125% of Principal + 50% of Net Proceeds
125% of Principal + 50% of Net Proceeds
100% of proceeds are paid to investors pro-rata until 125% of principal investment is returned. Thereafter investors earn 50% of Net Proceeds. This is a custom contract, see document for details.
|1||The STAGES producers have made dozens of features, successfully steering them through production/post, festival circuits, and distribution.|
|2||Pulse Films (2019 Shots Prod Co of the Year) will EP the film. They have made 35+ films including Bikram, American Honey, and Skate Kitchen.|
|3||Pulse will assist with distribution given their success premiering films at Cannes and Sundance as well as on Netflix, HBO, and Apple.|
|4||We made a short, THE HEIGHTS, as a prototype. It had a successful festival run including a premiere at the prestigious Palm Springs IFF.|
|5||Ryan's work with Spotify has opened the doors to world-famous studios (Electric Lady, Blackbird) and venues that we'll leverage for STAGES.|
|6||Ryan works with top tier musicians such as Billie Eilish, Khalid, and Elton John and will leverage this industry experience for the film.|
|7||Ryan's commercial experience directing for Nike, Adidas, Porsche, Peloton has enabled him to build a top tier crew ready to work on STAGES.|
|8||David Ramirez, the lead actor in the film, is a successful singer-songwriter who has written a slate of original music for the film.|
STAGES tells the story of Ben Garza and Jessie Claymore, two mid-career musicians attempting to define success and purpose amidst the unexpected twists and turns of making a living off of your own creative output. Responsibility looms. Expectations abound. And both Ben and Jessie will have to decide how to define the next phase of their careers.
Using all original music, building off a real multi-show tour, and blending the very real life and career experiences of both myself and our lead, David Ramirez, STAGES is an intimate look at what it means to be a musician with something to say in 2020.
I didn’t begin my career on a film set in Los Angeles, but in a recording studio in Nashville. I started out soldering cable and fetching coffee, eventually working my way up to first engineer and tracking more than forty albums for some of the most legendary producers and engineers around. It was an infectiously creative time in music production and I had an up-close, behind-the-scenes view of the inner workings of some of the biggest rock bands on the planet. But I was also getting to know the next generation of up-and-coming artists that were grinding it out in the tiny clubs and bars around town as they tried desperately to gain some traction and grow their careers.
Even since transitioning to filmmaking, I’ve directed music videos, tour documentaries, and performance videos for some of the world’s most famous artists. Billie Eilish, Elton John, Chris Stapleton, Justin Timberlake, Khalid, Lorde, and tons of others. I’ve had the chance to listen to some of the most iconic musicians talk about their careers and the way they’ve given their lives to music. I’ve also watched bands that got started in those early Nashville days rise to great acclaim. But I’ve also been in dressing rooms when pent up emotions and resentments rise to the surface. I’ve witnessed bands break up and disintegrate before major showcases, and many musicians crumble under the pressure.
I've been filing these stories away as I watched the world change for musicians these past ten years.
Now, I have always loved music films. And not just because of my experience in music, but because music stories - and especially the performance of the music - can be incredibly powerful and cathartic for an audience.
And it's not just me. Hollywood seems to agree. From breakout indie hits like ONCE to massive blockbusters like A STAR IS BORN, music films tend to release in waves every few years. And they tend to be awards favorites as well. Crazy Heart, Almost Famous, Inside Llewyn Davis, A Star is Born, and Once all were dominant films at the Oscars when they came out.
However, as much as I love these films, I have yet to see a music film that is representative of the world I've been in or the musicians I've worked alongside these past 10 years.
Most music films tend to focus on the pursuit of fame. Stardom. Success as extreme wealth and power...or the loss of that power. Otherwise they tend to be rags to riches stories about that one demo tape that gets in the right hands or the one song that becomes a hit and then everyone rides off into the sunset. These are basically films are about winning the lottery. One minute you're on your couch dreaming of a career in music, the next you're on stage accepting a Grammy.
But that's just not the (real) world that I've seen.
And those films are definitely not representative of the hundreds and thousands of journeyman musicians whose careers aren't exponential curves that move from obscurity and then launch into the stratosphere. Most musicians I've met and worked with have careers that are slow and steady. Sometimes they stagnate. Sometimes they grow. But the engine of their progress is their own hard work and tenacity and progress takes years.
