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DISCLAIMER
THE CONTENTS OF THIS DOCUMENT SHOULD NOT BE TREATED AS ADVICE. IF YOU ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS DOCUMENT YOU SHOULD CONSULT A PERSON AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000.
This document and any other information you have received or receive from the Company is being issued by IU Film Ltd (the Company) to a limited number of parties in connection with the proposed issue of Ordinary B Shares by the Company. By accepting this Information Memorandum, you acknowledge and agree that all the information in this Information Memorandum and as otherwise provided to you by the Company is confidential to the Company and you agree not to disclose any of it to any third party nor to use any such information for any purpose other than as set out in the following paragraph without the Company’s prior written approval.
The purpose of this document (the “Information Memorandum”) is to assist the recipient in deciding whether they wish to apply to subscribe for Ordinary B Shares in the Company. This Information Memorandum does not constitute an offer for the subscription, sale or purchase of shares or other securities described in it.
This Information Memorandum is being distributed on the basis that each person in the United Kingdom to whom it is issued is reasonably believed to be such a person as is described in Article 19 (Investment professionals), Article 48 (Certified High Net Worth Individuals), Article 49 (High Net Worth Companies, Unincorporated Associations etc.), Article 50 (Sophisticated Investors), Article 50A (Self-certified Sophisticated Investors) and Article 51 (Associations of High Net Worth or Sophisticated Investors) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or is a person to whom this Information Memorandum may otherwise lawfully be distributed. Persons who do not fall within such descriptions may not act upon the information contained in it.
To subscribe for Ordinary B Shares, the Application Form included with this document must be completed and returned as soon as possible so as to be received by post or by hand (during normal business hours) by the Company at 10 Lea Court, 143 Broad Lane, London N15 4QH, by no later than January 31st 2015, the initial closing date. The full procedure is set out in the section headed “Terms and Conditions On Which Applications Are Made” on pages 23 - 26 of this document and the accompanying Application Form.
This Information Memorandum does not constitute an offer, or the solicitation of an offer, in relation to shares in any jurisdiction in which such offer or solicitation is unlawful. The distribution of this Information Memorandum in jurisdictions other than the United Kingdom may be restricted by law, and therefore persons in other jurisdictions into whose possession this Information Memorandum comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of securities laws of any such jurisdictions.
In making an application for Ordinary B Shares, no person may rely on any information or representation, warranty or statement save as expressly set out in this Information Memorandum and accordingly, in the absence of fraud and/ or fraudulent misrepresentation, neither the Company nor any shareholder, director, employee, agent or advisor of the Company nor any other person shall have any liability for any information or representation, warranty or statement communicated to you which is not contained in this Information Memorandum and in particular but without limitation or prejudice to the foregoing, you acknowledge that there is no guarantee that any valuations, forecasts and/or projections included in this Information Memorandum or otherwise will be met.
The contents of this Information Memorandum have not been verified or approved by Simons Muirhead & Burton.You are strongly advised to read the risk factors involved in this investment on page 21 - 22 of this Information Memorandum. You are strongly recommended to consult a qualified financial advisor if you have any questions about this Investment or this Document.
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2 Disclaimer
3 Contents Page
4 - 5 Synopsis
6 Financial Requirements and Recoup Procedure
7 Tax Breaks Q&A
8 Producers’ Note
9 Director’s Vision
10 Cast
11 Crew Page 1
12 Crew Page 2
13 Crew Page 3
14 Locations
15 Marketing
16 Target Audience
17 Management Team
18 Status and Schedule
19 Sales Estimation Table
20 Investment Benefits
21 - 22 Risk Factors
23 - 26 Terms and Conditions
27 - 30 SEIS/EIS Basics
31 - 34 Articles of Association
35 Business Services
CONTENTS
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Unfortunately, on a dusty road passing not too far from the girls outpost, a shipment of zombies bound for Karl’s club have escaped from an overturned trailer. Being zombies, they follow the nearest noise and light.....
Oblivious to the peril slowly heading their way, the pool party gets hot and heavy. Todd, however, isn’t in any state for action of that kind due to his excessive drugs consumption - and wanders off into the darkness to “chill out” alone. Once Zara has gone to bed, Liz is left on her own, and she decides on a midnight swim. Unfortunately for her, she is joined by a zombie who falls into the pool. She just about manages to escape, and kills the zombie with a parasol.
Alex and Big Jim return to the house thinking they have made it back safely, only to find that there is just as much danger here as they left behind in the club. They rush to get inside, but not before they mistake the highly intoxicated Todd for a zombie and kill him. A distraught Rupert tries to leave the villa to see his friend Todd and is bitten on the hand by a zombie.
Our story starts in grey, rainy England, where three teenagers and best friends, Alex, Az and Big Jim are looking forward to all the fun in the sun they can find, on their first holiday away from their parents. The only setback for Alex is having to stay in the same villa as his overbearing big sister Liz, her glamorous best-friend Zara, and Alex’s resentful ex, Ellie. The recent, matter-of-fact, zombie-outbreak has been and gone, and the UK has come out largely unscathed. However, Ibiza, being a Catholic country, hasn’t incinerated its walking dead, and has, instead, kept them as a dubious tourist attraction.Once they get to Ibiza, the youngsters are driven to their remote accommodation in the hills, by local eurotrash cabbie, Torval, in his campervan. The sleazy taxi driver offers them a few words of warning about the zombies on the island...
That night, the boys head to the back streets of San Antonio for some serious partying. From there, they head to a club with the promise of a dubious “Live Show”..., where they meet Karl, the nasty club owner and Maria the attractive promo girl for the club. Unfortunately, it is several zombies who provide the “live” entertainment and they promptly escape their shackles to wreak some zombie havoc. Carnage ensues amid the foam party as the club quickly fills with the newly undead and the once white foam turns blood red. Alex and Big Jim just about manage to make it out alive. They decide to head back to the villa, but leave behind Az who has passed out drunk in the toilets, blissfully unaware.
SYNOPSIS
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Now trapped in the villa, desperation sets in - they amputate Rupert’s arm with a rusty kitchen knife in an effort to catch the infected part and stop him becoming zombified and call Torval to beg him to come and rescue them. There is a tender moment amidst all this mayhem - faced with the impending apocalypse, unlikely-couple Liz and Big Jim open up to each other and end up sleeping together.
Meanwhile, back at the club, the promo girl Maria finds herself trapped by Karl in the basement full of zombies. Az wakes from his drunken slumber and proves himself an unlikely hero by rescuing her. Maria promptly returns the favour, saving them both from Karl.
At the villa, it turns out that the amputation was in vain and Rupert does indeed become zombified, attacking and infecting Alex. And much to Big Jim’s alarm, as he wakes up next to her, Liz has also become a zombie - infected by swallowing bloody water from the pool.
It’s then that Torval arrives, armed to the teeth with a shotgun and samurai sword. But he’s no knight in shining armour - bitten by a zombie, instead he takes everyone hostage. Until zombie Liz attacks him that is. Now taking charge, Ellie takes his shotgun, kills Liz and leads Big Jim and Zara outside. Escaping the villa, they find that Torval’s taxi is now completely surrounded by the undead. Taking careful aim to target as many zombies as he can and clear a path to the only means of safety, Big Jim fires the shotgun and Boom! he accidentally blows up the campervan.
