Yale Creditors Meeting in January 2025

This transcript was supplied anonymously and produced with the aid of automated speech-to-text technology. It is offered only to convey the general substance of the discussion and may include errors, omissions, or paraphrasing. No representation or warranty is made as to its completeness or accuracy; readers should verify all critical details independently.
Yale Entertainment is navigating a critical financial restructuring effort as it faces over $47 million in principal debt tied to 50+ film projects. This debt, primarily composed of gap loans secured against future film sales rather than hard collateral, has strained cash flow and limited operational flexibility. Compounding the challenge, the company has relied on high-interest debt facilities—including merchant cash advances with rates approaching 50% APR—and corporate guarantees, creating unsustainable repayment conditions.

In response, leadership is working on a multi-pronged strategy to stabilize finances, protect investor interests, and reposition the business for growth. Key proposals include:

Pausing default interest accruals and negotiating forgiveness of past default interest to make repayment more feasible. Offering debt-for-equity swaps and exploring discounted debt buyouts to reduce liabilities. Encouraging creditors to contribute additional equity, with discussions around forming a new $50 million entity backed by existing stakeholders and new investors. Leveraging film library rights, IP sales, and licensing deals as vehicles to repay debt and raise new capital. At the core of the strategic shift is a renewed focus on producing commercially viable, high-budget films featuring A-list actors (e.g., Liam Hemsworth, Jon Hamm, Gerard Butler). These projects aim to generate stronger producer fees (targeting ~20% on budgets of $10M+) and meaningful back-end participation. The company plans to reduce overhead by moving away from the in-house Great Escape sales arm and partnering with specialized third-party sales agents.

Additionally, Yale is exploring new revenue streams and business entities:

Launching labels focused on faith-based films, sports-driven content, and horror/slasher projects (including collaborations with 50 Cent). Adapting existing IP into TV shows, stage musicals, plays, documentaries, and short-form content. Developing a slate that includes upcoming and recent films starring Alicia Silverstone, Maria Bakalova, 50 Cent, and others. Throughout this process, maintaining industry reputation, distributor confidence, and talent relationships is a top priority. Creditor alignment is essential, as leadership emphasizes fair treatment while balancing urgency with pragmatism. The company is also considering institutional capital, government-backed low-interest loans, and partnerships with management firms to bring in discipline, oversight, and fiscal control.

The collective goal is to clean up the balance sheet, restart meaningful production activity, repay debt through smart monetization of assets, and position Yale Entertainment as a sustainable, growth-oriented enterprise in the evolving entertainment landscape.

Transcript 1:

Jordan Beckerman:
we’ll get started. All right, so first of all, thank you to everybody for attending this meeting. We know everybody’s, you know, busy and has their lives and jobs and kids and everything else, but it truly does mean a lot to us that everybody’s willing to take the time to to join us today, and, you know, try to try to come up with some some ideas. I think that, you know, one of the things that we’ve realized over the last, you know, week and a half is that we have a lot of extremely capable and smart, successful people that, you know, we’ve interacted with over the years. And really what we want to do is bring everybody together and, you know, try to try to figure out our current situation and how we how we move forward. So that’s really the purpose of today’s meeting, is bringing everyone together and having a dialog and coming up with some some plans.

Jordan Levine:
Yep, no. Appreciate everybody coming out. Know, some people traveled to planes as well. So very appreciative of that. Typically, we meet under more exciting circumstances, such as a movie premiere, but I think that this can also be productive, and we could have a good outcome. And over the past year, we’ve had many conversations with various people about the company’s health, and I think we were very close on several occasions to closing a big deal, which could still technically happen. But in the meantime, we wanted to be proactive and come up with another solution, and in doing so, we had a very nice conversation with our good friend clay Corin, who is also an investor in the company, has a background in finance and restructuring companies, and that’s really the purpose for today’s meeting. We want to pass over to clay. We think we have a good idea solution on how to resolve all this and start

Clay Pecorin:
maybe I should turn so let me start by saying is that I am a big fan of these guys. They’re my friends first, but I am also a fairly large creditor in this to the tune of two and shame, 2 million change i. A quick background is I was in finance for about 15 years, turning around magazine companies. Got into the space, the film space, wanting to sort of be on the creative side. Realized that I sucked at that, and got into the finance side. And I currently run three funds, two institutionally backed, where I’m the sponsor in them, and one, which is just balance sheet capital of my partner and I, or I’m 50/50, partner, so we have a fair amount of money in the marketplace. I got the sense from these guys probably a month ago, that things were upside down in a very big way, and something sort of needed to change. I think that, first and foremost, I think it’s important to recognize that these guys did not get rich on what has happened, and were not trying to do anything but save their company, and they got over their skis. So the bad news is, I believe everybody in this room has a form of corporate guarantee, one way or the other, whether it be a film backed by a corporate guarantee, or a corporate guarantee by itself on its own, they are in a situation where the amount of money that they owe is impossible to recoup and pay people out without a significant restructuring of the business, and that means setting up, ultimately, a new business. So there are, there are three issues with their business right now. One, the debt and the interest is eating them alive. All of us have default interest on our loans. I’m assuming that are fairly sizable. That interest is not going to exist for people. It does not exist. So the goal here, in the short term or in the midterm, and when I say midterm, I mean three to five years, is to get back as much principle to folks as possible. And ultimately, I think you can do that in a number of ways. And again, this is an open dialog. I am not a brain surgeon, nor do I expect anybody to believe that I’m trying to help them out and also recoup my investment. So the the the very bad outcome is folks in this room do not agree with moving forward, or just are absolutely pissed off and want to sue. They’re sort of judgment proof guys, in terms of, there is not enough assets to for anybody to go and Sue. And if they file for bankruptcy, the bankruptcy court will take over this business. And the only everybody in this room is sitting behind an SBA loan. And those of you that don’t know what an SBA loan, SBA loan is, it’s government backed, and they will take the first proceeds, and the bankruptcy attorneys will, I guarantee you, do everything they can just to get the government paid back. So if the first thought is we should sue these guys, I would suggest that that is a very, very dangerous outcome for everybody. And I think you get nothing. So that’s the first thing. The second thing is, they have, they’ve been a pro in a product of some things going the wrong way. One is the is the strike, which was certainly something they can control. Two was the foreign markets basically have imploded. So where they’ve laid off most of their risk in the past had that business has gone away. So it hasn’t been completely gone away, but the Gone are the days where John Travolta in a movie for two days can now be pre sold or sold after the fact for a couple million bucks for people to get out. And then, you know, the third thing is, they had some overages on films that sort of made these, these films, more expensive than they should have. Now that’s on them. They’re responsible for the people that they hire, and they’re responsible for the people that went over. And I they’re not running away from that, but that has happened. So ultimately, there’s, there’s a very, very big balance on this, on the corporate guarantee side. Ultimately, I think there, the way that you do this is you set up a separate business, whereas it acts as a debt driven business. So that business is to focus on.
Owning the IP. Number one very little overhead so they can manage the business. And number three, the most important part is setting up and having a white label distribution company. The distribution business is what’s been killing them. So I can give an example, if you don’t mind, on the on. So there’s a David to Coveney movie, which I’m also in, called, What the hell’s name?
Bucky dad? Yeah, Bucky, reverse the curse. It was renamed. Yeah, what’s that? Reverse the curse is the current name.
Okay? So that if you were to look at a statement on that film, you will see that 50% 55% of that is going out the door and distribution fees and in marketing phase. Ultimately, I’ve had a couple of conversations, more than a couple, with folks in the distribution space, and I believe you can white label a distribution deal for very, very little money. Call it 35 to 40,000 a month. That allows for these guys to start monetizing the films that they can’t get deals on that are, by the way, the deals that they’re they’re the revenue shares that they’re doing now are horrific, because there’s no other place to go. So I have called favors. I’ve asked for folks to to white label current distribution. For those of you that don’t understand the distribution business, I can talk at 30,000 feet, and in full disclosure, I’m an investor in two distribution companies. So this the idea and the value of distribution is one fold, which is, it’s not in the traditional theatrical sense, it’s in the ancillary markets. So you’re only as good as the ancillary deals you have meaning, who’s your SVOD streaming deal, who’s your home video deal, who’s your P VOD deal, which is the so if the movies in the movie theater, you could buy something for 1999 while it’s still in the movie theater and and that’s on your TV screen. Distribution is 100% about what your ancillary deals are. So most people can’t go out and get those ancillary deals. We have folks from a company called relativity that’s been around for a very, very long time, that has best in class ancillaries. And it is with prime. It is with Amazon. It has a universal piece. It has it has a airline piece and don’t discount airline. Airline is a very big revenue generator for folks, and they are willing to allow us to white label it, whereas they will take whatever their costs are and distribution fee, which will be more like 15% as opposed to 50% so that’s one way of getting out of it. It also allows these guys on the development side to be able to make producing fees. These guys have made a very fair amount of producing fees, and part of that is that they had a bloated overhead. I mean, not them personally, but they’re paying a lot of people trying to build a business that needs to stop. But if they were able to be in business, there is a the way I would set this up is the business is is a standalone it’s a distribution company, it’s a development company, it’s a it’s a production company. They act as employees, because we want nothing to do with the debt that is being that exists. And ultimately, you know, any producing fees they make, and by the way, they’ve made producing fees in the millions, that money goes down to pay the corporate guarantees. The people who are sitting against films currently are going to continue to reap the benefits of the revenues of those films. The people that have exposure, exposure, just on a corporate guarantee, would receive Perry pursue money back on the producing fees, which can be sizable. There’s also a library that is fairly sizable we are currently having. They have two folks that are doing a analysis of the value of that library, and I have a banker that is doing an analysis on the library. This is pretty detailed thing that is that takes some time, and it will probably take two months, but ultimately, I think, and there’s going to be value there that everybody’s going to be able to participate in. But right now, the numbers are are very big, and we have to start paying those down. And the only way I think you can do that is by funding another business that is truly only a debt business, where people have are massively protected on that debt business, and any equity returns go to pay down this business. Now what that requires is additional investment in this new business. And if you’re losing your ass in this current business, there are a lot of people who would argue, why am I going to throw good money after bad you? And I would argue that this is a different money after good and hopefully it pays down our principle. I, who I am, is I have no problem walking away from a loss. I have done it my entire career, and I believe that there’s a way to reap some benefits in this new business, a, get a preference, preferred return in a way that’s protected, and B, buy down my current outstanding balance. And that’s ultimately what I think should be done. You know, it for those of us that are in real estate, you know, this is my version of a capital call. This is, hey, we need something’s happened, and it’s a problem. Generally, capital calls not based on the failing, the failure of the business at its point. But this is a separate business. So that’s my 30,000 foot view. I am, again, a creditor. I am trying to find a way for me to get my money back. I’m not looking to front, to step in front of anybody. I don’t do that. I hope that everybody will be participants in this. I will understand for those that don’t. But I also understand that, short of making significant changes to do something in the very short term, this business blows up and we lose everything. That’s my 30,000 feet.
So I’m sure there are questions, thoughts, and I think this should be an open forum. It’s what I said to the guys, everybody has to be sort of in the room or on Zoom to understand the problems that exist and either come up with ideas, say you’re pissed, because, by the way, I’ve had this information for a couple weeks, my pissed is over now it’s trying to solve it.
So I think the way you you look at that is there’s an investment in the distribution business. So let’s use $5 million and I haven’t thought about the number, because it really depends on who wants to play, but let’s say it’s $5 million I think there’s going to be a revolver. Call it 500,000 to a million dollars, which hopefully you you continue to recycle. You never call on the five, but you’re going to have to be able to have that five, in case we have a number of movies. So I think that $5 million whatever’s called benefits with a their money back plus benefits from their investment, plus 20% return, and everything above that on a return basis, goes back into Yale entertainment on a Peri pursuit basis. So I think the structure, and again, I’m open to that, and I think it’s really up to the folks in this room. I think the structure in the business, you need to have someone who’s who understands and is running that business as the head of it. You need to have a distribution person that understands it, and then you’re going to use basically the black box of relativity to distribute and collect and and I think that it’s got to be made up of a group of board members who probably don’t want the hassle of it, but you’re going to have to have checks and balances that haven’t existed.