Back when I was an audio engineer, I met a young singer-songwriter named David Ramirez. David is one of those uniquely talented musicians who can walk on stage at a rowdy, crowded bar, start playing, and by the end of the first song, have every single person in that room - including the bartenders - frozen in awe at the music coming from stage. He's that good.
But being that good doesn't automatically mean overnight success.
Back when I met him in 2010, David was struggling to fill a bar with 50 people that were there to see him. It wasn't because he wasn't talented. In fact, here is a video that we made together back then - a live performance of his song, Fires:
David was a guy that people constantly said, "why isn't he a much bigger deal?" How do you answer that question? You can't. So David kept working.
In 2019, David was selling out 1200 seat venues in Austin, touring all over the US and Europe, getting his songs placed on TV shows like Billions, and averaging over 100K listeners per month on Spotify. To some, it might look like he's achieved some modicum of success...that he's "made it."
But if you asked him? He'd probably tell you he's barely scratched the surface. Or that he feels like he should be further along than he is and that everything just feels so...tenuous.
This is a common sentiment amongst all of my friends who create for a living in 2020. Everything is tenuous. The industry changed. The models have changed. The access has changed. The "noise" floor has risen significantly.
The more time I spend with musicians, the more I see my story - and the story of any of us that create for a living - reflected back to me. No matter the size of the set, the budget, or the "prestige" of the project, I still struggle with defining forward progress. Success isn’t a destination, it’s a journey - one fraught with detours and unexpected stops along the way. Especially as we get older and take on more responsibilities.
It was out of this merging of my journey and that of David and all the musicians I've met along the way whose story his represents that STAGES was born. A film not for or about the superstars or the overnight successes. It's a film about the millions of us somewhere in-between, asking many of the questions that musicians have to ask themselves with each new record, with each new tour: am I good enough? Will I have something of substance to say? Is all this effort worth it?
Every couple of years, as I've watched music films come to market, I keep waiting for one to tell the story of the music I came up on. To tell the stories of the indie bands making their own way in this new paradigm. And I just haven't seen it.
So, we're going to make it. STAGES will be that music film for this next generation of musicians and makers staking their careers on their own creative output.
And while I could talk to you about the creative bones of this film until I'm blue in the face, this is a business proposition, an invitation to invest, and that has been at the forefront of our minds as we've built the plan for how to make this movie. We're keeping the budget as low as possible. We're engaging extremely talented and experienced producers, EPs, and crew members who can help us punch well above our weight class. I'm bringing my performance video and music doc experience to the table and we're going a real tour to real venues with real crowds and we're going to track all of the music live. And most importantly, David Ramirez is going to play one of the leads in the movie.
I'm excited about what's next for STAGES and look forward to having you on the journey.
STAGES has financial statements ending December 31 2019. Our cash in hand is $0, as of February 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $0/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
STAGES is a love letter to the musicians he's met along the way and anyone brave enough to try and build a career out of the things they make. It's a film we plan to start producing in 2020.
Put simply: we make emotionally compelling work destined for screens both big and small. We tell stories that make sense of the world we live in and connect with audiences around the globe.
We hope STAGES will be a film with a very long tail. By making the film at this particular budget level as well as including partners with volumes of experience in bringing films like STAGES to market, we fully intend on a robust festival, theatrical, and streaming life for the project. Although investors in this campaign will only receive distributions from STAGES, we have other projects in the works that we hope our investor community will participate in in the future.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Stages Film LLC was incorporated in the State of Texas in October 2019.
Since then, we have:
Historical Results of Operations
Our company was organized in October 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Stages Film LLC cash in hand is $0, as of February 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $0/month, for an average burn rate of $0 per month. Our intent is to be profitable in 24 months.
After securing an initial round of funds, production is expected to commence in Spring 2020. The total budget for the film is $400,000. If we aren't able to raise that full amount on Wefunder, and only raise our minimum ($150,000) we will rely on sweat equity investments to complete production of the film. We also have access to some bridge and gap capital if we need it, or we may look into the NY state tax benefit for this film.
The majority of profits are expected during the first 2-4 years after releasing the film, and the company is targeting (although cannot guarantee) revenues of $750k as their low, $1.5M as their mid-range, and over $5M if it’s a breakout success.
The company is in conversations with other potential sources of capital but doesn't have any secured as of February 2020.