It seems that all is lost, with no ammunition left in the shotgun and no means of transport, Big Jim, Ellie and Zara are surrounded by the approaching horde. Suddenly, there is the sound of bass booming from car speakers, and Karl’s limo rolls into view. Az and Maria have arrived just in time to rescue them!
With all the airports closed, the survivors drive to Karl’s yacht to escape the island. However, they still have to deal with the fact that Big Jim is about to become a zombie and that none of them know how to sail, navigate or even steer a boat...
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FINANCIAL REQUIREMENTS AND RECOUP PROCEDURE
Ibiza Undead has a maximum intended total production budget of £300,000. Included within this total is a 10% contingency reserve to cover any unforeseen costs. The Producers will use their best endeavors to ensure that the Film is made without using the contingency fund.
If the Production Company believes the commercial value of the Film can be improved by utilising part of the contingency fund, the Producers will provide sufficient reasoning, consult with and seek approval from the Executive Producers beforehand. Also included within this maximum budget is sufficient provision to attract top talent in the form of internationally recognised and respected actors and actresses.
All monies received, after tax, from the exploitation and sales of Ibiza Undead will initially go towards returning the investment capital in full plus 20%. This means investors hold first position on all Producers’ revenues received until they have fully recouped 120% of their initial stake.Once investors have been paid back 120% of their initial investment amount, they will receive a pro rata share of 50% of the net profits derived from the exploitation of the Film. The Production Company will be paid from the remaining 50%.
The Production Company will apply for and expect to receive film tax relief or tax credit from the UK Government. This can be up to 20% of a movie budget. Meaning that, as soon as the Film has broken even, investors will be in profit by up to 20%.
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TAX BREAKS - QUESTIONS & ANSWERS
Q. Are there any tax advantages available when investing in this film?
A. Yes. There are significant tax advantages that can be obtained by individuals making EIS investments. These include unlimited Capital Gains Tax deferral (or exemption for SEIS), Income Tax Relief at 30% for EIS (50% for SEIS), protection from Inheritance Tax, Loss Relief and zero tax on all profits (no CGT to pay on gains). Please see pages 27- 30 for more detailed information and examples.
Q. How can you claim these tax advantages?
A. Submit your tax return as normal stating your investment in IU Film Ltd. Include a copy of the share certificate and the SEIS3/EIS3 certificate we provide for you. It is that simple.
Q. If the film project returns are lower than predicted, what would happen?
A. For a total budget spend of £300K the SEIS loss relief advantages effectively limit your downside to 40% (as a 20% tax payer), 30% (as a 40% taxpayer) or 27.5% (as a 45% tax payer) of your original investment at current rates.
Here is an example of the cash effect of the film breaking even (ie. 100% of the film budget is recovered) at the end of the three years assuming 50% income tax relief for investors who hold SEIS qualifying shares.
Initial Investment £10,000
Less income tax relief at 50%
£(5,000)
Net cost of Investment £5,000
If Investment breaks even
£(10,000)
Tax free net profit £5,000
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PRODUCER’S NOTE
Elisar Cabrera, Producer
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Recently London’s leading morning newspaper Metro declared that zombie movies are “taking over Hollywood”.
Just 10 years ago zombies were relegated to the horror and B-Movie section of video and DVD stores. But times have changed and films by mainstream directors such as Danny Boyle’s 28 Days Later, Edgar Wright’s Shaun of the Dead and Paul WS Anderson’s Resident Evil franchise mean zombies have slowly and surely become a mainstream movie attraction. Now in 2013 we have Brad Pitt starring in World War Z, the biggest, most expensive zombie film ever made.
Zombies are big business.
Which leads us to Ibiza Undead. As a British film, Ibiza Undead will be placed in the marketplace in its own unique way. Our target audience is not just the horror fans who avidly buy any horror movie on DVD with a good reputation. Our audience for Ibiza Undead is more mainstream than that. The Film is a comedy and will take the familiar subject of “Brits abroad” and give it a zombie comedy spin. Ibiza Undead should appeal to fans of hit British films such as The Inbetweeners Movie, St Trinians, Shaun of the Dead, Attack The Block, and Kick Ass.
With over 10 years of distribution experience I am very familiar with the zombie genre. A good zombie film always sells well (I sold the international rights to the director’s cut of the classic zombie film Dawn of the Dead). Its always been my ambition to produce a zombie film that will stand out as having its own unique take on the genre. That’s what I have found in Andy Edwards’ Ibiza Undead, which has all the hallmarks of a British movie comedy hit.
The apocalypse in this world begins in the sun soaked, alcohol fuelled world of the Ibiza summer nightclubs. Young Brits on holiday out for a good time, not quite realising the impending end of the world is actually happening on their doorstep and still trying to find ways to hook up with the opposite sex.
Our team is a talented production crew who are all used to delivering high budget level production values at low cost. By keeping the budget at a sensible level, this Film has every chance to be both a box office hit as well as a financial hit for investors. And just maybe we will have created the next British movie franchise.
DIRECTOR’S VISION
Ibiza Undead is the result of many years hard work at the zombie coalface, beginning with the original Houseparty of the Dead short film. Now, several years and hundreds of zombies later, I’m insanely excited to bring my vision of the zombie apocalypse to the big screen in epic style.
In a world overrun with sub-standard and niche zombie content, Ibiza Undead has the unique hook needed to make it stand out and appeal to a mass market. The title alone is a two word pitch for the film - guaranteed to raise a smile and and the sentiment “hell yeah, I’d go and see that film!”
My mission is to make it live up to the film that you envisage upon hearing that title, and then go beyond that - delivering all the blood and babes you’d expect, along with some twists and surprises along the way. Ibiza Undead will be a film with humour, heart, and memorable characters - vital ingredients to capture the audience’s imagination.
Style and cinematography will also be vitally important to Ibiza Undead - we have a great Director of Photography on board to capture the excitement and buzz of Ibiza - the exotic locations, the gorgeous cast - and all topped off with an ultra-cool soundtrack of course! All of this before the zombies even appear!
As for the zombies themselves, as many of the special effects as possible will be practical effects, with CGI only used to enhance these. As a zombie purist myself, I know that the horror audience feels the same way, so skillful practical gags and gore are the way to go.
We are blessed with an experienced and enthusiastic film crew, who are skilled at delivering production value far in excess of what is expected on a micro budget production. Ibiza Undead will look a million dollars even if it doesn’t cost that!
Andy Edwards, Writer/Director
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CAST
Jordan Coulson as AlexJordan is a young British actor who has previously appeared in Harry Potter and the Deathly Hallows and The Wolfman. Expect to see a lot more of Jordan in the future as we are sure he will become a huge star.
For Ibiza Undead we have gathered an attractive and talented young ensemble cast of up-and-coming actors who have film and TV experience. The following actors have all been confirmed.