Matt Newman:
What happens to the folks? This is Matt Newman the phone. What happens if folks don’t reinvest but are certainly given corporate guarantees. What happens to those folks?

Clay Pecorin:
Well, I think if, if there’s no one that wants to invest in a distribution business, you know, we wait for monies to come in on the film basis, and if the films over perform, then any over performance on those debt deals go to pay down the corporate guarantees. Those people that choose not to invest but are benefiting from the distribution business, of those who are investing will sit in the same place that everybody else is sitting in, which is recouping at the same time everybody else is on the Yale entertainment side.

Speaker 6 (woman voice):
Well, the the debt, if I understand you correctly, is just going to be, you call it a debt business, but basically, people lend into the business and get a preferred return of x. But really it’s just a crutch to that’s exactly the distribution out. So it’s not about excluding people that are it’s not excluding it is, it’s just a way to try to monitor, to get going, to monetize it, right?

Clay Pecorin: Yeah, that’s accurate.

Unnamed speaker: How do you migrate the IP from the existing Yale entertainment?

Clay Pecorin:
So I’m not an attorney, but I think that you’re going to have to bifurcate it. I think, I think the separate LLC so all these films are in separate LLCs. Yeah, right. So what you’re going to have to do is you’re going to have to remove Yale entertainment from those LLCs.

Unnamed speaker: Does that allow you to renegotiate the distribution? Does that because those are agreements still in place, correct?

Clay Pecorin:
In certain cases, you’re not going to be able to to renew, you’re not going to be able to take a movie out of quiver. You’re not gonna be able to take a movie out of vertical, right? But in certain cases, there is a significant amount of unsold foreign basis that needs to, sort of needs to be changed, right? Like we need to, we need to figure out how we’re going to monetize the unsold form, because there’s a value there too, and that’s one of the other reasons that this balance has gotten so big, is that they haven’t been able to, they haven’t been able to sell some of the foreign and I think that’s a product of market. I think that’s a product of incentive. I think there are also ways to reap some of that.

Unnamed speaker: Is there not an opportunity for whatever entities to acquire those assets? Why do we need to create a new code?

Clay Pecorin:
You could, you could do that, but you still need to. I mean, you could. I mean, I’m sure you could do that. That’s not, I mean, it’s a very good idea. That’s a legal question for Meg, but I don’t know the answer to that, you know?

Unnamed speaker: So you can tell I’m biased. I’m looking for a one time payout, yes, but that’s

Clay Pecorin:
that’s why, yeah, I don’t know.
The the issue is, I don’t know who’s buying it. Okay, there’s not value there, except for the catalog, which being which is tough to

Clay Pecorin:
yes, the best case scenario. Give me the best case scenario. It’s in the fraction budgetarily.
It’s maybe four or $5 million something like that. Okay, give or take, it could be more. There’s some there’s some things like Becky that has IP value. There’s some things like, what’s the Chick Fil that one chip fight would have value? And listen, they also have a pipeline of films that are not these small chicken shit films that I think have gotten them in problems, but films where real producing fees can exist and they should. They should. After all, we can go through all the questions they should speak to the positives where they do have opportunity to bring money in, because I think that’s going to be valuable as

Jordan Levine:
well, not to cut in. I think that’s a good point. So a lot of movies that we’ve been producing have been these under $5 million films that are festival hits, so to speak, movies like shotgun after everything, parachute, the David Coveney movie. These are movies that are not selling as well in the marketplace anymore, but also the producer fees to Clay’s point are very minimal. When you compare those fees, call it, you know, couple 100k on a movie like parachute, which is Brittany Snow’s film. And there were amazing names in there, like Dave Bautista, Gina Rodriguez, compared to movie like a bandit that we’ve produced, or a stowaway that we were executive producers on, movies like that that are more genre focused, bigger budgeted. It’s it’s better opportunity for us to take larger fees. So what we want to focus on is movies that will sell in the marketplace, because the marketplace right now really looking for commercial genre kind of movies, action thriller movies, ours, to a certain extent, and budgets that make the films look like, not essentially a studio film, but as close to that as possible. And that’s where we had issues in the past, not only paying back loans because the producer fees were just too small, but then the film’s not performing. So I think that we can go through our deck when we’re all done speaking of what we have coming up, and I would say they’re mostly in the eight to $10 billion so range per film,

Jordan Beckerman:
yeah, and that’s really just driven by, you know, what the market has shown us. And, you know, I think the business as it was, was, you know, pretty much status quo for a long time, and it’s been a relatively recent, you know, shift. And just given the volume of films that we did in 2022 and early 2023 it’s, it’s created, you know, this, this kind of significant, you know, situation. So we have done this before. We’ve done films where we can generate, you know, seven figure producer fees, and that’s really going to be the key to paying all of this down is doing exclusively those types of movies. The reality is, Yale is not going to be winning Academy Awards in the next few years like we need to be making movies that are commercial, that are done for the right price, that don’t have overages. So it’s it’s a small shift in sort of what we’re what we’re doing, but it’s something that we. Do know how to do but we need the time to do it. And really, what we’ve been spending so much of our time on this last year is survival. And we’ve just been trying to, you know, have enough cash coming in to pay employees and, you know, pay off little things here and there. And we’re just getting the point where that’s not sort of feasible. And so what we need to do is kind of have everybody come together and say, we’re going to do this together, and this is the way that that we’re going to get it done. You know, this is not our area of expertise, and I think that’s why it’s so valuable and so so much appreciated that clay is taking the time to do this, because he has done this before. And I think there’s probably other people in the room that have dealt with that have dealt with the exact situation, but, you know, similar things. And so, you know, really it’s, it’s going to have to be a collective effort for us to get on top of this and start generating fees and generating, you know, cash coming into Yale to start paying down

Jordan Levine:
so these balances, there are some questions. We didn’t notice that till now, but I will say before even getting into that, the idea is that if we could produce five or six movies or so a year, maybe the fees are 2 million per film within two three years, we should get on top of this. But also what we want to do simultaneously. Metropolitan was a group that we thought would close before the end of 2024 we want to, and we are resuming conversations with them. And the idea, and the hope is that, in conjunction with this new plan, Metropolitan or other people, investors, groups that we’re talking to will also come on board and help us expedite the process in not only having funds for these movies, but then also returning the previous debt to everybody involved

Unnamed speaker (woman voice):
And then Brooks just wants us to confirm the name of whoever speaking. So I guess if anyone else speaks, just announce who you are first, so everyone knows. So everyone knows

Clay Pecorin:
there’s another thing I should go ahead. Sorry, you go first. So the other thing I should mention is that the conversations they’ve had with folks like metropolitan and others, you know, have slowed down tremendously because of the debt, right? Like no one wants to take on this debt. And so I think that’s the other way. And the benefit of setting up the separate entity so as there’s a reason for places like metropolitan to put capital in, because they’re not being they’re not being weighed down by the massive amounts of debt. And I understand as a as a thing, you don’t want, you want to bifurcate this. You want to get away from this. And so I think this also allows them to do a fairly sizable equity raised because they’ve proven that they can put movies together. So I throw that out there because I forgot it.

Randy Kleiman:
So obviously everybody invested different amounts at different times. How do you determine who gets paid back when?

Clay Pecorin:
I think the only way that this works is all the money gets put into you

Jordan Beckerman:
yeah, so that was Randy Kleiman speaking. But the question was, since everybody put in different amounts at different times with different terms, how do you manage that essentially, and clay, I’ll let you talk. I should mention Randy is an investor in a specific film with a corporate guarantee. So I think it’s a little bit different for that kind of situation, because the film will generate, you know, money. It’s actually David COVID film. So, you know, as that generates money that goes to the people that invested into that specific film. And so I think it’s the question of the corporate guarantee, but I’ll

Clay Pecorin:
let you so on a specific film basis, if you have an investment in that film, you will continue to get that the benefits of the monies that come in on that film, right? That will stay forever you in terms of the backstop of the corporate guarantee, or those that have corporate guarantees in this room, without the backstop of a film, all that shit has to be thrown into a pot, and people are paid Perry pursue as it comes in. It’s the only way it works.

Transcript 2:

David Gilbert:
Can I ask a question? Don’t know if everyone can hear me. It’s David Gilbert here. We’re one of the creditors from BK studios. I’m sort of, I’m trying to wrap my head around all of this, because I didn’t know that there was going to be, I’ve sort of logged on to this zoom call from London, and I can’t even count the amount of people that are on here, which is really surprising to me. What are we talking about here? Like, what are you talking about the debt and the various corporate guarantees and stuff. How big is this? How many corporate guarantees have been given out over a period of time? What? What is the scale of the problem that we’re talking about? Like, it’d be good to actually hear some numbers.

Clay Pecorin:
Scale is significant. So it is it, depending on if you count one particular investor that has 10 in it, which I think is separate because it’s on two movies, it’s about $50,000,000

David Gilbert:
5-0?