The creation of a film is tied to external forces outside of the control of the company, including, but not limited to, weather, terrorist attacks, and labor strikes. Events of this nature could have an impact on both the timeline of the project and overall budget. Extreme cases may make it impossible to complete the project.
Receipt of revenue is often tied to third party companies such as sales agents, distributors and exhibitors. While the money could earn money in the marketplace, it is possible that revenue could not reach The Company as a result of a third party claiming bankruptcy or refusal to pay.
Investment in Film, by nature, is a high-risk investment. The industry is constantly shifting and changing and business models that work for one film, may not necessarily work for another one. Performance on a film often depend on external forces, outside of the control of the company.
The Company will not be performing background checks on any of its team members or employees. The reception of a film is often tied very closely to the public perception of the team members and employees (i.e. director, cast, producers, company). While the company will hold its team members and employees to the highest standards of professionalism while making the film, if it is learned at any point that those team members were involved in inappropriate, immortal, unethical or illegal conduct in the past or after the creation of the film, it could affect the performance of the film in the marketplace.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
Reliance on management – except as set forth in this agreement, decisions with respect to the management of company will be made by the managers in the managers’ sole discretion. The success of the picture will largely depend on the quality of the management of the company. The managers, with the advice and assistance of other professionals, will administer all business aspects of the managers, the company and the picture. Although the managers believe that the managers have the necessary business and motion picture experience to supervise the management of the company, there can be no assurance that the managers will perform adequately or that the company’s operations will be successful. Purchasers of interests will receive an economic interest in the company, but shall not be participants in the management or the operations of the managers, the company or the picture. Accordingly, except as otherwise set forth in this agreement, an investor will have no right to vote on, or to veto actions of the managers, will have no creative control, and manager-approved actions may be approved despite the investor’s dissent from such actions. Neither the company, the managers nor any of the managers’ advisors have managed or produced a feature film previously, and no assurance can be had that their efforts will be successful for the picture.
Limited operating history – the company has been in existence for a very short period of time, and is subject to all the risks incident to the creation and development of a new business, including the absence of a history of operations and minimal net worth. Furthermore, the company has not produced or distributed a full-length motion picture. The company and the managers have, and will continue to, endeavor to employ or otherwise retain the services of those persons with the skills necessary to successfully produce and distribute a full-length feature film, but no assurances can be given that they will be successful in these efforts.
Indemnification – under certain circumstances set forth specifically in article iv of the operating agreement, the managers will be indemnified by the company for any liabilities or losses arising out of the managers’ activities in connection with the company. Indemnification under such provision could reduce or deplete the assets of-the company.
Working capital requirements and the potential need for additional financing – there is no assurance that unforeseen events will not occur, resulting in the need to raise additional funds beyond what the company and the managers project.
Furthermore, companies with limited operating histories, such as the company and the managers, do not always use capital in the most efficient manner. Thus, the company and the managers may need to raise additional capital to fund future operations and to satisfy future capital requirements of the company. The failure to raise any additional needed funds could have a material adverse effect on the company and the managers. In addition, it is anticipated that raising additional funds will result in additional dilution of each offeree’s investment. Subject to the terms of the agreement, though the company and the managers do not anticipate that additional financing will need to be obtained, there can be no assurance that additional capital will not be needed.
Liability of members – members might, under applicable law, be liable to the company in an amount equal to any distribution made from the company to members, if, after distribution is made, the remaining assets of the company are not sufficient to pay its then outstanding liabilities, exclusive of liabilities to the members arising on account of their respective interests in the company.
Loss on dissolution or termination – in the event of a dissolution or termination of the company, the proceeds realized in the liquidation of assets, if any, will be distributed to the members only after the satisfaction of claims of creditors.Accordingly, the ability of a member to recover all or any portion of his or her or it's investment under such circumstances will depend on the amount of funds so realized and the amount of claims to be satisfied therefrom.
Income tax consequences – there are various risks associated with the federal income tax aspects of an investment in the company which should be carefully considered by each prospective investor to determine whether an investment in the company is suitable for such prospective investor. Each prospective investor is urged to consult his or her or its own tax advisor with respect to the federal (as well as state and local) income tax consequences of an investment in the company.
