USC Sadness

I lost a special person who is directly responsible for where I am in my life/career. Kathy Fogg was one of two people who ran the Peter Stark Producing Program at USC (Larry Turman is the ‘leader’ of the program – but Kathy did all the day-to-day).  I know for a fact she was the one who pulled my application and was the champion for me, which resulted in my acceptance into the program.  And when I received the call I got in and needed to be there within 48 hours, Kathy opened up her home to me.  She put me up in her house for almost a month. I got off the plane not knowing a person in LA, never having been west of Colorado, with no place to live and no car. She (and her late husband) didn’t just allow me to stay at their house, they made me feel like I was part of their family.  Since then Kathy and I always joked that she was my LA mom.  In fact, she had a ton of furniture in storage and gave me most of it. That’s the type of person she was.

I don’t know if I have ever met someone who was more caring, upbeat and giving. It was such a contrast to what you’re told LA is all about, which made the program feel like a family. I think that element will forever be gone no matter how great those who running it are.  And I will forever be grateful to her for so many things.

Rest in Peace Kathy.

Contents of a Film Private Placement Memorandum

Below is Part 2 of 4 in my PPM series on FilmProposals.com:

Now that you know what a Private Placement Memorandum is, and how it can help you raise money from Film Investors, let’s look at the contents of a Film PPM. There are 10 sections that make up your independent film PPM. The first section of the document, Summary of the Offering, is the most comprehensive and will be the first impression you make with film investors. It is where you first outline your Company, Film and Financial details.

The following represents a list of all of the details that make up your Summary of the Offering:

Company Details

Name of offering entity (LP, LLC or corporation)

Contact Information
Address
Phone Number and Fax Number
Email Address

State in which entity is formed (or to be formed)

If already formed, date of formation
If not formed, will it be formed before or after start of offering

Purpose of Offering Entity
For most of you, the production of a feature film

Film Details

Name of Film
If this is a working title, you should specify this

Screenplay Writer(s)

Director

Producer(s)
This includes Executive Producers as well

Any Cast attached

Financial Details

Size of Unit
($ per unit, interest or share)

Number of units to be sold

Size of total offering
Size of minimum investment

Payback %’s to investors (if applicable)

Any interest payable to investors (if applicable)

Is the offer available to non-accredited investors?

Impound or non-impound
(money escrowed until certain level of investment reached)

Commissions and/or Fees (due diligence fees and finders fees)

A list of any selling brokers

Is there a selling agreement with a broker?

States, Countries where Units are offered

Name of Manager(s) and position(s)

If Manager is an entity, the Owner and operator of Manager

Are resumes available for people mentioned above

If this is an existing entity, divulge any info on prior projects (that are related to the offering)

Businesses, financial data, copy of all governing documents

Identity of any predecessor entities and some summary info regarding how much money raised and what proceeds used for.

If the offering entity already exists, do they have any financial statements?

If the manager of the offering entity is an entity itself, are there any financial statements for it?

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Conclusion

Although this is just the first section of the PPM, if you can answer the majority of these questions, then chances are, you are ready to put together a meaningful business proposal for your film. If you aren’t sure about these questions, or are on the fence about certain answers, then you are NOT ready to approach investors about your film. You may have a screenplay you believe in, but you do not yet have a clear financial plan. Nor will you be able to respond to a savvy investor who will ask you these questions.

Do not despair, answers to your questions are out there. Or, if you know the answer and just happen to be on the fence about one of the questions – there are people out there willing to share their experiences and knowledge with you.  However, they are not lining up to come to you. If you are making an independent film, it is time to get in that mindset – which means YOU need to make it happen. Seek these answers and experienced producers out.  And never get discouraged by a cold shoulder or a negative response. All it takes is one positive response.

Lunatic Has Been Approved!

It came over a month later than everyone expected, but my next feature film, LUNATIC, has finally received approval for the UK tax incentive.  Apparently they wanted a lot more documentation than previous years and it slowed things down a bit.  But we are now approved and can take final steps towards locking in financing and legal.

I am keeping myself on an even keel until that process is finalized because anything can happen between now and then.  However, the shoot date has been set in June and the powers that be are all gunning to make that happen.  I continue to do as much as I can and am way ahead of the curve in terms of where I need to be.

What is a PPM (and how does it affect your film)?

Since my surgery I’ve been on the shelf for a while.  I’m starting to come around and I have recently been consulting with FilmProposals.com - writing articles, revising some of their data, reviewing business proposals for films, etc…

Below is the first of four in my series on Private Placement Memorandum’s for feature films:

If you are looking to raise money for your independent film, you have likely heard the term Private Placement Memorandum (PPM) and are wondering if you need one? Unless you are getting private equity from family and friends, you should have a Film Private Placement Memorandum (PPM) drawn up for your fund raising.  In fact, you should have a PPM even if that is the case.

What is a PPM?

PPM stands for Private Placement Memorandum. Issuing a PPM lets your company sell shares to “passive investors” (those who invest but take no active role in the production) in order to raise the money needed for the film project.

This document commonly provides investors with material information, such as a description of the company’s business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other material information.

How does a PPM affect your independent film?