Clay Pecorin:
5-0 pretty much everybody, I think, has some form of corporate guarantee.

Megan:
Can you? Can you? Can you actually tell it? So that’s the corporate guarantee piece. But then there’s some people who have individual loans. So what is the actual considered debt versus separate from the guarantees, is 50 million, which sounds like it’s

Clay Pecorin:
I added it so I batted them together, the blind corporate guarantees, where there’s no film backing, it is about 20. Is that right? Yeah.

Megan:
Could you share that with us, like somehow, like a balance sheet or some this is the information I think would be really helpful for us, understanding sort of the scale. Understanding sort of the scale of what it is, because the SBA being involved here too, it makes me wonder whether you’re going to be able to transfer any IP to a new entity in the first place, because they’re going to that transferring assets with an SBA loan might be a bit tricky. So I just if you go, could you go through, like, here’s the ranking of what we have for liabilities.

Jordan Levine:
Yes, okay, yeah, we’re going to pull up a sheet right now.
(Showing presentation sheet with Yale Debt Schedule- 1.13.25)

David Gilbert:
I mean, I mean, just to clarify, you know, it’s a totally normal thing to raise debt against individual films, whether that’s of loans against secured things or gap deals that obviously come with an element of risk, but it’s, you know, that’s a limited recourse loan against a specific project. You know, we were in, like, I can say we were in a specific film that then was converted to a corporate loan when it didn’t work. So I’m just, I just want to clarify, are we talking about $50 million worth of corporate guarantees?

Jordan Beckerman:
Yes, yeah. So there, there’s about half of that is investments that were made into films. And really it was in 2022 and 2023 we did, I don’t know, eight, eight films or so that had corporate backstops connected to those films, and we made them for various budgets, anywhere from, you know, half a million dollars up to, you know, around $4 million but we did it, you know, seven or eight times. And once those films were done, the market for those films essentially collapsed, and so it left us with, I mean, think about those budgets. And, you know, some of them have, you know, paid out under $100,000 back to the investors. And so it’s created a real log jam in terms of, you know, how much corporate debt there is on the books, and it’s way more than we expected when we did those films. And so, and then, obviously, with the strikes, you know, there were some additional corporate debt that was taken on directly with the company to allow us to survive with, you know, certain things that we expected happening, which, again, we can get more into. But, you know, we had planned on certain takeouts and things to come through that unfortunately, hasn’t happened yet. And so we have this, you know, pretty massive, you know, Pile. We do think that there is some value in these films that will pay down some of this, you know, existing number. But I think that, you know, we have to be realistic about, you know, how quickly that’s going to happen and and we’re trying to just set up a mechanism and a resolution that. Allows us to reasonably be able to pay this down as quickly as we possibly can.

Matt Newman:
So this is Matt on the phone again, so appreciate the transparency, guys. I thank you for that. I think this is, you know, I don’t think anyone agrees that the the results of where we are right now is something we’re happy with, at least, you know, we’re getting clarity on where we are, and there’s a path getting created forward here. So my question is about the ex, because it’s about execution, right? So it’s about, is there, are there are there materials or things that you could start sharing with the group on, okay, if we’re going to get to here right or at a goal, we need to produce this many films. If we hit here’s the pipeline we’re planning on producing. The outcome of that we’ll be able to pay down, like having sort of a clear pathway that we can see that as you exit, you know, almost a business plan, but it’s, it’s really almost a, it’s an execution plan on how you can actually get there. And then the second question is, aside from seeing that, you know, what are the covenants that you would have in this new entity that would ensure sort of protection of the original creditors, so that, you know, hey, they know that, you know, as money comes in, the plan gets executed, a certain percentage goes back to to Yale, that then gets contributed to go back, so we kind of can see how the cash flow moves. So two separate questions.

Yeah, I mean to your first question, I think that once we’re done speaking, we can show a deck of the upcoming movies that we have and predicted budgets and fees, so we can go through that. These are films that have been in development in various stages now for some time.

Jordan Levine:
So happy to show that.

Megan:
Could you actually go through it looks on the spreadsheet that you also have, in addition to the corporate debt. And this the Gantt, which is the guarantees and things that got rolled into secured and unsecured loans you have, like, owed to vendors and some other MCA loans. Are those also in addition? Are they counted in this whole 50 million?

Jordan Levine:
No, it’s in addition. I mean, Ode to vendors. We could show you. These are payments like, for some specific movies. So as an example, I can’t see, but it’s like around, maybe like 96k owed on one specific film and withholdings to New Jersey. There’s nothing that’s tremendous on this list whatsoever. They’re just think obligations that we have to take care of, MCA loans. And I’m sure how many people are familiar with those? If you’re not, it’s probably a good thing.
They are highly aggressive.They’re called merchant cash advances. I mean, they’re not even really called loans, because they are such aggressive deals. And this past summer, after one of the two big deals that we thought was happening did not materialize while we were waiting on metropolitan to close by the end of the year, that was the information that we were initially given. We had no choice but to kind of enter this world of MCA and there, there are loans that are basically withdrawn from your account, either once a week or once a day, and they’re very high interest, and they’re, I mean, basically loan shark kind of loans, and we did this in order to survive and the sustainability of taking out that kind of money, and you know, that kind of repayment just became next to impossible. Hence why, you know, we really started to have conversations about, what can we do now, while we wait on metropolitan or similar to happen? And again, we do believe that one of these bigger scenarios will pan out, but we want to be proactive in the meantime, as as we are trying to be now, and just filling everybody in and coming up with some kind of proactive game plan.

Megan:
Can you talk a little bit about what the current like cash flow is for the company like, you know, as far as this tells us, sort of what the balance sheet looks like, right? Based on these loans and liabilities, what is the like? What are the current like? What’s your run rate for like, cash flow in from stuff that’s like, I mean, is it effectively insolvent right now? Is that what we’re talking about, aside from the loans? But are you have a regular cash flow coming in? Sorry,

Jordan Levine:
no, no. I mean, at this point, we survived for maybe six months or so after one of these big deals did not pan out, and then also some money that we were expecting from this one person in particular did not come through. But with that being said, No, I mean, we have laid off essentially 90% of the Company, and we’re operating on next to nothing. Now we have a movie that we are producing in New Mexico starting next week. Granted, we do have partners on the film, and because the budget has increased, it basically obliterated our feet. And that’s one of the new things that we are focusing on, which is what we’ve done in the past, which is not really taking on producing partners that will affect the fees that we earn.

Sparsh Mehta:
Could you? Eh, This is Sparsh here. I don’t know if you can hear me, what exactly transpired with Metropolitan and like conversation and why they didn’t extend this bridge?

Jordan Levine:
I don’t hear. What happened with Metropolitan?

Sparsh Mehta: Yeah

Jordan Beckerman:
yeah. So we had been speaking to them for several months. We gave them sort of all of our information, the sort of parameters of that deal were essentially so their growth capital firm. And so the idea was a $30 million total deal, half of which would be going towards paying down debt, and then half would be used, essentially to develop new films. So investments in IP bridge loans to secure actors, things like that. And so initially, during the conversation, the messaging from them was that not only do they want to close it by the end of the year, but per their mandate, they have to close it by the end of the year. So we spent a lot of time going back and forth with them. And as we got into December, and there, I guess general manager Paul got more involved. You know, he comes from more different world, and he’s familiar with music royalties and music licensing, but film is a little bit different. And because we got into the holidays, we kind of got into a situation where it wasn’t as straightforward as I’m buying a music royalty library. And so they they basically said, like, we’re not gonna be able to get this done before the end of the year, but we’d like to pick up the conversation in January. So that’s where it was left. You know, I think that they had a similar sort of question about, what is the value of ELS, assets and library that I think needs to be fleshed out a little bit more, but that conversation is ongoing, but it’s not there yet.

Randy:
Excuse me. Off of that, what are some of the other, these other bigger scenarios you were talking about that are still viable, or perhaps in mind?

Jordan Levine:
Metropolitan being the main one, really, and they’re one of

Unnamed Speaker:
Could you repeat the question, Jordan again? We couldn’t hear that.

Jordan Levine:
Sure, sure. So Randy was asking who could still come in on a bigger scale? And I said that Metropolitan is still the main company that we’re speaking to. They’re one of the three or four people that Clay mentioned who are currently helping us assess the value of our library. And the library goes back to and

Clay Pecorin:
sorry, sorry to interrupt. Metropolitan is doing that because they want to secure the asset based on they’re going to, they’re going to do a blended debt equity. So make no mistake, they’re doing a evaluation, so they could lend against the asset as well. So that would, that would obviously dilute the value proposition for the people in this room. But if they obviously were to give more debt to pay down, it’s a benefit to us, but they’re certainly going to securitize that, that asset. So go ahead.

Jordan Levine:
Sorry, yes, so we’re still ranting in conversations with them. I think that, you know, when we were told end of the year, we had a finish line in sight. Now it’s a moving target. That could be March, could be June, we don’t know, which is why we had to come up with some other game plan. I mean, there’s a few other private individuals that we’re speaking to that have definitely been excited about putting a fund together. With that being said, of course, we can’t predict how soon that could happen, so as we are now hopefully moving forward on this new game plan, and we can go back to again, speaking optimistically, just focusing on producing movies, we feel like organically, these companies and individuals like Metropolitan could come to fruition, because we’re not putting as much pressure on the One situation. But Jason Kringstein, I see, yeah, yeah. Chiming in, you can probably read it better. It’s hard to read. Yeah, I can read there. Jason, do you want to chime in?

Jason Kringstein:
Yeah? Sure. Could everyone hear me?

Jordan Levine:
Yeah, Hey, Jason, yeah.

Jason Kringstein:
So basically, what I was saying is, I don’t know if Clay’s familiar with this or not, but as far as the cat. Stack goes different. People have issued debt at different times, and they’re all in different positions. Some people have agreed. Some people have agreements from Yale to be in second position, third position, with the SB, SBA being in first. So my two questions on that are, in the new entity, would that be honored? Because why would people, why would people just be Pauri pursue with every with all the $50 million in the in the new entity, when there’s different positions on the cap stack? And then my second question on that is that, did Yale accidentally give multiple lenders second position or third position, what have you in the cap stack? Because that would create an issue. And then how we navigate that. And then someone earlier mentioned the SBA, they would absolutely not allow you to sell off your library. That’s part of their collateral, and that would absolutely be a breach of negative covenants. So what exactly is Yale selling? Because that’s all pledged as collateral.