Competitive industry – some segments of the motion picture industry are highly competitive. The company will be competing with the producers of other films in arranging for distribution in all available markets and media. In the distribution phase, competition will limit the availability of such markets and media required for the successful distribution of the picture. The picture will be competing directly with other motion pictures and indirectly with other forms of public entertainment. The company will compete with numerous larger motion picture production companies and distribution companies, which have substantially greater resources, larger and more experienced production and distribution staffs, and established histories of successful production and distribution of motion pictures.
Commercial success – the picture’s success is primarily dependent on audience acceptance of the picture, which is extremely difficult to predict and, therefore, inherently risky. Many films are produced each year and never released. Many films are released each year, which are not commercially successful and fail to recoup their production costs from united states theatrical distribution. Foreign and ancillary markets have therefore become increasingly important. Licensing of a motion picture in the ancillary markets is particularly dependent upon performance in domestic theatrical distribution. Neither the managers nor the company can predict the economic success of the picture because the revenue derived from the distribution of a motion picture (which does not necessarily bear any correlation to the production or distribution costs incurred) depends primarily upon its acceptance by the public, which cannot be accurately predicted. The economic success of a motion picture also depends upon the public’s acceptance of competing films, the availability of alternative forms of entertainment and leisure-time activities, general economic conditions and other tangible and intangible factors, all of which can change and cannot be predicted with certainty. Neither the managers nor the company can assure members that the picture will generate enough revenue to offset its distribution and marketing costs, in which case the company would not receive any net revenues for the picture.
Production – particularly as produced by independent filmmakers, each motion picture is a separate business venture with its own management, employees and equipment and its own budgetary requirements. There are substantial risks associated with film production, including death or disability of key personnel, other factors causing delays, destruction or malfunction of sets or equipment, the inability of production personnel to comply with budgetary or scheduling requirements and physical destruction or damage to the picture itself. Although some of these problems may be covered by company’s insurance for the picture, significant difficulties such as these may materially increase the cost of production or may cause the entire project to be abandoned.
Dependence on key personnel – the company’s future success depends, in significant part, upon the continued service of the individuals that constitute the production team and the managers’ advisors. Neither the company nor the managers maintains key person life insurance for any team member or employee. Furthermore, the company’s and the managers’ success is dependent on the ability of the company and the managers to attract top talent, both within the production team and the cast of the picture. The company’s and the managers’ inability to attract such talent or the loss of the services of one or more members of the production team could have a material adverse effect on the company’s and the managers’ ability to successfully produce and distribute the picture. Additionally, the company may elect to forego the purchase of a completion bond or other types of production related insurance for the picture, resulting in certain losses relating to any of the picture’s key personnel, equipment, locations and/or film footage being uninsured which could have a material adverse effect on the company’s and the managers’ ability to successfully produce and distribute the picture.
Labor disputes – there is no assurance that labor difficulties affecting production will not arise, including but not limited to union strikes. If such labor difficulties arise, film production and, hence, return to investing members could be delayed or diminished.
Audience appeal – the ultimate profitability of any motion picture depends upon its audience appeal in relation to the cost of its production and distribution. The audience appeal of a given motion picture depends, among other things, on unpredictable critical reviews and changing public tastes and such appeal cannot be anticipated with certainty.
Cost overruns – the costs of producing motion pictures are often underestimated and may be increased by reason of factors beyond the control of the producers. Such factors may include weather conditions, illness of technical and artistic personnel, artistic requirements, labor disputes, governmental regulations, equipment breakdowns, and other production disruptions. While the company intends to engage production personnel who have demonstrated an ability to complete films within the assigned budget, the risk of a film running over budget or of not being completed is always significant and may have a substantial adverse impact on the profitability of the picture.
Distribution – the profitable distribution of a motion picture depends in large part on the availability of one or more capable and efficient distributors who are able to arrange for appropriate advertising and promotion, proper release dates and bookings in first-run and other theaters. There can be no assurance that profitable distribution arrangements will be obtained for the picture or that the picture can or will be distributed profitably or that the picture will be distributed at all.
Long-term project – the production and distribution of a motion picture involves the passage of a significant amount of time. Pre-production on a picture may extend for two to three months or more. Principal photography may extend for several weeks or more. Post-production may extend for three to four months or more. Distribution and exhibition of motion pictures generally and of the picture may continue for years before gross proceeds or net proceeds (as defined herein) may be generated, if at all.
