- $20
million in deferred revenue expected in early 2020.
- Well-positioned
to realize $100 million in revenue by 2021.
- Company
is undervalued by a factor of 23, with a market cap of $5.2 million and a
share price around $0.13, as of Oct. 14, 2019.
- Creator
and co-founder Kirk Shaw has a film production profitability rate of 90%.
- Affiliated
with top Hollywood executives, producers and actors.
- 7
productions greenlit, $58 million total budgets.
- Risk-averse
production process results in predictable and consistent revenue streams.
- Soaring
content demand from streaming providers is fueling industry growth.
According to PwC, global media and entertainment market is expected to
grow from $1.9 trillion in 2017 to $2.4 trillion in 2022, a five-year CAGR
of 4.4%.
- Recent
formation of film and television sales and distribution joint venture, Wonderfilm
Global, is expected to generate significant incremental revenue.
- Strong
relationships throughout industry enable cost-effective production budgets
to come together.
- Management
team comprised of industry insiders with proven track records.
Wonderfilm
Media Corporation’s (TSX.V: WNDR) (OTCQB: WDRFF) main business is the
worldwide production of high-quality feature films and episodic television. The
Wonderfilm team includes Hollywood veterans who have packaged, produced and
delivered several profitable recent films, including “BlacKkKlansman,” “Get
Out” and “The Hurt Locker.” Having these individuals on the Wonderfilm team
demonstrates the company’s proven access to Academy Award-quality films and
upside.
Wonderfilm maintains a continuing $58 million annual
production slate to meet the constant and growing need for content worldwide.
The company’s risk-averse production process results in predictable and
consistent revenue streams.
Soaring demand for content from streaming providers is
fueling industry growth. The global media and entertainment market is expected
to grow from $1.9 trillion in 2017 to $2.4 trillion in 2022, a five-year CAGR
of 4.4%.
The company recently formed Wonderfilm Global, an
international film and television sales and distribution joint venture that is
expected to generate significant incremental revenue.
Wonderfilm has strong relationships throughout the
entertainment industry, which enables cost-effective production budgets and
in-demand content creation.
Management Team with Proven Track Records
Kirk Shaw: Over 240 movies and seven television
series to his credit. Headed up Canada’s largest independent film and
television production company, attaining $100 million revenue two years
straight with 8% EBITDA.
Dan Grodnik: Founded Mass Hysteria
Entertainment, a publicly traded company, and became its chairman/CEO. Produced
over 50 feature films, including “Bobby,” the 2006 Robert Kennedy biographic film.
Shaun Redick & Yvette Yates: $300 million+
USD total production budgets to date with a combined 175 award wins/355
nominations, including 10 Oscar nominations. In 2017 and 2018, they produced
two of the most successful Hollywood films of those years: “Get Out” ($255
million USD gross revenue) and “BlacKkKlansman” ($100 million USD gross
revenue). Scheduled to produce two to three films per year for Wonderfilm, with
the first release slated for October 2020. Committed to the 4% challenge to
give more women and women of color the opportunity to direct.
Jeff Bowler: 2017 Emmy Award-winning producer.
Vice president of acquisitions and production for The Exchange, one of the top
film sales and finance companies in the world. Bowler is the executive for Wonderfilm
Global distribution.
Bret Saxon: Through his company, TMP Inc., Saxon
created M&A deals worth over US$750 million across 113 countries. Produced
several feature films and made-for-television movies, including Wonderfilm’s
2019 movie “Zombie Tidal Wave” for NBC/Universal’s SYFY.
17-Title Movie Slate — Greenlit
Wonderfilm currently has 17 films greenlit with combined
budgets totaling $58 million. Wonderfilm production stars include: John
Travolta, Nicolas Cage, Guy Pearce, Ryan Phillippe and Anne Heche, to name a
few.
Some of the company’s most notable greenlit projects include
the horror film “Amityville 1974,” slated for theatrical release in October
2020, and the action film “Inside Game” starring Tyrese Gibson, which will be
released to theaters in fall 2020.
The company is also actively developing a number of other
new IP projects, including a dramatic biographic feature titled “Life and Times
of Steve McQueen,” a film adaptation of the bestselling novel “Merchant of
Death” and a television series headed by “CSI: Crime Scene Investigation”
creator Anthony Zuiker.
Potential for Breakout Success
Wonderfilm movies have the potential for millions of dollars
in revenue from the kind of breakout success generated by films like “Saw” and
“Get Out,” which would propel Wonderfilm and its revenue streams to a new
level. Wonderfilm has several potential breakout films in its
development/production queue.
Note: Potential breakout films are not factored into
company’s revenue projections.
Base Hits and Home Runs
In tandem with its slate of high-profile films, Wonderfilm
continues to finance, produce and deliver many profitable low-risk,
lower-budget films that are base hits. Shaun Redick is a home run hitter, and
his upcoming Wonderfilm projects are anticipated to be home run hits for the
company, while base hits such as “Zombie Tidal Wave” provide a consistent
source of revenue.