Clay Pecorin:
So I could, I could speak to the first point, which is, you know, every the the where debt sits is going to have to be agreed upon. I don’t believe that there’s any money that can be paid back to people unless there’s a new entity that starts. And certainly if you’re going to have a new entity, there’s no scenario where equity is going to be paid down to other folks in a preferential way. I think everybody sort of has to get on on board with understanding that second, third, first corporate guarantee. Everybody’s sort of in this mess together, and there’s really not anything there in terms of of the SBA and the valuation of the business. The intention is to continue paying the SBA loan and putting a valuation on that. You’re not going to actually monetize it, you’re going to sit and securitize it in second position to the SBA

Jason Kringstein:
Got it. But wouldn’t that greatly lower the proceeds that they would get? Because then you kind of be in like a junior equity position, if that’s the thing.

Clay Pecorin:
yeah, yeah. I mean, I The answer is, I don’t know the size of the library, right? I’m trying to extract value. And there’s some value right now, it’s sitting there doing nothing, and you’ve got to extract whatever value you have. And there is value in a second position to the SBA.

Sparsh Mehta:
do you have a rough idea of that value? Or I mean, do you guys,

Clay Pecorin:
we’ve heard anywhere from 3 million to 10 million, but I am not a I can’t speak intelligently to the value of libraries. It’s not what I do. It’s what you know, we have bankers doing it.

Sparsh Mehta:
I mean, that still seems grossly under collateralized for even someone like Metropolitan to provide a $30 million dollar bridge.

Clay Pecorin:
Well, remember, the bridge is the bridge is not all debt. It’s equity as well, right? So it’s a it’s both,

Sparsh Mehta:
but equity in a fundamentally insolvent entity.

Clay Pecorin:
I’m sorry. I didn’t hear that.

Jordan Beckerman: Sorry, I missed it too.

Sparsh Mehta:
Equity in a fundamentally insolvent equity entity, correct, right? Like the majority of it is going to need to be collateralized with the library. That value is pretty significant. Needs to be pretty significant here for any future investor to also come in

Clay Pecorin:
it’s a new business, right? You have to think of it as a new business. They’re not investing in the debt, right? So a movie is a product of debt, mass and equity, right? The business that we’re talking about setting has a debt portion, right? So that debt position will be first out the mass position if there is someone who’s going to do it. And I don’t believe the mass I think the mass market is absolutely blown up. So I don’t think that exists. The equity portion people still put equity in films. And those equity positions are going to be on an on a separate LLC basis, and they are going to put money in an equity position to make money on it.

Sparsh Mehta:
So sorry, I think I misunderstood. Is Metropolitan aware of this new plan to restructure? Or were they? Are they still under

Jordan Beckerman:
No, we haven’t spoken to them since this conversation really came up in the last week. We can have so this is all sort of new, but, you know, we want to have it as quickly as possible with everybody to try to come up with…

Clay Pecorin:
this, guys, I like, I don’t know that this works 100% until we all get in the room and determine if people are interested in investing in this new business or not. I mean, this is an open dialog. This is an idea that I worked on for a week, calling on the distribution folks to at least get that part of this. But ultimately, it’s an open discussion. Discussion amongst people, or obviously some very, very smart people here, and then figuring out how to make that work. If people are interested, I am

Unnamed Speaker (woman voice):
yeah, I am too, but I think we have to figure out the legal end of it to see if it is possible.

Clay Pecorin:
Yeah, I agree with that. Yeah.

Jason Kringstein:
I’m just thinking out loud here, and I just want to unpack everything you said, I my two cents is the only way I see this working is that if the SBA is taken out with the new proceeds, because I don’t see anyone buying a piece of the company, if the if the assets are held up as collateral with the SBA, with the hopes that that Yale doesn’t breach covenants or negative covenants, and and then and keep up to date on their payments. And then, if they don’t that, the assets are no longer given to the new buyer. I think I don’t I don’t see that happening. I think the SBA has to be taken out, right?

Jordan Beckerman:
I wonder if there’s a way to license those rights, as opposed to just transferring them completely, and I don’t know we’d have to look at it all that.

Jason Kringstein:
You would have to talk to the SBA. I don’t really know how that process works, but right now, the assets are theirs. They they’re pledged to the to the SBA. You can’t sell something that’s pledged as collateral.

Unnamed Speaker (woman voice):
People are asking how much the SBA loan is?

Cole Lunnum:
Again, could you repeat for those on the line,

Jordan Beckerman:
yeah, so power is just saying that if it’s a license for fair value, that it may work. So we’d have to look at that. But total amount of the SBA loan that we did is, the balance is 4.3 Million.

Jordan Levine:
Right

Jordan Beckerman:
And then there were EIDL loans as well. I don’t think

Jordan Levine:
I think that’s separate, yeah, right.

Clay Pecorin:
Which loans?

Jordan Beckerman:
EIDL, recommended, disaster, COVID, for COVID.

Megan:
How much are those loans? Because those are government loans too. So the idea will be under the pandemic program. So the four and a half on SBA, and how much is the idea?

Jordan Levine:
should actually be on that balance sheet?
No, the one we showed before, okay, yeah, okay,

Jordan Beckerman:
there’s 4.3 left on this very

Jordan Levine:
which. Where would it be? Maybe Ode to vendors.
Doug, are you on here?

Doug B:
yeah, sorry. She said, Don’t unmute myself.

Jordan Levine:
Doug, you know the balance is right at the EIDL loans.

Doug B:
Yeah, give me one sec. Just blown up right now.

Jordan Levine:
Okay

Sparsh Mehta:
sorry, I came a little bit late into this. So the play here is to create a new entity and rollover, you said, approximately 50 million in liabilities into that new entity and the IP and the pipeline

Clay Pecorin:
no, the idea is not to roll into the liabilities into a new company. The idea is to set up a new entity completely that focuses on distribution, production and IP and have that be a debt driven business where people who invest will take their money and get a pref and equity returns will be sent back to Yale entertainment or their the creditors within Yale entertainment on a para pursuit basis. We’re not transferring assets into a we’re not transferring debt into this new business.

Doug B:
So the amount of the idols with the interest is 3,570,510.000
But without the interest, it’s 2 million, $124,400
and those are 30 year loans with 28 years left.

Megan:
That’s that’s about 8 million in government loans that you have that are secured by the assets at Yale, that correct?

Jordan Beckerman:
Yes

Megan:
So, that would seem that you’d have to get someone to if you were doing the deal, you’d have someone $8 million to pay off the government loans for you to be able to create the new entity or restructure the remaining corporate loans. And corporate guarantees, is that correct?

Jordan Beckerman:
Well, do we need to do that to create a new entity?

Clay Pecorin: No, you service the debt from Yale entertainment. Yeah, the new entity is, you know, a new entity and and any equity returns go back to Yale entertainment to service that debt and to pay down investors.

Jordan Levine:
Also, the EIDL loans are not pricey for three it’s around Doug, correct me if I’m wrong, maybe eight to $10,000 a month. The SBA loan is approximately 70 a month.Correct?

Doug B: Yep.

Megan:
Where’s the cash flow right now that you’re, are you behind? You’re behind on those or you’re the cash flow right now for those like, Are you, are you in default on those loans now? Or are they where

Jordan Levine:
we’re we’re basically two months behind on the SBA loan. So December and January.

Megan:
Okay

Jordan Levine:
EIDL, I think Doug, we are.. just December. Okay

Megan:
So what’s the plan for servicing that debt? Then, is it from? It’s from the new entity that your plan would be, that you service that debt from the new entity by selling, distribution or distribute like doing. Is that what the plan is?

Clay Pecorin:
That’s the plan, yes,

Unnamed Speaker:
going to set up sort of a lock box situation in terms of covering the debt, you know. So, you know, it just makes it a little bit more checks and balances. Think

Clay Pecorin:
you’re going to have to do that. I think we’re not that massive. If we do this, we’re going to have massive checks and balances, and individuals in this room are going to be in charge of them.

Matt Newman:
So how do and apologies, because this is the part I’m saying. How would it work for debt that’s tied to specific films, because it sounds like you’re transferring the films over to the new entity, but not the debt that goes with it. But yet, you were, you had said that the for debt that’s tied to a specific film, as those films roll out

Clay Pecorin:
Guys, I don’t think, I think we’re getting confused with transferring and whatnot. I think one entity is a debt driven business that has nothing to do with Yale entertainment, other than the fact that the benefits that come from that debt business, outside of the return of principal and the pref the benefits of that go to pay down Yale entertainment. The current movies that exist in Yale entertainment from a revenue basis, will continue to pay the investors that have a loan against those current films. The corporate guarantee that everybody has in this in this room or on this zoom is the issue that we all have. Corporate guarantee is what is being tried to be paid down on everybody that I think has an investment in film also has a corporate guarantee. There is no question that the folks who have a position against the film are in better position than the ones that are uncovered on a corporate guarantee standpoint, because there is an asset that they are specific to. So ultimately, you still have to pay down this, this number, this corporate guarantee, Yale entertainment, however you want to define it. But the transferring of assets is not what the goal was. The transfer. And again, I guys, I didn’t, I wasn’t, and this could be on me. I didn’t look at I didn’t realize there was an EIDL loan at that point, so that that’s on me. I so I think that this really is a position where the library value is going to be difficult, because I don’t think it’s going to get to that number to pay anything, to pay that off. And I even if, you even if, even if it was, I’m not sure that that’s the best use of capital. So I think it’s really this is buying into a new entity, understanding you’re getting a prep on your money. It’s very protected capital, and there will be some equity in producing fees that go to pay down this overall balance of $50 million I think that’s the as simplified as I can make it

Transcript 3:

David Gilbery:
Jason. Jason is David. Can I? Can I ask a question for those of us who aren’t as sophisticated as others on this call, could you explain when, when you say this new entity is going to be a debt driven business? But then I I hear that the sort of three strands of the business are distribution, IP, development and production. In what way is it a debt driven business?