Foreign distribution – foreign distribution of a motion picture (i.E., outside the united states and canada) may require the use of various foreign distributors. Some foreign countries may impose government regulations on the investing members with this system is that such investing members, who have had their money at risk for the longest time, are at the tail end of the box office receipts chain. Thus, if the company, in negotiating a distribution deal, has to rely heavily on a participation at some defined level of the picture’s revenue stream, revenues to the company, and thus to investing members, are likely to be the last in line to benefit from such a revenue stream, if any.
Industry changes – neither the managers nor the company can predict the effect
Picture’s liabilities – the company will actively participate in the production and distribution of the picture. Because insurance covering such liability may not be available at a reasonable cost, or may simply not be obtained, the assets of the company may be exposed to operating risks that may arise from the creation, exploitation and disposition of the picture.
Subject to the terms and conditions of this agreement, the managers have reserved the specific authority to enter into agreements on behalf of the company with motion picture or television studios, distributors and/or other third parties pursuant to which the company, in exchange for such studios’, distributors and/or other third parties’ assistance in producing, distributing and/or otherwise exploiting the picture, may commit to pay such parties out of revenues generated by the picture at a point in the picture’s revenue stream prior to company’s receipt of its gross proceeds. Such agreements may include, but are not limited to, flat fee arrangements, negative pickup deals or an outright sale of the picture, if in the judgment of the managers; such a sale would be in the best interest of the company. In addition, subject to the terms and conditions of the llc agreement, the managers have reserved the right (1) to produce the picture and seek the most advantageous distribution agreement for the picture, and (2) to enter into agreements on behalf of the company which provide that persons rendering services or other materials or facilities in connection with the development, production, distribution or other exploitation of the picture shall receive, as salary or other compensation, deferred amounts or a percentage participation in company revenue. Such reliance on the judgment and discretion of the managers place a greater emphasis on the skills and judgment of the managers, and the managers’ advisors and therefore makes it imperative that prospective non managing members carefully examine the abilities of such managers and the managers’ associates before choosing to provide any subscription hereunder.
Distributions and liquidity - distribution of the company’s proceeds to the members will provide a primary source of distributable cash or securities to the members. The managers will have absolute discretion in the timing of such distributions, if any, subject to the terms and conditions of this agreement. There can be no assurance that there will be any distributions or that aggregate distributions, if any, will equal or exceed the members’ investment in the company.
An investor who purchases interests in the company should be aware that the investment in the company is highly speculative and that such investor risks losing his, her or its entire investment.
Illiquidity of investment – there is no public market for the interests and one is not expected to develop. Each investor should be aware that he/she/or it must bear the risks of an investment in the company for an indefinite period of time because any transfer, sale or assignment of the interests is subject to the consent of the managers in its discretion. Furthermore, the interests have not been registered under the securities act of 1933, as amended (the “act”), or any other applicable law, and therefore, cannot be sold and must be held indefinitely unless they are subsequently registered under the act, and any other applicable law, or, in the opinion of the managers, exemptions from such registration are available. Any such registration is unlikely to occur in the future. In addition, no sale, transfer or assignment of an interest will be permitted if, in the opinion of counsel for the company, such sale, transfer or assignment would violate the status of the original sale of the interests which formed the basis for the exemption from registration under the act, or any applicable state securities laws, pursuant to which such interests were offered, or cause a termination of the entity’s treatment as a company for federal income tax purposes. As a result of these restrictions, members may not be able to liquidate their investment in the event of an emergency, and the interests may not be readily accepted as collateral for a loan.
Inherent uncertainty of projections – the indicative cashflows and certain forward looking statements are based on certain assumptions and other information available to the managers. However, the underlying estimates, assumptions and future events are inherently uncertain, and unanticipated events may occur which would cause actual results to vary, perhaps materially from any forecasted results. Each investor should be aware that many films do not get released or if released are not commercially successful, and lose money. As a consequence, each investor should be aware that neither the company nor the managers guarantee or warrant any specific projected result of an investment in the company. Accordingly, investors should retain and rely upon the advice of their own professional advisors with respect to their individual suitability for an investment in the company and the tax consequences resulting therefrom. the foregoing list of risk factors does not purport to be a complete explanation of the risks involved in an investment in the company.
Ryan Booth is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
Henry Proegler is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
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