Ed Kear as Big JimActor, writer and comedian Ed is best known for North+Sense, Untitled: The Last Days of the Premier League and This Isn’t It. Ed will be appearing in a new comedy drama on BBC3 later in 2014. Ed is also currently writing a series for Baby Cow Productions and a new feature film about kidnapping Ricky Gervais
Hormudz Todiwala as AzHormudz (affectionately known as Homer), is an actor with a real talent for expressive comedy. He can currently be seen appearing in the World Cup advertising campaign featuring football legends Pele and Ronaldo.
Emily Atack as LizEmily is perhaps best known for her role as Charlotte in E4’s multi-award winning series The Inbetweeners. A regular on British TV shows, she is popular in the UK tabloid press and magazines such as FHM.
Cara Theobold as EllieCara played the part of Ivy Stuart in the incredibly popular ITV drama series Downton Abbey, receiving a cast nomination for a Screen Actors Guild Award. Now firmly on the Hollywood fast-track, Cara will greatly enhance Ibiza Undead’s international appeal.
Algina Lipskis as Zara Algina is a Lithuanian actress, based in London. Her previous roles include Natasha and Dead Space: Extraction. Algina’s audition for the role of Zara was inch perfect and we expect her career to take off soon.
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Marcia Do Vales as Maria Brazilian-born Marcia is a multi-talented individual. As well as playing the lead role in the Templeheart supported thriller Deranged, she also co-wrote and produced the film, proving her skills as a writer/producer as well as an actress.
PRODUCER - ELISAR CABRERA
Elisar has over 20 years experience in the film and television industry. As a keen horror fan he started his career early in the 1990s producing three made for US home video micro-budgeted horror films Demonsoul, Virtual Terror and Witchcraft X. He has directed television entertainment (Sex Goddesses on Playboy TV/Living UK) and was instrumental in bringing back wrestling to British TV screens with Revival on Bravo and Frontier Wrestling on Fight!
Elisar has experience in home video distribution and over 17 years experience in the international sales and acquisitions of feature films and TV dramas. After 10 years of actively selling feature films worldwide, Elisar returned to film production, setting up Capital City Entertainment to produce short films and web series. In May 2013 he produced the feature length thriller Love.Honour.Obey directed by Ate de Jong for Raindance Raw Talent.
He sat on the Board of Directors of the New Producers Alliance in the 1990s and was on the Board of Directors of Film Export UK – an industry body representing the UK international sales sector.
Elisar has also taught feature film marketing and selling courses at Raindance, the London Film Festival and the National Film and TV School. He currently heads Raindance Film Festival’s new feature film production and distribution division ‘Raw Talent’.
Elisar possesses a unique blend of production and marketing experience and will bring all of these skills to Ibiza Undead. He is an expert in social media and possesses a “little black book” filled with an impressive insider list of the top distributors in the world.
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Matt King as KarlMatt is an English actor, comedian and writer perhaps best known for his role as “Super Hans” in the smash hit Channel 4 TV series Peep Show. Matt has also appeared in Guy Ritchie’s RocknRolla and Bronson with Thomas Hardy.
Michael Wagg as TorvalMichael is an actor and writer, who has appeared in such films as Lara Croft Tomb Raider: The Cradle of Life, Mad World and The Digital Doorstop. Michael is also an occasional contributor to The Guardian and Observer newspapers.
Matt Kennard as RupertActor and producer Matt Kennard has worked extensively in several British TV dramas such as Coronation Street, Hollyoaks, The Bill and Doctors. Since 2009 he has been concentrating exclusively on film work, with roles in successful films such as Freight and Born of Hope.
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WRITER/DIRECTOR - ANDY EDWARDS
One thing Andy knows is zombies, having created the popular online series of shorts, Houseparty of the Dead, from which the inspiration to make Ibiza Undead came.
Andy’s debut feature, as one of three directors, was the horror anthology Three’s A Shroud. The film premiered at at the Empire, Leicester Square in October 2012, as part of the British Horror Film Festival, where it won the “British Horror Award”.
Described by Shock Horror Magazine as “the best UK Horror anthology you’ll see this year” and as “a chilling creepfest!” by Billy Chainsaw (Bizarre Magazine), the Film has been gathering critical acclaim, with Andy’s segment in particular getting all the praise.
“The strongest story out of the three...director Andy Edwards pulls it off and does it well” (Dean Boor, Shock Horror Magazine)
“an enormously enjoyable sci-fi/slasher romp directed with skill and panache by Andy Edwards.”(MJ Simpson, writer for SFX & Fangoria)
When not dealing with the undead, Andy has his own video production company creating corporate and online content for clients such as Capital Radio, Disney, and Spotify. He is also currently in pre-production on a short film based on a story by the novelist Iain Banks, which will star Sean Pertwee, and in post-production on a second horror anthology, Blaze of Gory.
LINE PRODUCER -LARA DOREE
Lara works in both theatre and film and runs Ludere Productions, a company which focuses on new writing. She has just finished line producing on Ate De Jong’s new film Love. Honour. Obey.(Ate directed the infamous 90’s classic film Drop Dead Fred). She is also currently working on comedy feature film Limbo with Jen X Films and developing a comedy series Day Jobs after its huge success as a pilot.
Lara has received a great deal of recognition for her casting abilities and as a result has been asked to be a part of casting panels or lead casting on all her projects to date. In 2011 she developed the stage play Concrete Jungle with Olivier Award winning writer Bola Agbaje. The play was first read at The Lyric Hammersmith where it was taken on by Wild Thyme Productions (The King’s Speech). The production then previewed at Riverside Studios, receiving nationwide programming offers from the preview.
Lara is currently managing Concrete Jungle, which will open for a full run early 2014. Her latest play Outed is currently being workshopped at the new Park Theatre, London.
Lara line produces and manages all her own projects and works freelance for independent production companies. Her films include Wax, which was in the official selection at Toronto’s Zero Film Festival and sold to Apple’s Applications division and A Very European Christmas which got much press attention throughout Europe.
CASTING - MANUEL PURO
Casting services for Ibiza Undead will be provided by Manuel Puro of Puro Casting Agency. Based in London, Puro is a full service casting company providing services across film, television, music videos, commercial and shorts.
A highly experienced casting company, Puro have supplied casting services to movies such as Moon, Thick As Thieves, The Seasoning House and Scar Tissue. Manuel has nearly 40 movies under his belt and has cast some of the biggest names in the UK and Hollywood.
DIRECTOR OF PHOTOGRAPHY - EBEN BOLTER
Eben Bolter is a rising talent in cinematography, who has built and shaped his career shooting with the much-revered Alexa and Red cameras to create iconic, modern imagery on a large number of challenging and varied narrative films.
Eben has completed no less than eight indie features over the past two years, including Confine which was nominated for “Best UK feature” at Raindance Film Festival 2012, starring Daisy Lowe and Alfie Allen and directed by Tobias Tobbell. More recently Eben shot the film Borderlands, directed by Elliott Goldner and produced by Jenn Handorf through Metrodome Pictures, and has recently wrapped on a “‘road movie” feature in LA called Bruno & Earlene Go To Vegas, produced and directed by Simon Savory.