Clay Pecorin:
Well, it’s structured as people are making investments as debt. The debt side of this is on the distribution side, which is where the majority of the money is spent. And there’s ways to set up the P and A spend which is going to be debt. Debt. Again, there’s risk in every piece of debt in any business I’ve ever done, but these, it’s secured by the value of the distribution agreements, right? So, so take a $500,000 movie. There’s a airline deal for $150,000 right? So that’s protected in some way. Somehow, the IP that I’m hoping they’re going to acquire is going to have value, like a Janis Joplin, which, which you guys should go over is going to have value. And you’re right, the overhead, which should be very, very small, is uncovered. But I don’t think it’s uncovered in a way where the distribution business doesn’t cover the equity slug. And again, guys, I’m relatively new to this, you know, total and trying to figure it out. I’m trying to find a way where movies that exist, that don’t have distribution, have a way to do it with best in class ancillaries, and also in a way where, whereas there’s money is flowing into this business where it just doesn’t go away. And if, if everybody has a different value or better way of doing it, I’m happy to do that. But right now, the only thing I understand is they have an option of going bankrupt, where we see nothing, or we have to do something else. But

David Gilbery:
I just, I just want to clarify, we…
so the production. Let’s just unpack these three strands for a second. Yep, so the production side is the business that they are in now, right of producing independent films, and on the basis that you’re able to put those movies together with other people’s capital in an ideal world that would either be sort of streamers or studios or somebody, rather than private individuals, there’s a world where you can take in, on average, between five to 10% of the budget as a producer fee, right? I mean, in essence, that is the business model of the production strand, right? And try and make those films as commercial and as big budget as possible to elevate the value of those and maybe there’s a library value in that that you build up over time. The development side of acquiring IP is is sort of there to fuel the production business, right?
And the distribution side, I just want to be clear on this, if you’re talking about setting up a distribution vehicle and white labeling a deal, and being able to tap into sort of best in class studio and are we talking about taking the existing Yale library and trying to push the unsold territories that there are on the movies through those ancillaries? Because if that’s what we’re talking about, that doesn’t fill me with huge amounts of excitement. Because, you know, I know how tough the foreign market is, and for movies that have been sitting there for years with unsold foreign territories, there isn’t miraculously going to be a huge chunk of money there.

Clay Pecorin:
Yeah, I think it’s, I agree with you on that. I think it’s more domestic, I think the domestic drive. So there’s, I don’t know, four or five movies that have no place to go. And there are a couple places that have been offered rev shares deals where there’s value in these, in these businesses. And I think the cost of sort of white labeling, you’re not making a billion dollars on this, guys, this is

David Gilbery:
no but my question, I asked the question is, I understand the different strands, right? I’m in all of those businesses myself. So am I? And what my question is Is, is the distribution business being set up to be a new distributor that would also acquire third party films? Well. Or is this just to service the existing Yale library?

Clay Pecorin:
So in its initial phase, the goal is to distribute the films that don’t have a home, that have a name, right? So, you know, there’s a couple films with nobody in it, you’re not gonna be able to do shit with it. But the ultimate goal is to also acquire other things and be competitive with the smaller, the smaller places that they have been using the quivers of the world. I don’t think you’re going to get anywhere near competing with vertical and I don’t think you want to be but I think that there’s certainly a number of the level 33, the there’s a business model that exists in acquisition of these smaller titles that people have been clipping. You know, 50, 60, 100 grand, 150 grand. That’s ultimately the goal as well. But you want to be in a situation where the cost isn’t outweighing the benefit. And I haven’t gotten to that price yet.

Jason Kringstein:
Yeah, I wasn’t aware that we that Yale was late on the SBA. What does the foreclosure proceedings look like? So basically, I’m asking, How much time do we have right? So if we have a year right, that would be substantial. But if it happens after three months, and we’re two months late, and we have one month to figure this out that would put a huge, huge breach on what we’re trying to do here. So when do they actually take control and foreclose on the assets? What’s the cure look like?

Jordan Levine:
So I know that you have a 60 day grace period. So on December would be February 4, till they even contact the business committee regarding what’s going on, but, but as far as foreclosure, I mean, it’s way past that. I mean, we’re nowhere near any conversations outside of the bank, which is Lake Michigan in Tampa. So that’s where we’re at. And you know, at this point, nothing’s been reported anywhere to anybody

Jason Kringstein:
got it. And then once you get current on that loan, I don’t know the numbers, so I’ll make them up. Say you took, say it was $8 million that you borrowed, and you have $4 million $4 million left. Can you refinance in some way where you can pledge less collateral and then release the and then release the company asset part bucket of that collateral, so then you have something to sell.

Jordan Levine:
Yeah, so $5 million is the max loan they give under the seven a program. And I’m not sure about releasing collateral. I know that we’ve had that discussion regarding certain aspects, but, yeah, I mean, I think that from from our perspective, I think, Jason, you’re right, like, best case scenario would be to write a check and get rid of the loan. I think that’s a tough number while trying to take care of these other aspects of the new company. So I do think that servicing the loan, which, you know, for two and a half years, we never had a issue with since the summer of 22 would be the best path forward.

Jason Kringstein:
Got it. And then the last question on the SBA is, how many, how many lenders in both like actual lenders and dollars, are actually on a specific position in the cap stack. So is it 10 million of the 50 million? 5 million of the 50 million? And then also, how many actual lenders?

Jordan Beckerman:
I think the I don’t have it in front of me, I think the vast majority of of people on this call and who have corporate guarantees are related to films more so than specific positions in in Yale, but I don’t have the the exact

Unnamed Speaker:
I know there’s, there’s $3 million in the second position. UC, stealing. There’s a second position, lien, UCC lien from a creditor for 3 million, I think, trying to buy out the SBA loan. The SBA loans employees into other countries. It’s all together. Once the SBA is gone, then it’s going to be free fall. Same logic for the Senate, yeah, so, but the government, I worry about more than right? It’s like, it’s like, Oh, if there’s a little fat left over after the government, that’s also $3 million so we’re 10 stock. Is there any chocolate? Like, you know, offering up, folks offers a compromise. Okay, I know the second day in UCC lean would walk the major repair. He has a pretty aggressive deal, because it was set up as line of credit to your audience for bridge line of credit. It. And then, you know, because what Jordans mentioned, a couple of large deals we were working on, fell through. So then we kind of in a position where we’re constantly revolving this very high yield short term debt, pretty large number. So it’s very, very expensive capital. And he’s, you know, in second position. So I know he’s willing to, like come to come to the table and kind of stop being, if you will, very much smaller number of things to continue through that. I don’t

Clay Pecorin:
know how that gets paid, but that’s the issue. Is, I think half the people in this room have a UCC right, and everybody can fight over UCCS and call on UCCS, but where’s the money coming from? I mean, I hear that. My answer is, your guy has every right in the world to try to file and everybody to and everybody blows up at the same time. I don’t, yeah,

Unnamed Speaker:
I don’t think that is interest at all, yes. Like, you know, I think it’s just like everybody else, you know, nobody wants to see this go under. Everybody wants to protect their own interests. But on the same hand, like, kind of understand we’re all in together. So I think he’s trying to

Clay Pecorin:
No, no, I don’t get the point. What I’m saying is I think everybody’s interest is the same. Yeah, in this room, we’re all in the same position. Some of us have bigger numbers, some of us have smaller numbers. Some of us can tolerate the bigger numbers. Some of us can not tolerate the smaller numbers. And I get that, I, I think that these guys are really open, and I don’t want to speak for you guys, are open to anything that allows this company to go back to making producing fees, monetizing current films that aren’t being monetized, monetizing the foreign rights that, yes, they it’s not aging fine wine, but there are certainly some monies that could come out of these things. And and I think that that is, I think that was the purpose of this sit down. And I, and I agree with everybody in this room. This is the This sucks. So the question is, does everybody want to pack up their their ball and go home or find a solve. I’d like to find a solve, but I also understand I’m not the only one in the room.
I think everybody sort of needs to. And again, this is a lot, right? Because I’m sure none of you guys had an idea of what the number was, you know, as, again, I’ve had, you know, a week and a half to two weeks to sort of digest that, to try to come up with something that’s, that’s, I think, a way to get some capital out. But again, I’m not the savior of the world. I’m a creditor trying to get my money back to so I think that ultimately, people, either today or tomorrow or the next day or, you know, next week, need to determine whether this is something they want to participate in, understanding that they’re going to ultimately, hopefully benefit from the new investment and thereby benefit from the second investment. But I, you know, I don’t, I’m not a wish I was. I’m not a salesman. I’m not selling on anybody a bill of goods. I’m selling them on what I’m prepared and willing to do.

Unnamed Speaker:
Open question is, first off, it’s great that you brought in clay. How you put forth the effort. It’s outstanding. We we all needed to hear at least an idea. Uh, so that’s outstanding. A lot of smart people on this call. This is Eric Broughton, by the way, lot of, lot of smart people on this call. A lot of people have much more film experience than I do in distribution. Everything else. What other options have been brought to you? Because Clay’s bringing an option. I haven’t heard any other, and it doesn’t sound like Metropolis or metropolitan, whatever is. They’re, they’re, they’re an idea. Anybody else have any other options that brought to your table? I mean,

Jordan Beckerman:
not really. I mean, we’ve had some preliminary conversations about, you know, could there be a fund situation that isn’t directly paying off debt, but that exists to fund films, I mean, very similar to what we’re talking about here. So, you know, there’s different potential sources of that capital. And I think that, you know, our hope, and you know, again, appreciate everybody weighing in. And I know this is not ideal. It’s certainly not easy for us either. But you know, I think for us, the idea is, if we can have something separate that is able to jump start our ability to make movies like we don’t need to make, you know, a ton of money, like we just want to make money, to make people their money back. And so whatever exists that can jump start our ability. D to get into the next 5, 10,15 film productions, and we’re able to to specifically target, you know, projects where we can make seven figures per film, you know, we do believe we can get, you know, going on that, but without the sort of capital behind it, it’s very difficult to do this on kind of a one off basis. And so that was the the conversation with metropolitan, I think to a large extent, that’s the conversation that we’re having now with the people in the room. I think, you know, it may very well be one of these scenarios where, if we do this, and then we have a real number, we start, you know, talking to other people that we may be able to bring in, you know, more substantial capital, which allows us to do this on a bigger scale and really jump starts everything that we’re, you know, trying to do. So I think that we do have the ability to go out and do that. We haven’t, sort of, you know, gone too far down the road, frankly, because we’ve had these two major options, Metropolitan, and then one before that, that, you know, we thought each of those was going to be solved. And I think Metropolitan is still on the table, but I’m sure that there are others out there. But we really haven’t spent, you know, no, we’ve been searching for those.

Jordan Levine:
We really haven’t spent time on that, or even focusing on movies in general, because we’ve been kind of running from loan to loan to keep up the best we could. And again, at some point, it just became apparent that it was not feasible or sustainable anymore.

Sparsh Mehta:
So Metropolitan is fully aware of the current financial standings across the board, including the SBA loan missed payment, and they’re still willing to have a conversation going forward.

Jordan Beckerman:
Sorry, is who aware we have
not they’re aware of our debt situation, so they know that some of the use of funds in that deal was going to be to pay down debt. I mean, the SBA situation right now is a new situation, unfortunately, and so we haven’t spoken to them about that yet. We haven’t spoken to them in earnest since kind of the middle to end of December.

