NOTE 10 - INSURANCE EXPENSE

The Company is required to have two types of insurance; Contents Insurance and Errors & Omissions Insurance. Content Insurance protects inventories, equipment, and supplies. Error & Omissions Insurance is held by all professional firms and, as the name implies, protects the authors, publishers, and distributors of literary works from any so called errors, mistakes, or omissions of critical facts, etc. The premiums for each type of insurance are outlined as follows:

Please note, a 10% increase in insurance expense has been forecasted for year two and three. Also, payment on the above premiums will commence in the first month of each operating year (May).