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LOCATIONS
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Ibiza Undead was shot on the island of Ibiza and in the UK. The interior club scenes and huge zombie action was filmed at the Pacha nightclub in London, while the glamourous sun, sand and villa action was shot on location in Ibiza. The benefits of shooting in Ibiza were enormous. The exodus of foreign nationals had left a string of coastal towns with vacant villas that were incredibly cheap to rent. With a population that is currently 27% unemployed, film crews were willing to work for unbeatable rates. This meant that more of the Ibiza Undead budget could go directly into talent and special effects. Shooting in Ibiza had other technical benefits such as an abundance of natural light, meaning less expensive lighting equipment was required. And that’s not to mention the natural beauty of the country, giving us a sumptuous looking Film.
The Producers have close working relationships with a number of high profile magazines, websites and movie bloggers that will be invited to visit the sets and interview the cast. Their published and online articles will all be designed to stir up early publicity for the Film and get the initial “buzz” going.
The Producers will use social media and press releases throughout the production process to raise and nurture the Film’s profile. Well-known websites, such as Facebook, Twitter and Instagram will receive regular updates of exclusive material and could have a huge impact on the success of the film without any additional cost.
A “teaser trailer” will be cut very early for Ibiza Undead, which will be released online to raise even more awareness.
For a film set in Ibiza, the soundtrack is obviously going to be very important. We are looking for a tie-in deal with a record label(s) to secure the most cutting-edge soundtrack possible. By using the Film to promote their up-and-coming artists and DJs, we not only get a great soundtrack, but also avoid having to pay licensing fees for the tracks used.
Getting bands, DJs and artists on board also gives us scope for cameo appearances in the Film, and spin-off possibilities for live events and premieres.
SOUNDTRACK
MARKETING
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Ibiza Undead initially aims to have the babes, blood and fx-work to appeal to the hardcore horror fan. These are the guys (and nowadays equally likely to be girls) who, if they like your film, can do your marketing for you, on blogs and social networks. These are also the people who’ll be queuing up to buy the limited edition DVD with signed artwork, and provide you with an ongoing source of revenue.
However, we’re also going after the mainstream 15-34 audience. The success of the Saw and Hostel films shows that horror, even torture-porn, is no longer in the exclusive domain of teenage boys, as mainstream audiences flock to be terrified. The female audience is increasingly important for horror releases (over half of the audience for My Bloody Valentine 3D was female for example) and with strong female characters and attractive male talent, we’re confident we’ll be able to attract a wide, mainstream audience.
Combining this with a comedy element, the incredible success of The Inbetweeners shows that with relatable characters and enough gross-out gags, that elusive teen audience will respond in droves.
In addition to all of this, there is the Ibiza element too, attracting a whole new audience of clubbers, music fans and holiday makers, past and present. The Ibiza experience, whilst an iconic part of British youth culture for the last 20 years or so, has a checkered history on film (It’s All Gone Pete Tong anyone?) but any film that can properly capture some of the spirit of Ibiza should guarantee a large and loyal following.
TARGET AUDIENCE
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MANAGEMENT TEAM
EXECUTIVE PRODUCERS - TEMPLEHEART FILMS
Templeheart has supported 21 movies in the last three years, all of which have secured UK and international distribution. Templeheart will ensure Ibiza Undead has an expensive look for relatively minimal expenditure, thus creating maximum potential for return on investment (ROI). Templeheart provide budget control and Executive Production Services to maximise efficiencies in time and costs. Their experience, contacts, commercial thinking and direct links to the film industry marketplace makes them an essential to the production process.
EXECUTIVE PRODUCERS - ENMAR PRODUCTIONS
EnMar Productions was formed in 2008 by Marcia Do Vales and Keven Kane. Previously, they co-produced the hit Disney channel show for children, Lombrices, and produced a music video for Planeta Murphy. EnMar has also been responsible for numerous TV pilot shows in Spain including Loft Studio and Planta 26. 2011 saw EnMar produce their first full feature film, Deranged, with British action star Craig Fairbrass, which was released in the UK through 4 Digital in May 2013.
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Ibiza Undead has already completed pre-production and principal photography. The Film was shot on Ibiza island and on location in London during October and November 2013.The Film is currently in post production. Investors joining Ibiza Undead during the post production phase will enjoy a shorter waiting period to see the completed film.
PRE-PRODUCTIONThe first stage of a film production. This is where all the elements needed for the shooting of the film are put in position. Actors are cast, locations are sourced and equipment hired. For Ibiza Undead we prepped for eight weeks in the UK before taking the heads of departments out to Ibiza one week before shooting commenced.
PRINCIPAL PHOTOGRAPHYThe period of time when cameras are rolling and the bulk of the script is shot, including all of the dialogue scenes with actors. The shoot lasted a total of 22 days in both Ibiza and the UK.
POST-PRODUCTIONThis is where the film is edited, scored and mixed and where computer generated visual effects are created. This usually takes around 25 to 35 weeks.
SALESThe period when the completed film, including promotional trailer, is handed to the sales agent to begin to market and sell the film. Sales agents are responsible for negotiating the terms of distribution for any deal struck with a film distribution company.
October/November 2013- Shooting completed
January-May - Picture edit, visual FX, sound design, music and score.
May-August - Sound mix, picture grade and output.
Autumn/Winter - SELL! SELL! SELL!
STATUS & SCHEDULE
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SALES ESTIMATION TABLE
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Ibiza UndeadSales Estimation Table in U.S. Dollars
Territory Estimated Return USD (Mid) Estimated Return USD (High)
Europe 150,000 250,000
Eastern Europe 80,000 160,000
UK 150,000 320,000
North America 150,000 350,000
Latin America 75,000 150,000
Asia and Pacific Rim 135,000 320,000
Other 70,000 150,000
Total 810,000(506,250 GBP)
1,7 Million(1.06 Million GBP)
These figures are based on estimated Minimum Guarantees to be paid by film distribution companies for the rights to distribute the Film theatrically, on DVD and other ancillary means such as video on demand, airlines and television. These estimates do not include potential and additional earnings from royalty deals or any bonus payments following successful releases.
These figures are based on the assumption that the Producers make the movie to the high standard they are expecting and should not be used to aid any investment decision.
INVESTMENT BENEFITS
As well as participating in the profits of the Film, the following perks and benefits are available to investors in IU Film Ltd.
1. The opportunity to appear in the Film as an extra.
2. Enjoy a visit to the film set and meet with the cast and crew.
3. Attend the movie premiere and after show party.
4. Place your name on the movie credits.
5. Be fully updated on the progress of the production by Templeheart staff on a regular basis..
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RISK FACTORS
Investors should consider carefully the following factors and other information in this Investment Memorandum before they decide to invest in the Ordinary B Shares. An investment in the Ordinary B Shares involves risks and Investors may lose part or all of their investment.
All of the information contained in this Investment Memorandum should be considered in the light of the risk factors set out below.
The principal risk factors considered by the Directors to be relevant when considering an investment in the Ordinary B Shares are as follows (this is not an exhaustive list and Investors should consult their financial advisers before investing):
Risks relating to an investment in shares
Investing in the Ordinary B Shares is speculative and involves a high degree of risk and should only be made by Investors who can afford to lose their entire investment. Additionally, there is no guarantee of return on an investment in the Ordinary B Shares. If there is a return it is likely that this will vary in amount from time to time. The value of stocks or shares may go down as well as up. Any investment in the Ordinary B Shares should be seen as a medium to long-term investment.
