CineLaunch

Yes! - Two of them. The first one went over by about 4 weeks, full penalty paid. Very straightforward communication the whole time - just slower unlock of escrow than anticipated. So hey, our ROI was even better. The second one is late right now - But again, communication has been constant. We're 6 weeks over and we just confirmed equity escrow unlock yesterday from production legal team, so we're finally closing out next week. Frankly, although stressful for the first few days - once we confirmed that everything was A-okay, and moving forward according to plan (again, just slower than anticipated) - it turned into great news, because it turned a 15% return into a 50% return, which is quite crazy.

No, never. We always make it very clear that this is the scenario if everything else fails, but it's the worst-case scenario for production - and we are very thorough with due- diligence, so all things have been smooth-sailing as far as ever having to step in goes. We're always ready, but the scenario will be rare if ever required.

Of course. We require some level of an LOI to show that there is/will be a credible bond company behind a deal we're considering. The bond / completion guarantee (same thing, different name) is responsible for making sure the film is completed on time, on budget, etc. Depending on the structure, sometimes they cover pre-production as well. But once production begins, yes, they are responsible for ensuring production is completed and if worst came to worst, it would be on them to make the investors and debt-issuers whole. — As for company listing, we put the lien over the entire production until we're paid back, and that entity is the one named on the bond agreement typically, so usually that is sufficient for our legal team.

All the other paperwork (bridge agreement, copyright mortgage, chain of title, promissory note, power of attorney, consent of manager, etc, etc.) is handled beforehand. That process is thorough and oftentimes lengthy, so we have most of that in place before we bring investors in. Once we're ready to start bringing checks in, the flow is simple - We structure a subscription agreement with our investment partners on a given deal, they wire funds to Launch Development Fund LLC (the entity built exclusively for these deals) - Once all checks arrive and all documentation is locked in from production, we issue one payment (the bridge) to production to start the clock on the loan. On the other side, principle + premium is paid back to Launch, and paid out immediately to investors (unless we have another optional deal to offer, for investors to roll over into).

Yes, absolutely. We typically file a UCC-1 on both the production entity (SPV) and the production company as a co-signer / additional insurance for us. All public searchable records as well.

We have a 10 page total agreement packet with production before moving forward on any actual financing. The main bridge agreement + UCC-1 ensures our priority, but here's a bit more specificity.

The bridge loan agreement includes several key provisions that establish the lender as having top priority for repayment:

1. Security Interest: The agreement creates a first priority security interest in favor of the lender on ALL collateral related to the film, including rights, assets, and proceeds. This is explicitly stated in the bridge and the Security Agreement.
2. UCC Filing: The agreement requires the borrower to authorize the lender to file UCC financing statements immediately upon execution of the agreement. This public filing establishes the lender's priority claim on the collateral.
3. Holdback Agreement: Section 3(e) in our agreement requires other parties entitled to payments from the film's budget to defer their payments until the lender is repaid in full.
4. Repayment Terms: The loan is structured for repayment upon the film's financial close or within however many weeks (determined per deal), whichever comes first, ensuring the lender is paid before all other parties.
5. Default Rights: In case of default, the lender has extensive rights, including the ability to take over the film production entirely.

Yes, it's fair to say that this bridge loan is providing financing while the majority of the financing is still in the "underwriting" stage. This is a common practice in film financing.

If the main financing falls through:

• The investors are protected by the security interest in all the film's assets and rights, as outlined in the Security Agreement (Exhibit F)
• The loan is due within 17 weeks regardless of the film's financing status (Section 9).
• The co-signed production company is at fault if the film entity itself can't cover.
• The agreement gives the lender the right to take over the film if not repaid.
• Depending on the structure of the bond in place / relationship with the bond company, they come on to get things back on track OR, if that's not possible, pay out the debt issuers (us) in order to shut everything down smoothly without legal interference.

As mentioned, a bond company is involved in the oversight in order to ensure production keeps with the screenplay, budget and production schedule smoothly without over-spending. This is part of the main reason we require a bond LOI - They ensure capital is managed properly in order to deliver a given project as planned.
On our side, as Launch, we'll send confirmation of wire transfers, payments to production and any other updates we have as they come along. And according to Section 6 in our agreement with production, Borrower is required to advise the Lender (us) regularly on the progress of production and any other development as they happen.