[NEohioPAL]Funding for films - a high risk endeavor

Mon Apr 9 06:13:38 PDT 2007

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As filmmakers, we always in need of funds to start or finish our movie,
however, be very careful in how you obtain your funding, here's a small
write up by an entertainment attorney in providing some tip bits about
investing on a film:

----------------

There are many problems to indie filmmaking and financing is just one of
them. Probably the best filmmaking book I've ever read is "Independent
Feature Film Production" by Goodell. This is one of the only indie
filmmaking books that actually includes information on film financing and
the documents and procedures required. [to receive more information on this
books, 

When you speak to someone about financing your project you MUST be VERY
careful. Investing in your film is a SECURITY and as such is regulated by
the SEC. That's right, the Securities and Exchange Commission (aka: The
Feds).

Improper procedures or discloser can result in fines or more.

When seeking investors make sure that you're not speaking to people that
you're not acquainted with. If you do, the feds can classify it as
"solicitation". That's a NO NO.  (Unless you have registered with SEC)

Here is another problem. If you offer it in the wrong way say,
misinformation in the investor's plan, announcing it at a party or placing
an add in a magazine or similar media or on your website, they can classify
it as a "Public Offering"...Another NO NO. This one would cost you, the
filmmaker, dearly. You would be required to register the stock with the SEC
and that is quite costly.

Be careful and make sure you're attorney looks over the information before
you proceed to financing. If you don't have a lawyer, usually there are some
local support groups that can help you find one. 

------------------

My comment:

Make sure you read on these before hand, especially just go to SEC website
and read all the FAQ they have there for filmmakers, basically, you can ask
friends, families or people you know only unless you registered with SEC.
Any false information that you provide to these investors, will be
considered fraud and any of these investors can 1. sue you for fraud, or 2.
asking you for $ back. Make sure you sign a very detailed paperwork, not
some 1 sheet or so. In your papers, make sure the RISK FACTOR in investing
into a film is explained clearly, and do not EVER, make mention of 'we have
secured distribution rights' when nothing was signed, Because in the end,
these will come back and really bite you hard.

You can find more articles about distribution, funding and others here:
http://www.marklitwak.com/articles/

Johnny K. Wu

www.mdifilm.com <http://www.mdifilm.com/> 

www.rapturethemovie.com <http://www.rapturethemovie.com/> 

www.clevelandindieclub.com <http://www.clevelandindieclub.com/> 

www.ocagc.org <http://www.ocagc.org/> 

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<div class=3DSection1>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>As filmmakers, we always in need of funds to start or =
finish
our movie, however, be very careful in how you obtain your funding, =
here’s
a small write up by an entertainment attorney in providing some tip bits =
about
investing on a film:<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>----------------<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

There are many problems to indie filmmaking and =
financing is
just one of them. Probably the best filmmaking book I've ever read is
"Independent Feature Film Production" by Goodell. This is one =
of the
only indie filmmaking books that actually includes information on film
financing and the documents and procedures required. [to receive more
information on this books, <o:p></o:p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

When you speak to someone about financing your =
project you
MUST be VERY careful. Investing in your film is a SECURITY and as such =
is
regulated by the SEC. That's right, the Securities and Exchange =
Commission
(aka: The Feds).<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>Improper procedures or discloser can result in fines =
or
more.<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

When seeking investors make sure that you're not =
speaking to
people that you're not acquainted with. If you do, the feds can classify =
it as
"solicitation". That's a NO NO.  (Unless you have =
registered
with SEC)<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

Here is another problem. If you offer it in the wrong =
way
say, misinformation in the investor’s plan, announcing it at a =
party or
placing an add in a magazine or similar media or on your website, they =
can
classify it as a "Public Offering"...Another NO NO. This one =
would
cost you, the filmmaker, dearly. You would be required to register the =
stock
with the SEC and that is quite costly.<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

Be careful and make sure you're attorney looks over =
the
information before you proceed to financing. If you don't have a lawyer,
usually there are some local support groups that can help you find one. =
<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>------------------<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>My comment:<o:p></o:p></span></font></p>

Make sure you read on these before hand, especially =
just go
to SEC website and read all the FAQ they have there for filmmakers, =
basically,
you can ask friends, families or people you know only unless you =
registered
with SEC. Any false information that you provide to these investors, =
will be considered
fraud and any of these investors can 1. sue you for fraud, or 2. asking =
you for
$ back. Make sure you sign a very detailed paperwork, not some 1 sheet =
or so. In
your papers, make sure the RISK FACTOR in investing into a film is =
explained
clearly, and do not EVER, make mention of ‘we have secured =
distribution
rights’ when nothing was signed, Because in the end, these will =
come back
and really bite you hard.<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>You can find more articles about distribution, =
funding and
others here: <a =
href=3D"http://www.marklitwak.com/articles/">http://www.marklitwak.com/ar=
ticles/</a><o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>Johnny K. Wu<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><a =
href=3D"http://www.mdifilm.com/">www.mdifilm.com</a><o:p></o:p></span></f=
ont></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><a =
href=3D"http://www.rapturethemovie.com/">www.rapturethemovie.com</a><o:p>=
</o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><a =
href=3D"http://www.clevelandindieclub.com/">www.clevelandindieclub.com</a=
><o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><a =
href=3D"http://www.ocagc.org/">www.ocagc.org</a><o:p></o:p></span></font>=
</p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>

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