As the Ordinary B Shares in the Company are unlisted/unquoted on a public market, it will be difficult to obtain valuation information and information regarding the extent of the risk involved. There are often greater risks involved in unquoted shares than quoted shares/securities.You may have difficulty selling this investment at a reasonable price and, in some circumstances, it may be difficult to sell it at any price.
Under the Company’s Articles of Association, the A Shares and B Shares have different voting rights. These affect, amongst other things, the voting rights attaching to the shares and the entitlement to any payment of capital or profit to investors. Please see pages 31 - 34 for more information on the rights attaching to Shares.
Risks relating to operating history, past performance and future performance
Past performance and historical information is not an indication of future performance. The Company’s actual performance could differ materially from projections. The Company will be operating in a competitive industry where the commercial risks are high. Audience reaction, initial reviews and public taste cannot be predicted. Any investment in a film production business such as the Company is, therefore, highly speculative and no guarantee of any return may be given.
The Company has not traded and has no established business or trading history. Consequently, evaluating the Company’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered by early-stage companies.
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Risks relating to taxation
Changes in government or government policy could affect the tax treatment of films and film investments, in particular if the film tax credit and/or EIS tax relief is withdrawn or reduced. This could have a material effect on the performance of the Company and any investment in the Company.To benefit from EIS relief the Company is required to carry on the business outlined in this Investment Memorandum during the three year period from the last allotment of Ordinary B Shares, or the date of commencement of trading if later. The Company fully intends to trade but failure could prejudice the continuing application of tax relief.Investors wishing to obtain EIS tax relief must satisfy certain criteria (such as retaining their shares for three years from the date of issue). Failure to meet these requirements will result in the tax relief not applying. Investors are advised to seek professional advice in this respect. There is no guarantee that EIS tax relief or the film tax credit will be ultimately obtained. This would have a material effect on the performance of the Company and any investment in the Company.At the time of this offer, both the UK Government and the British Film Institute have not published any plans for any changes and both recognise the value that film production in the UK benefits the economy.
Risks relating to income
If there is any return on the investment it is unlikely that this (or the initial capital invested) will be distributed to Investors before the expiry of three years from the closing date of the Investment. As a result of this and the tax rules, investing in the Company should not be seen as a short- term investment.
Risks relating to the film industry
The film industry is a high-risk sector and there is a significant risk that the Company may lose some or all of its investment as a consequence of which some or all of an Investor’s investment could be lost.The budget for the Film may be exceeded and the sales may not materialise or reach anticipated levels.There is a risk that the Film may not be completed notwithstanding that funds raised pursuant to the Investment were employed in the development and production, in which case, an Investor could lose some or all of their investment.The possibility does exist that different cast and/or creative teams to those outlined in this Investment Memorandum may be employed if the Directors believe that such changes are in the best interests of the Company.
Other risks
Inflation and currency exchange rates could increase the costs of producing the Film. If the Investment is less than fully subscribed or if the budget of the Film has to be increased, the Directors may seek to raise additional finance to complete the Film. Such additional finance may be obtained through a combination of loans from third parties, qualifying tax schemes, or by paying the crew, cast, equipment suppliers and other key personnel on a deferred basis.
Investors should note that any loan repayments or deferred payments may have to be made out of Gross Receipts of the Film before Investors receive any of their initial capital or return on their investment and/or that the investors’ share of net profits from the Film may be reduced.
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TERMS & CONDITIONS
TERMS AND CONDITIONS ON WHICH APPLICATIONS ARE MADE
1. Applications for Ordinary B Shares are subject to the terms and conditions included in this Information Memorandum as set out below
2. The basis of allotment will be determined by the Directors of the Company in their absolute discretion. The Directors reserve the right:
2.1 to reject any application in whole or in part or to scale down any applications or to accept applications on a “first come first served” basis or otherwise howsoever;
2.2 to extend the period during which the subscription list remains open; and
2.3 to treat any application as valid and binding on an applicant even if the Application Form is not complete in all respects or is not accompanied by a power of attorney where required.
If the Company does not receive applications to subscribe for more than 150,000 Ordinary B Shares at £1 each so that there is a total aggregate subscription price of at least £150,000 then the Directors of the Company will have the option at their absolute discretion without any liability or obligation to any existing shareholder of the Company and/or any other person to reject all applications for Ordinary B Shares in the Company and to return all subscription money sent in with such applications.If the Company does receive applications to subscribe for more than 150,000 Ordinary B Shares at £1 each so that there is a total aggregate subscription price of at least £150,000 then the Directors of the Company will have the option at their absolute discretion without any liability or obligation to any existing shareholder of the Company and/or any other person to produce the Film for this smaller budget.If the investment is less than fully subscribed or if the budget of the Film has to be increased, the Directors may seek to raise additional finance to complete the Film. Such additional finance may be obtained through a combination of loans from third parties, qualifying tax schemes, or by paying the crew, cast, equipment suppliers and other key personnel on a deferred basis. Investors should note that any loan repayments or deferred payments may have to be made out of Gross Receipts of the Film before Investors receive any of their initial capital or return on their investment and/or the Investors’ share of net profits from the Film may be reduced.
3. The Application Form should be completed in full and sent or delivered to the address set out on the Application Form together with a remittance for the full amount payable. Cheques must be payable to IU Film Ltd and crossed “Not negotiable” and should be drawn in sterling on an account at a branch (which must be in the United Kingdom, the Channel Islands or the Isle of Man and which must be an account in the name of the applicant). Electronic Transfers should be sent to IU Film Ltd at HSBC, sort code 400217, account number 41628216 quoting the name of the applicant.
The issue price of the Ordinary B Shares is £1 (one pound) per share.
Investors are advised to allow three full business days for delivery through the post and to use first class mail. Applications will not be acknowledged.
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All joint applicants must sign the Application Form.
All applicants must fill in and send to the Company either a Statement for Self-Certified Sophisticated Investor or a Statement for Certified High Net Worth Individual or the application must come from an independent financial advisor.
(Note: joint applicants may not be able to claim SEIS or EIS Relief in the desired ratios and should consider seeking professional advice before making a joint application)
4. The Company reserves the right to present all cheques and banker’s drafts on receipt and to retain certificates for Ordinary B Shares and any monies returnable pending the clearance of all cheques or pending investigations of any suspected breach of the terms applying to the application. No interest will be payable by the Company in respect of monies retained and returnable. All cheques, certificates and other documents sent or returned to applicants will be sent at the risk of the person(s) entitled thereto.
