North American Satellite Corporation

HISTORY OF THE COMPANY

North American Satellite Corporation (“NASCorp”), America’s Family Entertainment, Inc. (“AFE”) was founded in late 1998. The founders of the Company, R. L. (“Rick”) Humphrey and Dwayne McKinney recognized that their business experiences had a commonality. Rick, having been in the propane business, had invented a device that could remotely measure the liquid levels in the tanks of his customers.

Dwayne, was in the Direct Broadcast Satellite (“DBS”) business through DirecTV affiliate, Pegasus. Dwayne approached the company to become a Pegasus Satellite Television Dealer. Rick pursued Dwayne’s idea. He further spearheaded the development of SkyTracker™ tank and home monitoring systems. SkyTracker™ utilizes current and emerging wireless and satellite communication technologies, adopting a down-link path through a customer’s DBS television dish and receiver (or, today, NASCorp’s own AFEXpress broadband Internet P/C servers). SkyTracker™ can transmit data by wireless cell or Ku-band and Ka-band orbital satellite prompts. NASCorp holds satellite transponder contracts with SESAMERICOM’s subsidiary, Internet Satellite Platform, Inc., EchoStar and the Hughes-Hubbard Broadcasting organization.

The Nation’s 8,500 propane marketers have a unique business model. Their businesses are seasonable, yet they require a staff of technical individuals whose expertise is typically required only during a few months of the year. In order to keep these qualified people employed during the off-season, the marketer must use them to do numerous non-technical tasks. Herein lies one of the key premises for NASCorp’s pursuit of the propane marketer, the use of his or her employees to make available satellite TV and broadband Internet services to their existing customer bases. This would also provide the propane utility marketer with new utility revenue streams. By combining these wireless communication products with SkyTracker™ tank monitors, the marketer would gain further cost savings and efficiencies in their propane delivery routing.

NASCorp has set forth a conservative marketing goal to reach 5.87% (1,171,200) of the 20,000,000 rural households (60 million Americans) that use propane. This modest goal for NASCorp’s Direct Satellite Broadcast television programming or AFEXpress Internet broadband services would also be the base for NASCorp’s application of SkyTracker™.

By contrast, the Nation’s 17,000 DBS dealers and ®RadioShack independent franchisers are finding that NASCorp’s co-branded, co-owned AFEXpress broadband service is a salvation to their businesses’ financial future, particularly the DBS dealer. These dealers can reach the remaining 18,500,000 rural households in the U.S., which use other energy sources i.e., electricity, solar, geo-thermal, natural gas and etc.

Everyone watches some television, and most television viewers are still tied to land-line cable. Satellite television eliminates cable lines and the cost to maintain those lines. NASCorp’s Retail Dealers pass that savings on to DBS subscribers.

Likewise, subscribers to the world wide web number in excess of 1 billion, but only 7.8 million subscribers today have high-speed Internet. NASCorp’s broadband connectivity service eliminates land-line bottlenecks. In addition, the satellite platform on which AFEXpress is built was endorsed by PC World magazine (January 2002, issue) as the number one broadband in North America today, when considering price versus user options, availability and speed. Being a wireless down-link, a cost savings results which is passed to customers. AFEXpress is high-speed Internet designed for rural and median income Americans.

By a NASCorp Retail Dealer combining a customer’s communication needs, the Retail Dealer can achieve annual revenues of $355,126.48 with $158,780.54 in Operating Cash Flow (EBITDA). This can improve the resale value of their business, which typically sell for 5x EBITDA, or $793,902.70. This can be realized on just 20 system installs per month.

NASCorp’s gross margin from the sale of these same systems, with second receivers and installation kits, would produce $18,240.00 per dealer per year plus monthly residual revenue of $ .35 for a TV subscriber and $3.00 to $11.00 for an AFEXpress subscriber. The inclusion of SkyTracker™ systems would yield another $22,080.00 in gross margin per dealer per year for NASCorp. NASCorp’s business model is to establish 1,920 Retail Dealers nationwide over a five (5) year period with each Retail Dealer installing twenty (20) DBS-TV and twenty (20) AFEXpress Internet systems per month.

NASCorp management believes that this goal is conservatively realistic. It means that each of the proposed eight (8) NASCorp Account Executives must, over the five (5) year term sign 240 Dealer locations. (NOTE: Many existing NASCorp Retail Dealers have two to fifteen locations (Retail Stores).) Each NASCorp Account Executive will have the responsibility to develop a six (6) state area. The goal is 6,240 DBS-TV and AFEXpress hardware sales with service activation.

By contrast, the above referenced, NASCorp's Account Executive, Dwayne McKinney, as Account Executive for Pegasus maintained a networking of 115 dealers in the State of Kentucky. In 2001, McKinney's charges installed 15,792 DBS-TV systems. He and his counterparts from Ohio, West Virginia, Virginia and Indiana activated 66,588 units. Unlike the NGL Dealer, McKinney's Pegasus Dealers did not have existing customer bases!

NASCorp has in place experienced and well motivated sales, marketing, administrative, operational and technical support staff to assist NASCorp Retail Dealers throughout twenty (20) states. They are trained to help NASCorp Retail Dealers to move NASCorp products through their distribution channels, to existing customer bases.