“An Australian feature film produced and shot locally that addresses a tragic issue of great importance. This is a film that should be made, and made by Australians.” The offer to invest in $1.00 preferred shares of the Film Company HSE (Film #1-2016) Ltd, which is an unlisted public company, is to raise the required capital of $2.35m, which will be used to produce, market and distribute the feature film the Polisher. The source and application of Funds is highlighted in Section 5.0 Financial Information of the Prospectus. Following the Completion of the initial $580,000 the Film Company will commence pre-production whilst the Film Company continues to raise the residual Capital to meet the target $2.35m.
- 0.42% Funded
- $10,000 Invested
- $2,350,000 Target
- 0.01% - 9.99% Min-max Equity
- Started: 2017-06-16 02:37:45
- Ends: 2017-12-21 00:00:00
“An Australian feature film produced and shot locally that addresses a tragic issue of great importance. This is a film that should be made and made by Australians.”
Please download the prospectus.
[The following extracts was cut and pasted from the prospectus. References to sections are references to sections in the prospectus.]
After 20 years apart two brothers will reunite in Australia. Whilst out at a nightclub to celebrate their reunion, the younger brother Jakob gets king-hit into a coma fighting for his life. After the attacker goes free without punishment, the eldest brother Stanley decides to take matters into his own hands. Together with his estranged sister Elayna they will restore justice to Jakob and their family. To overcome his brother’s tragedy, Stanley’s quest for retribution is guided with the help of a former Polish Neo-Nazi leader named Tomek. Stanley’s journey will change the course of history and in the process building the ultimate train model system in honour of his brother, giving meaning and justice back to his broken family.
Summary and Purpose of Offer
The offer to invest in $1.00 preferred shares of the Film Company HSE (Film #1-2016) Ltd, which is an unlisted public company, is to raise the required capital of $2.35m, which will be used to produce, market and distribute the feature film the Polisher. The source and application of Funds is highlighted in Section 5.0 Financial Information of the Prospectus. Following the Completion of the initial $580,000 the Film Company will commence pre-production whilst the Film Company continues to raise the residual Capital to meet the target $2.35m. It is expected that the Film Company will repay to the shareholders $0.7m on the wind-up of the Film Company (within a target 1-2 years.), Once the Tax rebate for the Film production has been received. This will leave $1.3m as invested funds, which will be eligible for the 7.5% preferred return excluding the setup and administration costs of the Film Company and the Platform Fees. It is anticipated that pre-production will take 3 months to complete, following with a 42-day budgeted production film shoot, and then 6 months of post-production prior to marketing, distribution and Film release. The total investment period covered under this prospectus is for 5-years from the first release of the completed Film.
Shares under the Offer are priced at $1.00 each.
The minimum investment amount is $1,000, and then increments of $1,000. The Film Company reserves the right to accept applications for lower amounts.
The prospectus has been issued in order to raise $2,350,000 through the issue of 2,350,000 $1.0 preferred shares in the Film Company HSE (Film #1-2016) Ltd. HSE (Film #1-2016) Ltd, will look to raise an initial $580,000.00. The issued capital will be utilised to cover the initial expenditure in relation to the story, script, development, and 51% of pre-production costs. Once this capital has been raised and preferred shares have been issued the Film Company will continue to raise the remaining target $1,770,000.00. This capital will be utilized to fund the remaining 49% of pre-production costs, 100% of production costs and 100% of post-production costs. If the remaining capital raise is unsuccessful the Company will seek other sources of Funding to complete the movie. If the offer is oversubscribed, please see section 1.18
The investment term runs for a maximum period of 5-years from the first release of the completed Film. The Unlisted Public Company is established and the capital is provided by shareholders in exchange for the right of future profit splits for the feature film for the period of the investment term. In order to maximize the opportunity of tax concessions and grants, the Film Company has to be wound up over the period of 1 to 2 years. The residual payments for the film are then paid for the remaining life of the investment based on the percentage holding of shares in the Film Company.
The Investment will not be liquid (pursuant to the definition of ‘liquid’ in the Corporations Act 2001). As there is no assured secondary market for Shares in the Company, Shareholders can transfer shareholdings by using the Australian Standard Transfer form and paying any applicable fees pursuant to the Film Companies constitution The forms for off market transactions are available from the Securities Registrars Association website http://www. sraa.com.au Form 23, or from the Film Company. The Film Company reserves the right to refuse transfers.
Please refer to Section 7 for important information regarding the risks and sensitivities associated with an investment in the Film Company. Investments in feature film production carries high risks. It is highly speculative. Before investing in the project about which information is given, prospective investors are strongly advised to take appropriate professional advice. It is important to note that the repayment of equity, preferred return and any share of profits under the participation agreement, are not guaranteed, and are wholly determined by the success of the release of the feature Film and eligibility for any Tax rebates on wind-up of the Film Company.
The preferred return is based on the payment of profits to the investor based on 7.5% of the invested capital. This payment is only eligible after the repayment of the initial equity, which could consist of Tax rebates on wind-up of the Film Company as well as proceeds from the Film release. It is important to note that any payments to Shareholders are solely based upon the successful release of the Film, and are not guaranteed by the Film Company or the Production Company.
Investor Participation Return
The Investor participation return is calculated after the initial equity and the preferred return have been repaid to the Shareholders. The residual profit after tax, is paid to investors at a rate of 50% and is only payable based on the successful release of the Film. If the Film release declines, there may be no payments to the Shareholder under the participation Agreement. If the release is successful 50% is retained and paid to the Production Company. The Investor Participation Return runs for the maximum investment term of 5-years from the first release of the completed Film, and only become eligible once the initial equity and preferred return have been made to the Shareholders, Once the investment term of 5-years has been completed any residual profits and ongoing profits from the Film release then revert back to the Production Company. If the Initial equity and preferred return have not been made within the 5-year term, there are no further payments made to Shareholders after this period and unpaid amounts are at risk.
The Directors have considered the matters set out in ASIC Regulatory Guide 170 and due to the nature of the film industry it is very hard to predict the future revenues once production has been completed and the Film is distributed. Comparisons can be drawn between other films of the same genre production costs and cast members and production teams but based on the guidelines of RG 170, these are perceived to be speculative or hypothetical and hence inherently uncertain. Any forecast or project would necessarily contain such a broad range of potential outcomes and possibilities that it would be unreliable and, for that reason, the Directors have decided not to include any financial projections or forecasts.