5. By completing and delivering an Application Form and in consideration of the Company agreeing to process your application, you irrevocably undertake and agree as follows:
5.1 to subscribe for the number of Ordinary B Shares specified in the Application Form, on the terms of, and subject to, the conditions set out in this Information Memorandum, including these terms and conditions and subject to the memorandum and Articles of Association of the Company;
5.2 to accept such Ordinary B Shares as may be allotted to you in accordance with Box 1 or such lesser number of Ordinary B Shares in respect of which this application may be accepted;
5.3 that all applications, acceptances, allotments and contracts arising from it will be governed by and construed in accordance with English law and that you submit to the exclusive jurisdiction of the English courts;
5.4 that you are not under the age of 18 and that if you sign the Application Form on behalf of somebody else or a corporation you have the authority to do so and such person will also be bound accordingly and will be deemed also to have given the confirmations, warranties and undertakings contained in these terms and conditions of application;
5.5 you authorise the Company or any of its respective agents to send by post a share certificate for the number of Ordinary B Shares for which your application is accepted and/or a crossed cheque and/or return your cheque(s) or banker’s draft(s) for any monies returnable, in each case at the risk of the person(s) entitled thereto, to your address (or that of the first named applicant) as set out in the Application Form and to procure that your name (together with the name(s) of any other joint applicant(s)) is/are placed on the Register of Members of the Company in respect of such Ordinary B Shares;
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5.6 that in making this application for Ordinary B Shares, you are not relying on any information or representation, warranty or statement save as expressly set out in this Information Memorandum and accordingly you agree that, in the absence of fraud and/or fraudulent misrepresentation, neither the Company nor any shareholder, director, employee, agent or advisor of the Company nor any other person shall have any liability for any information or representation, warranty or statement communicated to you which is not contained in this Information Memorandum and in particular but without limitation or prejudice to the foregoing, you acknowledge that there is no guarantee that any valuations, recoupment, forecasts and/ or projections included in this Information Memorandum or otherwise will be met;
5.7 on request by the Company, to disclose promptly in writing to it any information which it may request in connection with your application;
5.8 that the remittance accompanying your Application Form will be honoured at first presentation and agree that if it is not so honoured the Company may (without prejudice to any other rights it may have) allot or sell the Ordinary B Shares to some other person in which case you will have no right of action or other claim against the Company or any of its Shareholders, Directors, Employees, Agents or Advisors;
5.9 that you are either an Investment Professional, a Certified High Net Worth Individual or a Self-Certified Sophisticated Investor for the purpose of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005;
5.10 that you have read a copy, understood and agree to the terms and conditions contained in the Information Memorandum including the risk factors on pages 21-22 and have taken all the appropriate professional advice which you consider necessary before submitting your application and that you are aware of the special risks involved in participating in an investment of this nature, and understand that your application is made upon the terms of the Information Memorandum; and
5.11 that in relation to the transactions described in the Information Memorandum, advisers of the Company mentioned therein are acting for the Company and not for you or on your account and that accordingly will not be responsible to you for providing protections afforded to their clients, for advising you on any transaction described herein, or for ensuring that any such transaction is suitable for you.
6. No person receiving a copy of this document or an Application Form in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him, nor should he in any event use such Application Form unless, in the relevant territory, such an invitation or offer could lawfully be made to him or such Application Form could lawfully be used without contravention of any registration or other legal requirements. It is the responsibility of any person outside the United Kingdom wishing to make an application hereunder to satisfy himself as to and to ensure full observance of the laws of any relevant territory, any other formalities requiring to be observed in such territory and paying any issue, transfer or other taxes required to be paid in such territory arising out of or in connection with the issue of this document in such territory (and/or any invitation therein), the making of an application hereunder by him and/or otherwise relating to any perceived fundraising or investment related activity by the Company in such territory.
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7. The Company reserves the right to treat any application, which does not comply strictly with the terms and conditions of the application as nevertheless valid.
8. No letters of allotment or other renounceable or temporary documents of title or receipts will be issued in respect of accepted applications but share certificates will be despatched within 30 days of allotment.
9. Applications will be irrevocable.
10. If you have not already returned a certificate confirming that you are a Certified High Networth Individual and/or Self-Certified Sophisticated Investor for the purpose of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, then unless you are an Investment Professional for the purposes of such Order, you must return such a statement to the Company. Copies of the statements are provided with the Application Form. Please contact Templeheart Films Ltd at [email protected] or call 0208 127 0141 if you require a further copy of the form of statement.
Important - Money Laundering Regulations
In order to ensure compliance with the Money Laundering Regulations 2007, the Company is entitled to require, at its absolute discretion, verification of the identity from any person lodging an application form for Ordinary B Shares (the “Applicant”) including, without limitation, from any Applicant who either:
(i) tenders payment by way of a cheque or banker’s draft drawn on an account in the name of a person or persons other than the Applicant; or
(ii) appears to the Company to be acting on behalf of some other person.
In the case of (i) above, verification of the identity of the Applicant may be required. In the case of (ii) above, verification of the identity of any person on whose behalf the Applicant appears to be acting may be required.
Pending the provision of evidence satisfactory to the Company as to the identity of the Applicant and/or any person on whose behalf the Applicant appears to be acting, the Company may, in its absolute discretion, retain an Application Form lodged by an Applicant and/or the cheque or other remittance relating thereto and/or not enter the Applicant on the register of members or issue any certificate in respect of Ordinary B Shares allotted to the Applicant. If, within a reasonable period of time following request for verification of identity and in any case no later than 3pm on the relevant date of allotment, the Company has not received evidence of the identity of the Applicant satisfactory to it, the Company may, at its absolute discretion, reject any such application in which event the remittance submitted in respect of that application will be returned to the Applicant without interest (without prejudice to the rights of the Company to undertake proceedings to cover any loss suffered by it as a result of the failure of the Applicant to produce satisfactory evidence of identity).
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SEIS and EIS Tax Relief & Rules
The reliefs, described below, which must be claimed, are available provided the Investor and the SEIS/EIS Qualifying Company comply with the EIS legislation.
EIS
~ 30% Income Tax relief on investments of up to £1m ~ One year carryback for Income Tax~ Income Tax loss relief in year of sale if applicable~ CGT exemption on any gain~ Shares must be held for three years to get these reliefs
SEIS
~ 50% Income Tax relief on investments of up to £100,000~ One year carryback for Income Tax~ Income Tax loss relief in year of sale if applicable~ CGT exemption on any gain~ Shares must be held for three years to get these reliefs~ 50% CGT exemption on a gain reinvested in SEIS during 2014/15Income Tax Relief
EIS income tax relief allows investors to reduce the amount of their liability to income tax, provided they hold the EIS shares for a three-year period. Income tax relief is available to individuals (counting husbands and wives separately) in respect of the amount subscribed for eligible shares in an EIS Qualifying Company at the rate of 30%, on a maximum of £1,000,000 for any one tax year. The Investor has the right, in respect of each separate investment, to elect to carry back the full amount of the relief subject to a maximum of £1,000,000 for 2014/15 tax year and apply it to the previous year. This relief is usually either passed to the Investor in the form of a tax rebate or via an adjustment in PAYE code. EIS Example
Initial Investment £10,000
Less income tax relief at 30% £(3,000)
Net cost of Investment £7,000
SEIS/EIS BASICS
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SEIS income tax relief allows investors to reduce the amount of their liability to income tax, provided they hold the SEIS shares for a three-year period. Income tax relief is available to individuals (counting husbands and wives separately) in respect of the amount subscribed for eligible shares in an SEIS Qualifying Company at the rate of 50%, on a maximum of £100,000 for any one tax year. This applies regardless of the rate of tax at which the individual is taxed. Investors can also use the tax reduction against their income tax liability for the previous tax year, or can split the reduction between the two tax years.