Having a PPM is just as much for your protection as it is for your investors. The primary purpose of a PPM is to give producers the opportunity to present all potential risks to potential investors (such as the inability to find distribution or that it may never achieve financial success), thus making it difficult for investors to claim that they were not adequately warned. For this reason, it is vital the contents of the PPM be accurate and complete and meet the highest standards of full disclosure (under securities laws) to potential investors.

In drawing up a PPM, be aware of the type of film you are making. This honesty will protect you later on.  Do not oversell your film.  If you are making a low budget independent film that will more than likely be taken to a sales market or film festival, your PPM should not focus on theatrical releases (their numbers and risk factors). When using comparable films or revenue projections be as conservative as possible. For example, your found footage film should not reference Blair Witch Project and/or Paranormal Activity.  Also, don’t use sequels or franchises when putting numbers together because they will obviously skew your numbers.

Where can I get a PPM done?

Most of us don’t have access to investment banks, so entertainment law firms are a good place to start.  These are in the $10,000 range, but could run you as much as $20,000. This could very well be an astronomical number, and would defeat the purpose of trying to raise this money. Don’t despair, there are firms that specialize in PPM’s online for a fraction of the price. However, before doing business with them, make sure that they have adequate experience in films.

The PPM does not have to be written by an attorney, but must be reviewed by a qualified attorney to assure it complies with all national and state regulations.

Stay tuned for the next article in our 4 Part Series: What Goes Into a PPM?

 

Fuzzies – House

Book 2 of Fuzzies is underway and I wanted to share a sample from the artist, Vovik.  He hails from the Ukraine and he brings a real sense of magic and happiness to his art, which will translate well to the property.

The sample is his rendition of a Fuzzy house.

Lateral Epicondylitis Debridement

That is the name of the procedure I had done today. For the last three years I have been grappling with serious left elbow pain – and I am a lefty. It started bad, then I maintained and managed the pain with Accupuncture, but it came roaring back and has just been debilitating for the last 6 months. I haven’t been able to train for at least 3 of those, and it affects everything I do – including sleep.

But hopefully the ordeal is over and I can let the healing begin. I even have some deer antler velvet waiting for me…

Work of Art

No, I’m not talking literally. This is more of a figurative work of art.  A masterpiece painted by a High School senior from upstate NY with his lacrosse stick.  Gale Thorpe – son of lacrosse legend Regy Thorpe – who will be dressing up for the Syracuse Orange next year – stuck one of the filthiest goals you will ever see (on any level) last week. And by filthy I mean awe-inspiring.

This, to me, is a thing of beauty.  Something that most people can’t appreciate because they don’t realize how hard it is to achieve. A play like this is why lacrosse is the greatest sport on the planet.

Gale Thorpe Goal – Tri-State MLK High School National Indoor Lacrosse Tournament from Lax Ally Video on Vimeo.

Back up and running… literally.

It’s been about a month since my last post.  Besides Christmas and New Years, I had some personal things happen to me since then.  On New Year’s Eve I got t-boned by some jerk in a hurry.  I somehow walked away with nothing but a headache for a few days, but my car wasn’t so lucky.  Being just outside the city on Long Island, you absolutely need a car to get around… and what followed and continues is a constant, full-time job of dealing with insurance companies, sleezy used car salesmen, mechanics and a lot of hours at the computer researching used cars in my price range (which was very low).  I’m back behind the wheel finally and things are getting back to normal. Kind of.  I’m going to have to go to small claims court to get any out of pocket expenses from this guy.  Unfortunately I can’t sue for the time lost at life.

I hope to be back to posting regularly next week.  There are plenty of updates on R.E.M., Bulderlyns, Chasing Rabbits, White Space (although I can’t really talk about them yet – but it is going well) and my next film, Lunatic.  I need to post my top 10 films of 2012 (taking into account this accident and how it screwed up my ability to see some end of the year movies), as well as my company year end recap.

 

Top 5 Christmas Movies

Because I celebrate Christmas, here is my Top 5 list of my favorite movies about the holiday.

• A Christmas Story
• Christmas Vacation
• Home Alone
• How the Grinch Stole Christmas (Animated)
• Emmett Otter’s Jug-band Christmas 

Honorable Mention

• Scrooged

Overcome with Joy

Every now and then it hits me that I’m living my dream.  And I have been able to do it my way (coming right out of grad school as a producer, not an assistant), working only on projects I choose, not beholden to anyone.  And ideally those are projects that I love.

And for the most part, those are projects that I write myself. Not to slight any of my other little darlings, but my favorite is Chasing Rabbits.  And now that the book is really underway, I get artwork in and it literally makes me tear up. Like a complete pansy. Because my goal is to please myself. I believe that if I can please myself, my bar of quality is high enough that I can please a huge audience. I’m limited, or I have been, by budget so far – but I have been consistently producing things that far exceed their budget.  And then I get pages like this, which may not seem like much right now – just pencils – with very little context. But it makes me rejoice that I get to do what I love, and I get to work with someone like Zsombor who somehow nails these things that I thought were only in my head.

(I should also post script this: it’s not so much that I am gifted, but that I am able to work with people who are gifted)