Sep. 30, 2013

Policies

Intellectual Property Rights Policy

Our wholly-owned subsidiary, ESMG Inc., acquired the following intellectual property rights, which are reflected at their original cost as of September 30, 2013:

4A. Music related rights:

This represents the cost to acquire the exclusive right to produce and/or co-produce original recorded music, and subsequent production and marketing costs, for the worldwide distribution by ESMG Inc. of the following artists:

	Cumulative Acquisition Costs Through September 30, 2013
Jesse Scott	$300,000
V.I.C.	150,000
Hurricane Chris	150,000
Tion Phipps	150,000
Choo Biggz	250,500
Branded (TBA) artist	1,500,000
Bruce-E-Bee	32,150
Downtown Attraction	60,809
Kamp Hustle	4,250
Bungle Knot Dred	5,000
Str8 Hip Hop album	975
Total cost	$2,603,684

Except for Downtown Attraction, Bruce-E-Bee, Kamp Hustle, Bungle Knot Dred ,Str8 Hip Hop album and $500 of the Choo Biggz investment, all other acquisitions have been financed through short-term convertible debt instruments.

$250,000 of the Company’s financing obligation for the artist Choo Biggz is evidenced by a promissory note due GGAG, Inc. dated May 21, 2013, which bears interest at the rate of 8% per annum from December 1,2013.

$1,500,000 of the Company’s financing obligation for the acquisition of a branded (to be announced ) artist is evidenced by a promissory note due Phoenix 51, Inc. dated August 23, 2013, which bears interest at the rate of 8% per annum from April 1,2014. Because the recording artist deal with the branded artist is currently being finalized, management has chosen not to disclose the name of the branded artist until such deal is concluded.

4B. Motion picture related rights:

This represents the cost to acquire the co-produce and for ESMG Inc. to distribute worldwide the animated motion picture rights to “Bigfoot’s Big Halloween Adventures” (the sequel to “The Legend of Sasquatch’); $275,000. The Company’s financing commitment is evidenced by a promissory note dated November 6, 2012 with Gorilla Pictures, which bears interest at the rate of 8% per annum from June 1, 2013.