SEIS Example
Initial Investment £10,000
Less income tax relief at 50% £(5,000)
Net cost of Investment £5,000
Capital Gains Tax Deferral Relief for EIS Subscriptions
Where an individual has a chargeable capital gain, a claim may be made to defer the assessment of that chargeable gain, or any part of it, which arises within the period of three years before or one year after an investment has been made in an EIS Qualifying Company. The amount of gains that may be deferred is subject to no maximum and is limited only by the amount subscribed in the EIS qualifying company. Gains may be deferred until the shares are disposed of or, if earlier, until certain other events occur. A gain may become payable again once the shares in the EIS qualifying company have been sold.
Example (cash effect at the outset)
Initial Investment £10,000
Income Tax Relief at 30% £(3,000)
Capital Gains Deferral £(2,800)
Net cost of Investment £4,200
Capital Gains Tax Exemption
There is no CGT payable on gains in respect of investments made in an SEIS/EIS Qualifying Company (on which SEIS/EIS Income Tax Relief has been obtained and not withdrawn) where the investments have been held for at least three years from the date of subscription or from the date of commencement of the SEIS/EIS qualifying company’s trade if later.
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ExampleTax free profit following a gain of £6,000 and income tax relief of 50%
Initial investment £10,000
Less income tax relief at 50% 50%
Net cash outlay £5,000
Hypothetical residual value of investment after 3 years
£16,000
Total gain tax free £11,000
Loss Relief
If any investment in an SEIS/EIS Qualifying Company realise capital losses, the loss relief applies (net of initial income tax relief). This loss can be offset against income tax of the same year or a preceding one, or against capital gains of the same year or carried forward. Loss relief can reduce the Investor’s exposure to 27.5% of the original investment (assuming a 45% tax payer offsetting against income tax relief).
Example (cash effect of a total loss at the end of 3 years on SEIS qualifying shares)
Initial Investment £10,000
Less income tax relief at 50% £(5,000)
Net cost of Investment £5,000
If Investment fell to £0, Net loss £(5,000)
Loss relief at 45% £2,250
Net loss £(2,750)
Percentage of Original Outlay 27.5%
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EIS and Inheritance Tax Relief Summary
Shareholdings in EIS Qualifying Companies may fall outside of Inheritance Tax (IHT) after two years due to the interaction with Business Property Relief. This enables potentially significant holdings to be preserved without being taxed. The current exempt level for IHT is £325,000 with any excess being taxed at 40%. The following is a summary of the main provisions of Business Property Relief for Inheritance Tax;
Inheritance Tax Total Relief
If the investment has been held for at least two years before death, the investment should, in most cases, be entirely free from Inheritance Tax and with the other benefits of the EIS, the effective cost of investment may be reduced to nearly zero.
Example
Total investment £10,000
Less income tax relief at 30% £(3,000)
Capital Gains Tax deferral £(2,800)
IHT relief @ 40% £(4,000)
Net cost of investment £200
Basic Rules
Relief is available for transfers of certain categories of business and of business assets (“relevant business property”), if they qualify as “relevant business property” and the transferor has owned them for a minimum period. The relief is available for transfers in life and on death. It is also available when relevant business property is chargeable as settled property. The relief reduces the value transferred by a transfer of relevant business property.
Relevant Rates of Relief
The rate is 100% for shares which are not listed on a recognised exchange (“unquoted shares”) and/or traded on AIM or PLUS Markets. Relief may be restricted though, if at the time of the transfer the company owns an asset that is not required for use in the business.This section is only a condensed summary and should not be construed as constituting advice, which a potential investor should obtain from his own independent investment or taxation adviser before applying for shares. None of the Company’s Board, Investment Adviser, Investment Partner or the Advisers to the Company can guarantee that an Investor will obtain any of the tax reliefs described above.
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STATUTORY AND GENERAL INFORMATION
1. The CompanyThe Company was incorporated as IU Film Ltd and registered in England and Wales on June 18th 2013 under the Companies Act 2006. The principal legislation under which the Company operates is the Companies Act 2006 together with the regulations made thereunder.
The Company’s registered office is at 44a Floral Street, London WC2E 9DA, United Kingdom. The liability of the members of the Company is limited.
The Company currently has no subsidiaries.
2. Share CapitalAt the date of this Document, the issued share capital of the Company is 11 Ordinary A shares of nominal value £1 per share. 9 are held by Lyndon Gary Baldock (Company Director), 1 is held by Andrew John Edwards (Company Director) and 1 by Elisar Cabrera.
Assuming investors apply to subscribe for 300,000 Ordinary B Shares in the Company, the share capital of the Company will be 300,011 consisting of 11 Ordinary A Shares of £1 each and 300,000 Ordinary B Shares of £1 each.
3. Articles of AssociationThe Articles of Association of the Company (the “Articles”) are available for inspection at the Registrar of Companies and at the address specified in paragraph 1 above. The Articles contain provisions, among other things, to the following effect:
3.1 VotingWhatever the number of Ordinary A Shares or Ordinary B Shares in issue at any time, the Ordinary A Shares shall confer upon the holders thereof the right (pro rata to the number of Ordinary A Shares held by each of them) to cast an aggregate of 100% of the voting rights capable of being cast on all matters decided by vote at general meetings of the Company. The Ordinary B Shares will not entitle the holders to vote at any general meeting (save at a meeting of Ordinary B Shareholders where it is proposed to vary the rights attaching to the Ordinary B Shares). General meetings of the Company can be held with a quorum of 1 or more qualifying persons present, provided such person(s) are the holder(s) for the time being of the majority of the Ordinary A Shares in issue.
3.2 DividendsAny available profits (save for any reserves available for distribution following a reduction of the Company’s share capital which will be applied as set out under Reduction of Capital below) which the Company resolves to distribute shall be paid as follows:
(a) first, any such proceeds shall be paid to the holders of the Ordinary Shares (pari passu as if they constituted Shares of the same class) pro rata to their respective holdings of Ordinary Shares until each holder of Ordinary Shares has received £1.20 for each Ordinary Share held by him less any amounts actually previously received by that Shareholder by way of dividend and/or under Liquidation or Reduction of Capital in respect of such share;
ARTICLES OF ASSOCIATION
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(b) second, any further such proceeds shall be paid as follows:
i. 50 percent in value of such dividends less the Net Profits Reserve shall be paid to the holders of Ordinary A Shares; andii. 50 percent in value of such further dividends shall be paid to the holders of Ordinary B Shares.
Where the Company agrees to pay any share of net profits from the Film produced by the Company to any cast and/or crew of such Film (other than as the holders of Ordinary B Shares) then save where any such cast and/or crew are issued Ordinary A Shares in respect of any such share(s), the total amount of any such share(s) of such net profits at the relevant time will be the “Net Profits Reserve”.