Jordan Levine:
But we’re also not in a situation where the SBA is problematic. We still have another month or two before anything becomes an issue.

Sparsh Mehta:
Yeah, I think it becomes really difficult for any kind of like institutional player to come in. Here. Is there a proposed plan to kind of restructure the existing entity at Yale? I and wipe some of this off the off the books. Matter of speaking,

Clay Pecorin:
I think most of the money in Yale is individual money, right? I think everybody’s gonna, everybody realizes the interest isn’t going to happen. So I think, I don’t think there’s, you don’t have an institutional partner in this trade, right? So it’s all individuals. I don’t know how you wipe it off the books, because I don’t think anybody’s going to volunteer to take their money off the
books.

Unnamed Speaker:
What is the interest rate on the SBA loan. And I assume that’s probably, that’s probably the lowest burden, the lowest obligation, burden, obligation that you have. So, so why? Why pay that off? Yeah, any earlier than than you need. It’s the cheapest source of money at this point, it’s around. So let that continue. Is there any penalty for making late payments to SBA? And the other question I have to clay is, what’s your guesstimate of the amount of additional capital that you’re looking from this group to to invest, and if, if, whatever that number is, assuming that everybody agreed to participate wouldn’t be, which is unlikely, I would think, because everybody has different circumstances. And is it, in fact, growing good money after bad as you, as you said earlier on, but, but hypothetically, if everybody agreed to participate, wouldn’t the most logical approach be to each individual debtor to to invest X percent of that amount of debt in order to keep the the burden and the and the and the benefit proportional to where we all are.

Clay Pecorin:
That’s the ideal. That’s obviously the ideal scenario. Yeah. Everybody is going to put in for sure, I think that you know from a numbers perspective. And when you use the SBA loan, this is going to be rough math. So just to keep the business afloat, you’re talking on $150,000 a month the distribution business, I think the cost is 35 to 40 a month, and that’s because we’re just using the box of someone else’s, just people managing it. And the IP is, you know, it’s going to be on a it’s going to be on a cost basis, but I certainly don’t think they’re going to to be doing million dollar IP deals. And I think that we’re going to have controls on it. The benefit of a distribution deal is those monies should come back more quickly than than a movie that’s just being going under production. So my hope is that the money’s revolved starting six months from now, so you’ll start seeing money back. So you know, based on on those numbers, you’re talking probably a $5 million raise where you’re calling on a certain amount of money a month, and hopefully by six months, it’s working it way. It’s working its way through, and you’re not calling on 2 million of it.

Unnamed Speaker:
So, so then roughly 50 million, probably 10% of whatever you’re currently indebted at this point, eliminating all of the interest that has accrued that won’t be paid, you’re saying invest 10% more
to the to the capital.

Clay Pecorin:
I’m saying that and make. I’m saying commit. I’m not saying write that check, right? I’m saying commit to 10%

Unnamed Speaker:
and to be called as necessary over a period of time, correct? And maybe not all definitely Everything understanding oversized from everybody. Well, when it’s yes, you’re going to like.

Clay Pecorin:
Yeah, right.
The biggest issue here, from my perspective, is there have been no checks and balances, right? It’s and that’s why, you know, these guys have a fairly significant loan balance as they got over their skis, and there was noone there to say, hey, guys like we this conversation, and they know this, I’m not dogging them. This conversation should have happened nine months ago. Yup, 10 months ago, 11 months ago.

Unnamed Speaker:
so clay, let me just go one separate. So basically, what you’re saying is roughly, at first glance, if each investor were to put in, say, 5% more of their indebtedness, of their capital, I should say, of the of the money zone, 5% upfront, and up to another 5% callable, as needed, when needed, right?

Clay Pecorin:
I think that’s exactly right.

Unnamed Speaker:
So what you’re saying is you’re looking for about two and a half million dollars upfront from the with us all with a real

Clay Pecorin:
commitment on the two and a half, on the additional two and a half. Like, people start to walk that thing, it effs up everything. And this is the film business. I’ve been in a long time. People change their minds

Unnamed Speaker:
what’s the total? PCA, like, we’d walk out here and say, Hey, how do we clearly, what’s that number?

Jordan Levine:
So it’s currently at 1.5
I think that there’s definitely deals to be made. Maybe we could get it down to a million.

Clay Pecorin:
So I asked, and I don’t know if you guys have done this, but what have you taken out? What have you paid back? What is the short what is, let’s take principle. Only these guys want their money back. They’re going to be aggressive. But what is the principal shortfall? It’s not a million and a half

Jordan Beckerman:
No to get back. I mean, and this is the problem with it being so high interest to get back. Just to the principal, I think the number is around 115?
Jordan Levine:
no, it’s probably like 300 to 400

Jordan Beckerman:
Yeah, yeah, so, but, but a significant portion of it is interest. I mean, that that’s and, you know, these are not people that we know. These are not you know, and and our concern with that is that you know, they will rush to file

Clay Pecorin:
Well really big problem, because now there’s $8 million of government shit that they’re sitting behind. Go ahead, yeah, yes. Go ahead, yeah, get your 300 grand or fuck off. I mean that, I think at some point, excuse my French, everybody. But like, they want to get paid back.

David Gilbery:
Sorry. Who are we talking about?

Jordan Beckerman:
The there are certain types of loans called merchant cash advance loans. They’re hard money lenders that, yeah, have been taken out over the last year. That, and some more recently, to keep things going that are, there’s a balance due on those. And the issue with them is they’re extremely aggressive. And so the conversation that’s happening here is, you know how to deal with with that and not have them cause a problem that causes a larger problem.

Unnamed speaker:
That’s 300 months you said, What’s that?

Jordan Beckerman:
I mean, up until now, it was about two to 50 a month. Some of those are being paid off because they’re relatively short term, but the balance on those is still significant. So conversation that we’ve had with Clay and that we have started having with the lenders is, how much would it cost to just lay them out on their on their principles, so that they have a lost money and then deal with the interest a lot more calmly, we feel like then than not. But you know, that is going to come up pretty quick here in terms of having to deal with that. So that’s an kind of an immediate issue.

Unnamed speaker (Maybe Peter):
Just as you mentioned before you go, how much do you think that your distribution energy would be on a monthly basis to operate?

Clay Pecorin:
I think it’s somewhere between 35 and 50 a month

Unnamed speaker:
But, with the other you talked about it with another 150

Clay Pecorin:
150 it’s

Unnamed speaker:
it’s less than 300 a month?

Clay Pecorin:
Yeah, I think the total is, that’s where the 5 million is coming from. So I think it’s $400,000 a month. And I think that is high because it also allows for some IP but again, I think after six months, you’re going to start recycling some of that capital within the distribution business, and also, within six months, if they don’t have a movie where they’ve gotten a producing fee, we’re all going to revisit this and say, You know what, we just flushed 5% I don’t think that’s going to be the case, but I think if we don’t put in 5% of the 10% slides out

Jordan Levine:
yeah. I mean, we have a very good track record. I mean, David sitting here. David Gere worked on two movies for us this summer in Connecticut, which Russ brought us one called Midnight with Rosario Dawson, Mila Jovovich, was easy ish to get up and running. I mean, that’s a good example of a movie that has commercial value. It’s a genre film. David was able to keep it contained in Connecticut. I mean, we have a lot of great people in place. New wise development. Wise Scott has worked on a lot of IP deals, in which one we’re discussing now, in particular IP, also clay, some of that could come back rather quickly, right? Because that money would technically come from the budget of the particular film. So we could show here in a minute or two just our upcoming films doesn’t have on there everything. But as an example, Chick fight like Becky, we are now discussing chick fight two that Rosario Dawson would commit to, such as Marlon Ackerman, maybe Vanessa Hudgens quiver, who we would not want to work with, but they they do have first right of refusal on that film, because they did distribute the first one they’re interested, if we want to come on board as well. So there’s a lot of traction.

Clay Pecorin:
Just quickly that first right is that first right to finance or first right to distribute. So it’s first right to finance?

Jordan Beckerman:
No, distribute. It would be Yeah. It would be both. I mean, you’ll be distributing, yeah, right by putting up an MG. So, and there may be a last matching right as well, but they have to put up an MG.

Jordan Levine:
Yes, we could say no, they put up around 2 million for the first one. Now, “Chick fight” was a film, and we should talk about this that was successful in the sense that the pay one window, Amazon bought for 3 million. Compare that to our David Coveney film, which is a solid film. The pay one window was 125k and granted, times are different back then and now. But with that being said, I think there’s equity. There’s a lot of people that are excited about “Chick Fight”, and I think that’s one that we can get up and running rather quickly.

Jordan Beckerman:
Yeah, and I don’t know if we want to go through the deck, I mean, we have other Greg

Unnamed speaker (woman voice):
Rubin had a question, oh, about is there any income coming in on a monthly basis, whatsoever.

Jordan Beckerman:
Um, we really

Jordan Levine:
that would be per film, so not necessarily on a monthly basis, but as an example we discussed before, there’s still movies out there that are selling right, whether it is Bucky Dent or Collective or Fog of War. So as we’re making further sales, and I think a lot of people know that we’ve had our own sales company that is now we’re going to be done with that. It just doesn’t make sense financially. But we’re going to still give these movies to various sales companies to sell. All to continue to sell the rights that have not been sold.

Transcript 4:

Joe Annunziata:
May I ask a question? It’s Joe Annunziata, hi, Jordan. How are you?
I’ve been listening in. I just have a question on the I guess you called it a merchant loan. What is the rate of interest on that loan?

Jordan Beckerman:
It’s excessively high. It’s 50% I mean, so technically, it’s not alone. Technically it’s a it’s an advance against receivables, because they can’t call it a loan because the interest is too high. So because, when

Joe Annunziata:
I heard how much the interest to the principal, I figured, where are the usury laws? Is something like that.

Jordan Beckerman:
Well, I think that that is, you know, if push comes to shove, that’s something that may have to be invoked. Because I, you know, the idea is that they, they can’t treat it like alone, which is why it’s structured the way that it is. But if they start treating it like a loan that there may be, you know, opportunities pushed back. But, you know, quite frankly, the problem is, you know, you’d have to pay a lawyer to deal with that, and that creates, you know, more cash flow going out that, you know, may hundreds and

Joe Annunziata:
hundreds of 1000s of dollars just use your interest. I think you may have some grounds there.

Jordan Beckerman:
Yeah, yeah.