Recent Industry Breakout Films Include:
- SAW –
$1.2 million budget = $103.9 million in sales
- Pulp
Fiction – $8 million budget = $212 million in sales
- My Big
Fat Greek Wedding – $5 million budget = $250 million in sales
- Lost
in Translation – $4 million budget = $120 million in sales
- Get
Out – $4.5 million budget = $255.5 million sales (Shaun Redick)
Note: Revenue from most of Wonderfilm’s current slate will
be recorded on the books in 2020 or 2021.
Recent Wonderfilm Releases
- 17,
2019: Co-produced with NBC/Universal, “Zombie Tidal Wave” premièred on the
SYFY channel to strong ratings.
- 29,
2019: “The Fanatic” starring John Travolta opens in U.S. theaters.
- 5,
2019: “Tammy’s Always Dying” premiers at Toronto Film Festival.
- 8,
2019: “Primal” starring Nicolas Cage opens in U.S. theaters.
Wonderfilm Global Distribution
At the 2019 Cannes Film Festival, Wonderfilm officially
launched Wonderfilm Global, a new film, television and media foreign
sales/distribution joint venture with 101 Films and Paul McGowan.
Wonderfilm acquired 51% ownership in the joint venture
structure and immediately began attaching its own productions to Wonderfilm
Global. The joint venture represents a significant opportunity for Wonderfilm,
changing how the company does business.
The intention behind Wonderfilm Global is to keep
distribution margins in-house that previously went to other companies. Since
most Wonderfilm movies are relatively low-risk and easy to sell because they
feature desirable cast and genre, third-party distribution companies were
previously earning approximately 10%, plus expenses, on Wonderfilm movies
without any level of risk. Now, revenue is generated through presales of
Wonderfilm projects and, at times, third-party films. The average Wonderfilm
movie is pre-sold for $5million, garnering $500,000 to $750,000 per sale as a
commission. These commissions now stay in-house with Wonderfilm Global, and the
company expects to sell 10 to 12 third-party films between fall 2019 and fall
2020, generating roughly $6 million in commission income.
A further revenue source is generated from theatrical sales
through a 50/50 upside split once the minimum sales threshold is met.
Wonderfilm Global has offices in Vancouver, Beverly Hills,
London, Ireland, Seoul and China.
Wonderfilm Business Model
Wonderfilm productions are structured to begin generating a
return to the company as soon as the camera starts rolling.
Return Before a Film is Delivered: Producer fee
line items are included in each production budget. These range from $50,000 to
$500,000, depending on the total budget, and are paid to Wonderfilm most
commonly on the first day of principle photography.
Distribution: Wonderfilm Global charges sales
and distribution fees within each production budget to cover its presale costs.
Note: Wonderfilm’s productions are all structured to
minimize risk by matching budget to funds available.
Return After a Film is Delivered: Unsold presale
territories are countries or territories left off of a film’s presale list,
either for strategic reasons or because the broadcaster/distributor is waiting
to see the completed film. These outside-the-budget distribution sales become
Wonderfilm profit centers.
Sales overages once contracted presale threshold is
surpassed.
The company’s film library grows with each new production,
adding to future sales revenue. Depending on the agreement, exploitation rights
for future worldwide sales return to Wonderfilm four or seven years after
delivery. As of October 2019, Wonderfilm’s growing film library comprises 18
titles for future exploitation.
Note: The nature of the film business is that box office
revenue lags production up to a couple of years.
$50 Million Wonderfilm Production Fund (WPF):
Wonderfilm is in the process of raising $50 million to
establish a Wonderfilm Production Fund (WPF). WPF is designed to consolidate
traditional production financing models into a single diversified, asset-backed
debt instrument.
The WPF is a highly specialized investment vehicle with
noncorrelated market returns normally reserved for institutional banks and
specialty lenders, and it would pay 8% interest directly from each Wonderfilm
movie or series budget and not from corporate funds. These same interest payments
are already added to each production budget, as the company currently closes a
separate financing for every film. The WPF would significantly streamline
Wonderfilm’s production rate, adding revenue more quickly and broadening the
yearly production slate.
For fund investors, the WPF is a dedicated
production-financing vehicle designed to offer a risk-moderated approach to
investing in film finance. The managed process provides structure and
reassurance that are normally experienced only when working with an
institutional lender that has a dedicated staff and resources.
All projects being financed are for Wonderfilm productions,
with the fund collateral fully secured by receivables, including presale
contracts, government incentives, or a guarantee from Wonderfilm for any
unsecured amounts as may be permitted.
For more information, visit the company’s website at www.Wonderfilm.com
NOTE TO INVESTORS: The latest news and updates
relating to WDRFF are available in the company’s newsroom at http://ibn.fm/WDRFF
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