The percentages of further proceeds payable to the holders of the Ordinary A and Ordinary B Shares will be adjusted on a pro rata basis in the event that Ordinary B Shares with a par value of less than an amount equal to the full final production cost of the film provisionally entitled ‘Ibiza Undead’ to be produced by the Company are issued so that the percentage of such further proceeds payable to the holders of the Ordinary B Shares will be reduced on a pro rata basis and the percentage of such further proceeds payable to the holders of the Ordinary A Shares increased by the same amount such that such holders of Ordinary A Shares remain entitled to at least 50% of the gross amounts received by the Company in excess of those required to satisfy the payments under clause 3.2(a) above (less the Net Profits Reserve). If any Ordinary B Shares are bought back and/or cancelled by the Company then the percentage of such further proceeds payable to the holders of the remaining Ordinary B Shares in issue will be reduced by the same percentage as the number of Ordinary B Shares bought back and/or cancelled bears to the total number of Ordinary B Shares originally in issue and the percentage of such proceeds payable to the holders of the Ordinary A Shares will be increased by the same amount.
3.3 Share SaleThe proceeds of a Share Sale shall be applied (to the extent that the Company is lawfully able to do so and pro rata to the extent that not all the Shares are sold depending on the number of Ordinary A Shares and Ordinary B Shares being sold) in the following order of priority:
(a) first, any such proceeds shall be paid to the holders of the Ordinary Shares sold (pari passu as if they constituted Shares of the same class) pro rata to their respective holdings of Ordinary Shares sold until each holder of Ordinary Shares has received £1.20 for each Ordinary Share sold by him less any amounts actually previously received by that Shareholder by way of dividend and/or under Liquidation or Reduction of Capital below in respect of such share;
(b) second, any further such proceeds shall be paid as follows:
(i) 50% in value of such further proceeds (less an amount representing the Company’s Net Profits Reserve obligation in the context of the valuation of the Shares sold as agreed by the Ordinary A Shareholder Majority acting reasonably) shall be paid to the holders of the Ordinary A Shares sold in proportion to the number of Ordinary A Shares sold by each of them; and(ii) 50% in value of such further proceeds which the Company resolves to distribute shall be paid to the holders of the Ordinary B Shares sold in proportion to the number of Ordinary B Shares sold by each of them.
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The percentages of such further proceeds payable to the holders of the Ordinary A and Ordinary B Shares will be adjusted on a pro rata basis as set out in clause 3.2 above in the event that Ordinary B Shares with a par value of less than an amount equal to the full final production cost of the film provisionally entitled ‘Ibiza Undead’ to be produced by the Company are issued as part of this fundraising and/or Ordinary B Shares are subsequently bought back and/or cancelled.
3.4 Liquidation or Reduction of CapitalThe proceeds of a liquidation, reduction of capital or other return of assets (including any reserves available for distribution following a reduction of the Company’s share capital and any purchase of shares by Company from capital) shall be applied (to the extent that the Company is lawfully able to do so) in the following order of priority:
(a) first, any such proceeds shall be paid to the holders of the Ordinary Shares (pari passu as if they constituted Shares of the same class) pro rata to their respective holdings of Ordinary Shares until each holder of Ordinary Shares has received £1.20 for each Ordinary Share held by him less any amounts actually previously received by that Shareholder by way of dividend and/or under Liquidation or Reduction of Capital in respect of such share;
(b) second, any further such proceeds shall be paid as follows:(i) 50% in value of such further proceeds less the Net Profits Reserve shall be paid to the holders of the Ordinary A Shares in proportion to the number of Ordinary A Shares held by each of them; and(ii) 50% in value of such further proceeds which the Company resolves to distribute shall be paid to the holders of the Ordinary B Shares in proportion to the number of Ordinary B Shares held by each of them.
The percentages of such further proceeds payable to the holders of the Ordinary A and Ordinary B Shares will be adjusted on a pro rata basis as set out in clause 3.2 above in the event that Ordinary B Shares with a par value of less than an amount equal to the full final production cost of the film provisionally entitled ‘Ibiza Undead’ to be produced by the Company are issued as part of this fundraising and/or Ordinary B Shares are subsequently bought back and/or cancelled.
3.5 Shares Are Not RedeemableNeither the Ordinary A Shares nor the Ordinary B Shares will be redeemable or issued on terms that they may be redeemable.
3.6 Other ArticlesThe Articles also include (among other things) provision for
(a) The holders of the majority of the Ordinary A Shares may appoint at least 3 Directors of the Company. The Ordinary A Director(s) will always have a second or casting vote if there is an equality of votes among the Directors;
(b) Unless the holders of the majority of the Ordinary A Shares agree otherwise, Ordinary B shareholders will have pre-emption rights on further issues of Ordinary B Shares;
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(c) Save for permitted transfers to relations, family trusts and related companies, existing shareholders of the same class of shares have pre-emption rights on transfers of the Ordinary A Shares and Ordinary B Shares;
(d) A person entitled to an Ordinary B Share in consequence of the bankruptcy of a Shareholder will be deemed to have offered such share for sale to the other Ordinary Shareholders;
(e) There are “tag along” rights on a sale of more than 51% of the Ordinary B Shares under which the proposed buyer is obliged to make an offer to buy all of the Ordinary A Shares for an amount calculated as set out under Share Sale above;
(f) There are “drag along” rights for the Ordinary A Shareholder Majority to require the holders of the remaining Ordinary B Shares and/or the holders of the Ordinary A Shares to sell their shares to the proposed buyer if the Ordinary A Shareholder Majority or 51% of the Ordinary B Shareholders wish to sell their shares in the Company;
(g) Each Ordinary B Share in the Company will be subject to a lien for any unpaid debts owed by that Shareholder to the Company and will be subject to forfeiture if such unpaid debt is not paid when called.
4. Directors’ Interests in Ordinary A Shares
As at the date of this Document, the Directors’ interests in shares in the Company are as follows:9 Ordinary A Shares are held by Lyndon Gary Baldock (Company Director)1 Ordinary A Share is held by Andrew John Edwards (Company Director)
5. Litigation
The Company is not currently party to any litigation or regulatory proceedings nor is it aware of any such proceedings that are pending or threatened.
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Special Purpose Vehicle To provide complete transparency to Investors regarding budgetary spend and for facilitation of accountancy reports, a Special Purpose Vehicle (SPV) has been set up in the name of IU Film Ltd to produce the film entitled ‘Ibiza Undead’. All financial transactions for the project will be handled through this SPV. The Company was incorporated in the United Kingdom at Companies House on June 18th 2013 with registration number 8574629. Banking Services The bank account for IU Film Ltd is held with HSBC Bank.Account Name - IU Film LtdSort Code 400217, Account Number 41628216IBAN GB42MIDL40021741628216, BIC/SWIFT MIDLGB22 Accounting Services Financial accounting for the project will be carried out by Richard Juneman of Anderson & Pennington LLP, 44a Floral Street, London WC2E 9DA. Legal Services Legal services for the project will be provided by Simons Muirhead & Burton, 8-9 Frith Street, London W1D. Other Business Services Web site design will be handled by Shane Whitehead of Wereweb Software Ltd.Graphical and promotional materials will be designed by Tamara Rogers (www.tamararogers.co.uk) UK Production Office Correspondence Address IU Film Ltd10 Lea Court 143 Broad LaneLondon N15 4QHUnited Kingdom
BUSINESS SERVICES
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