Joe Annunziata:
Okay. Thank you, gentlemen.

Jason Kringstein:
On the note of excessive interest, I understand that we have to collectively put in the 10% I understand Clay’s idea and that, speaking of collective I think it’d be worthwhile asking how many people are willing to put a pause on their default interest. Because if everyone’s collecting two to 5% a month, or whatever it is, it’s a physical impossibility for us to get paid back. It just can’t happen. The default interest alone would be x, multiple x times the revenue, the revenue of the company, right? And I’m sure we would all be happy getting paid back in our basis plus our original fees or in our original premium. So yeah, as I said, How many people be willing to, you know, put a pause on default interest and even forgive past default interest.

Unnamed speaker (woman voice):
I think you’re going to have to go even beyond that. I think, you know, you just start with whatever the principle was, and then try to work yourself if there is an excess. I think it’s great, but I gotta be realistic.

Unnamed speaker:
I was the first thing you said, literally, it’s not smart and pragmatic here. Excuse me. Sorry, getting over COVID. Work on the principle, and if there’s something after that, fantastic, default interest. Mean, come on, I’m a lawyer, by the way, used to litigate like large commercial cases. So I get it, you’d be part of my language. Be really fucking stupid to pursue that route here, right? So let’s work together. My opinion

David Gilbert:
can I just ask on the on the issue of interest, default interest, which is all sort of fairy tale land at the moment, the $50 million of corporate guarantees that were there is, is that the outstanding capital balance on those loans. I mean, I’m not remotely interested in interest and everything else there capital is obviously the most important thing. What is the capital balance on those corporate loans?

Jordan Beckerman:
So everything which includes investments that are tied to films. I believe the principal number is 47 but you know, we do expect that the films will generate some amount of money through tax credits, through, you know, some sales, sales that haven’t been collected yet. You know, films that have just been completed, that you know or haven’t even been completed yet. So, you know, it’s, it’s hard to say what the actual number is that we sort of have to get on top of. But, you know, obviously it’s significant, but it the 47 is, is the, the principle that is out across everything.

David Gilbert:
Okay, so Jordan, this is potentially interesting what you just said. So if I understand this, right, I mean, there’s obviously a difference and, and I’m in the UK, so I don’t know too much about the COVID related loans that were given out in the US. We had a similar thing here. But, okay, so let’s say, let’s say you got $47 million right? We are talking dollars, I assume, right. You got $47 million and not all of that… Does that include the government backed 8 million or not?

Jordan Beckerman:
I don’t think so. Actually, that’s individuals who are, who are in

David Gilbert:
Okay, so I’m just gonna, I’m gonna put the government stuff to the side, even though, obviously I can’t, because it’s secured. But let’s just pretend that’s not there for a moment on the 47 on the whole, that is people providing loans to specific film projects. So they provide loans to the SPVs, and then those loans are effectively backed up by corporate guarantees from Yale. Correct. On the whole, I’m sure there’s probably a few like that, but or not, some of those loans that have been provided to films, I’m assuming not all of them, are risk loans. I’m assuming they’re not all equity investments that were structured as loans and then backed up with guarantees. I mean, some of them must have been, as you said, secured against tax credits, pre sales, are some of those collateralized loans in the individual SPVs

Jordan Beckerman:
Individual films. I think that it does vary, right? So you understand film finance. So there are some that are first position against everything, and there are some that were in a riskier position, in more of an equity position. So it really depends on, on the the film and the deal that was done. And so again, the likelihood of all of those being paid off is very hard for us to say, because we don’t know what sales are going to look like, especially on,

David Gilbert:
no, I know, but, but, and this is really key in here is trying to break this down to a sort of granular level. Let’s say your outstanding capital balance for getting the government stuff is 47 million bucks. Now not all of that, I’m sure is going to be collateralized loans, right? But, but is there a schedule of receivables within each of the SPVs to show how much of those specific loans are covered by pieces of paper?

Jordan Beckerman:
You so you’re talking about, you know, if there’s executed sales that cover the exposed money,

David Gilbert:
yeah, so, so, for example, I financed “Chick Fight” for you guys right under my previous company, right? And we provided you, I don’t know, two, 3 million bucks. I can’t remember at the time, but we were secured against the MG from quiver, which we knew was backed up by Amazon. And so as such, whilst we provided a loan to the SPV, and you might have given us a corporate guarantee, I can’t remember, but we knew that we had some solid collateral that was going to be taking us out. So even though technically we might have been a creditor to the parent company, the likelihood of us actually being required, and in that instance, we weren’t, as you know, we were totally paid out on time, and everything was fine. So what I’m trying to get a grip of is, are there, are there active loans within that 47 million capital stack there that actually are covered in in pending receivables within those specific LLCs. Or are there like or are we talking about 47 million, for example, of gap loans that ultimately require sales

Jordan Beckerman:
it’s closer to that. It’s closer to gap because with most of the films that were done in 22 and into 23 it was investments that were made based on future sales, and then when the market shifted, those future sales were not nearly as robust as we thought. So that’s, that’s the vast majority of them. There are, you know, some completed sales here and there, and there are completed films that have not been taken to market yet. So again, those would go towards, you know, chopping that number down. But it’s hard to say what, what exactly that chopped down number is going to look like,

David Gilbert:
yeah, and, I mean, and those revenues ultimately are pledged to the individual lenders who have loaned and secured against films. But it was just because you mentioned things like, oh, there’ll be a tax credit or something that would come back. But I know the way you guys finance movies in a quite a traditional way, and you will have had a three point capital or a bond it, or somebody advance against all of those revenue streams

Jordan Beckerman:
with pre sales. Yeah, so and again, we haven’t been doing those types of movies. You know, quite as frequently, which, you know, frankly, we need to get back to doing on a bigger scale. But no, I mean, it’s those numbers don’t include a three point or a bonded who are waiting to recoup, you know, money from a pre sale like that. That’s not the outside that. Yeah, that’s not part of the form.

David Gilbert:
So any of the actual secured, collateralized loans against receivables that are actually pieces of paper, rather than sales estimates, live outside of that 47 million

Jordan Beckerman:
To a large extent. Yes, I mean, again, there’s specific people that have specific lateral related to specific films that maybe hasn’t been executed yet, not not signed, but, I mean, like finished. So again, it’s hard to say what that number is, but everybody that lives in a specific film entity and has investment in a specific film, as that film generates revenue based on that collateral, it would be paid out to those investors which would take it off of, you know, our, you know, debt stack as it as it proceeds,

David Gilbert:
yeah, no, I get it, but I just wanted to understand the majority of it is at risk pieces that are against unsold territories and distribution to be generated revenue streams.

Jordan Beckerman:
Right

David Gilbert:
Okay, and, okay, good. That’s useful to clarify. And my second question is,
Obviously, you know you guys, when did you start Yale?

Jordan Beckerman:
2017

David Gilbert:
And how many movies have you made since then?

Jordan Beckerman: 50, right?

Jordan Levine:
Yeah, around 50

David Gilbert:
50 films? Yeah, so on average, that’s sorry, when did you say started it 10 years ago?

Jordan Beckerman:
Yeah, so the first few years, it was more like three to four films per year. And then yeah, 22 I think we were up to about 10 films per year. And then 23 was obviously strikes, and that blood in 24 we did make what, seven or eight films this past year, but, you know, a group of them was a, was a slate of five horror films, which, you know, again, we can get into the kind of what’s coming up. You know, we’d like to do that. Again, we have a relationship with 50 Cent, and he wants to do a slate of horror films that are probably around one and a half to $2 million and do five of them, and he promotes them. So, you know, in terms of what that looks like, and how much money you know, we can make from from that, again, it’s, it’s hard to say, but these are the kinds of things that we need to be focusing on, because that will generate, we feel a significant amount of revenue for for the company that goes towards paying down this number.

David Gilbert:
Okay, and sorry, I’m sort of hijacking this conversation, but it’s just useful. I think there’s just some useful context here. Whilst you guys have obviously been producing movies, I’m assuming you’ve been acquiring IP, optioning, books, optioning, articles, podcasts, commissioning writers to write original things. There. Must correct me if I’m wrong. But is is there an existing development slate of sort of bubbling projects alongside the library of completed films and things as well. Because, you know, we talk about in part of this new capital funding IP, but is there sort of developed IP sitting there already?

Jordan Levine:
Yes, yeah, we have a bunch of films that are technically ready to go. We have to do the deals with the writers and their representatives. But I think in that sense, we do. We haven’t been optioning articles or books per se. But you know, one which we spoke about David is the story about the Hart family from the WWE and that’s a whole nother kind of business within our business that we’re looking to explore. So we have a relationship with Natalia nighthart, who is the niece of Bret Hart, and it started out just as a movie about her family, similar to the iron claw film that came out last year, but much more commercial. This is a film that the WWE is allowing us to use footage and their rings and their audiences, and it developed into more of a new kind of label. In Yale that we’re looking to produce sports driven content, mainly female sports driven content. So as an example, Natalia is very good friends with Vanessa Bryant, and we’re speaking about making a movie about her daughter who who passed away. In addition to a movie about Simone Biles, there’s a is a few ideas there that IP wise can be very valuable. And we would start out with the heart family story, which we already have a pretty big outline of, but that’s just an example of another kind of business within our business that we’re looking to explore.

Jordan Beckerman:
And I think the 50 Cent, you know, horror slate, is a real opportunity. I think one thing that, you know, we’ve seen is, you know, given sort of everything that’s happened, you know, we’re kind of looking at trends in the business and the types of movies that are really performing. And, you know, I don’t come from that world, but I’ve been sort of exposed to it more recently, and that’s the faith based movies are really doing exceptionally well. And we have a couple of projects that, you know, there may be some real opportunities to, you know, again, probably be a separate label, quite frankly, because I think that it needs to be, but I think there’s tremendous opportunity, and there’s, there’s new audiences that are really, really hungry for content, and a lot of these films are, are really breaking out. They’re not made for tremendous amounts of money, but we feel like with our connections, our ability to get cast, and with the right you know, projects, that there could be some real, you know, upside in terms of what those look like.

Jordan Levine:
Well, I think a lot of it is based on relationships that we’re looking to exploit, so to speak, in a way, whether it is the sports and wrestling world, which you know, has exploded with endeavor wiring WWE and Netflix and the deal they have now, but then also when it comes to faith based movies. As an example, someone like Cole Hauser, that we worked with on our movie, Panama has become a friend. Obviously, he’s tremendous now, from the Yellowstone show, he’s looking to get involved in those movies. Such as Peter Facinelli from the Twilight series, another person that we speak to, I think a lot of these faith based movies, if we were to explore them, you look at them to have people like Dean Cain and Kevin Sorbo, people that have not been relevant in many, many years

David Gilbert:
Dennis Quaid. Dennis Quaid did one

Jordan Levine:
Dennis Quaid, right

David Gilbert:
something. And they made it for 5 million bucks, 100 million or something,

Jordan Levine:
Right! So I think that’s a big part of this, is that the relationships that we all have, and again, just getting back to making movies, making those calls, taking meetings, whether it is raising financing with the Metropolitan or just putting movies together. So I think that that’s what we’ve not been able to do. I think that’s what kind of prompted this whole discussion with clay. When clay asked us, you know, if we’re working on X, Y and Z, and we said, we’re not, he said, why? We said, because we’re not spending any of our time making movies. We’re spending all of our time running from loan to loan, MCA company to MCA company. And we know that once we’re not, once we’re able to get back to making movies, if we’re able to that, we can do this very successfully. And all we want to do right now is spend 100% of our time raising money for these films and producing films, and we are very, very willing to, you know, put ourselves in the back seat and put this debt and this group in front of us in order to make the situation right. That’s our number one concern. That’s why we wanted to come here today, bring everybody together. And the only way that we know how to do that, or I should say the main way, is to make movies.

David Gilbert:
But can I? Can I say something Yes, as somebody who really likes you guys and and we’re friends, and we go way back, but the way to raise money in independent films is not by, you know, getting people to invest in equity positions and backing them up with corporate guarantees.Because people are not truly investing in the product. They’re saying, Well, hey, if the movie goes to shit, it’s fine, because these guys will just write me a check. So it’s basically a secured loan. I mean, it’s effectively a house of cards,

Jordan Levine:
right? So we can’t, I mean, that was our problem, and we’ll take that one on the chin for sure. That, you know, we started to raise money for movies in loans, opposed to just straight equity, which is what we were doing initially. And then we kind of ramped up, and we felt good about the market, as we were doing decent in the past, and we started to accumulate loan after loan. Market changed. We ended up in a position we are now. So I think moving forward. Or the difference is that we will take these commercial movies and pre sell as much as we can, whether it is just foreign and using that and a tax credit putting gap

David Gilbert:
Jordan, I’m not and again, this is not me trying to kick you guys in the nuts when you’re down, because I’m really not that. But I would ask you the same questions I’d ask anybody, you know, people come to see me all the time about investing in new companies and everything it’s like to date, you know, I asked you when you got started and how many movies you’ve made, and you said it’s like 50 movies and all that sort of stuff. I would go, you know, fuck these guys. You know in the indie space, I always talk about you guys to people, and I go, you know these guys I’m friendly with at Yale. They are so prolific. They get movie after movie after movie done, right? But if you are, if you are, if you are, effectively raising movies by offering people guarantees on money to entice them into taking risky positions and backing it up. And now what you’re talking about is starting a new business and then going back to the more conventional model you know of trying to lay off as much as possible with distributors, but also then raise genuine equity slugs. I guess I don’t want to be unfair in asking this question, but do you actually have a track record of raising traditional risk money, rather than bringing people in on the pretense that even if the movie doesn’t work, you’ll always be repaid?

Jordan Beckerman:
Well, I think, just to answer that, the positions for the more recent films have not been what we consider to be risky positions. We never expected to have to come up with, you know, a significant amount of money on a David ducovny film that, you know, that was made for a Responsible Budget. It was a good film that went to Tribeca, you know, the expectation on that was not, oh, yeah, we’re just going to lose this money and then worry about it later. The expectation was that we would get the same MGS that we’ve been getting, you know, for years on that kind of film. And so when the market, you know, changed significantly on that and parachute and several other you know, films that you know people had investments in, it started to pile up in a in a significant way. And so I think that we, we have a good track record in terms of being able to put movies together, but I think that we’ve been hit with, you know, some significant roadblocks. And, you know, obviously we should have made other decisions, because we’re here now. So I don’t think there’s any doubt about that, but I don’t want, certainly, the idea to be that there was risky money that, you know, we knew was going to that was not the case. I think we, you know, did things in order to get movies going, but we never expected to be in this position. We, I assure you that we did not.

Jordan Levine:
So, yeah, new financing that we’ve been able to secure as well on a film shooting soon is 181 money, which, not sure if everybody is familiar with that. I mean, it’s, it’s something that we have used now on several movies. Explain what goes

Jordan Beckerman:
Yeah. So, so basically, 181 money is if a film is funded primarily in debt, so in senior debt. So let’s say the budget of the film is, call it, make it easy, $10 million and there’s pre sales, and there’s tax credits, so there’s a loan against all of those pieces of collateral. 181 is if somebody makes an equity investment into a film in the year that the film is shot then through 181 and with certain transfers of copyright over to the investor, that investor is able to take a much larger write off for that investment than the amount of their investment so and this is completely legal and verified, but basically, if you if somebody were to invest $2 million on a $10 million movie, you can generally speaking, take the cost of creating the copyright as a write off. And so if you are a super high net worth individual who has $50 million of income, even though you’re writing a check into a riskier position, because it’s equity in, in the investment it sits behind, let’s say $8 million the value of the write off for the entire amount of the film is worth more to you than the check. Now, the equity position could still pay off, and there’s still rights as equity investors, but you’re sort of already making money by. You by doing the 181 investment, just but again, it doesn’t work for everybody. It only works for certain people that have enough income tax, passive income, all

Unnamed Speaker:
payments, all payments made to that debt was applied to the principal as opposed to interest payments, what would that total debt be? If that makes sense,

Cole Lannum:
Could you repeat the question, please?

Unnamed Speaker:
All right, yeah, well,you heard it

Jordan Beckerman:
I think I got it. So basically, the question was, if you look at all of the payments that have been made over the last or saying year, and how much of that was for principal, and how much was of that was for interest, and I don’t know the answer to that

Unnamed Speaker:
and if you were to take that interest payment and reply to the principal, what would be the remaining desk?

Jordan Beckerman:
Yeah, I mean, we’d have to go through those numbers, I don’t know.

Unnamed Speaker:
Which is better than 50.

Jordan Levine:
Yes.

Unnamed Speaker (woman voice):
Michael had a question in the chat about great escape, whether it was a flop and a cash drain or, if not, what kind of cash value does it add?

Jordan Levine:
Yeah, sure, so the idea of Great Escape was kind of twofold. One, to prioritize our movies and then two, to earn an additional 10 to 15% or so per movie, opposed to giving to a third party, and like the market, the company suffered because sales were not as robust as they should have been. With great escape, we paid to have somebody run the company and then an assistant for that person. So I think that company did fair. It’s tough to say if it was a success or a failure. I think it was also very beneficial in projections for future movies. I think with all that being said, and no disrespect for anybody involved, but I think that we want to now focus on working with third party sales agents that specify that specifically specify in certain genres, opposed to one overall company, and it will be cheaper and more effective. Say it again, yeah, sorry, yep, yep,

Jordan Beckerman:
yeah. I mean, really, the idea was to just vertically integrate something that we were doing on every film, and bring it in house. And I think that the idea was right, but I think the circumstances and the timing of when it when it happens, and sort of the nature of of the market and how that played out, it didn’t end up being as as lucrative as we had hoped they would be. And so given the situation, we feel like cutting overhead is critical, and so it might ultimately be a hit in the long run. But, you know, just given where things are at, it feels like that’s kind of the necessary choice.

Unnamed Speaker:
Going back to the note of pragmatism, so easy math, right? 50 films, 50 million in debt, million dollars lost per film. What changes today that you flip that and make a million dollars for film? What are you guys gonna do different? Sounds like you have great projects, but educate us and sell us on what you’re gonna do different?

Jordan Levine:
Yeah, well, I think that, you know, once we get into a movie called, like a film, like a parachute, where the fee might have been 200, 250k we are immersed in that specific film for a long period of time. And it’s very tough to make another film at the same time. So we need to be very vigilant in the films that we actually pick to produce and make sure that we’re earning, hopefully, closer to the $2 million or so figure. I know it’s a little bit, I don’t know the right word to say, but it’s, it’s a strong number of what the budget is called a $10 million film. It’s a 20% fee. You know, the only way that you can really do that is if you don’t have partners, and I think that we want to pick movies where they make sense commercially, where we can have full control, where our fee would not be reduced. But also so that that’s a part of it, making sure that it’s a specific film where we could take that kind of fee. But then also, you know, now we know, as a market, in my opinion, is is staying where it is there, and to speak to the market for a minute. I’m not in distribution myself, but obviously being in the business for a long time, I think that with all the mergers of streamers and studios such as MGM and Amazon and Showtime and Paramount, the need for content, I think has been less. Yes. So in picking content, they’re picking movies that are more studio like to compete with those films. So I think that if we’re spending time and money and energy on bigger budgeted films, called 10 million than above, that’s the hope. With a level or so actors in the lead, those films make sense. A lot of films that we used to produce had those a level names and supporting roles for around 20 min or so with any random name as the lead as example, take our movie crypto that had Kurt Russell big name, but he was in the film for 20 minutes, right? The lead was bone app, that film at the time panned out. Nowadays, we tried to make a movie with Jesse with we had Clive Owen, and the lead was as well. Bone app, it didn’t make sense. We could not sell that film, because those movies don’t exist anymore, so we have to be very vigilant about what we pick.

Transcript 5:

Jordan Beckerman:
Yeah, and I think that those 50 movies, even though we’re in the situation, you know, we do have like we have we’ve built up over the last seven years. And Jordan did this for years before that, you know, even though we’re in this situation, we have pretty good reach, like we, you know, have made a lot of movies that have, you know, that have broken out to some extent, you know, I think that our, you know, kind of ability to put new movies together, as difficult as this situation is, all of those years that we’ve, you know, put time in, has kind of given us the opportunities that we have in front of us. And so, you know, it would be a shame for a lot of reasons to not be able to do that. But I do feel like, you know, our ability to put movies together in this way with whatever you know oversight is involved, is actually as good as it’s ever been.

Jordan Levine:
Well, that’s an interesting point, I think that you know, take, for example, the David and Covey movie, and that’s a film that we expected to make its money back, and, you know, much more, but variety called it David and coveney’s best performance of its career. It’s still premiered at Tribeca Brittany Snow’s movie parachute premiered at South by Southwest. She won an award for Best Director. Another our actress won Best Actress at the festival as well. So, you know, I think that we have gained a lot of respect and and great reputation in the business, even though, and it sucks, obviously, we rather be the other way around, where we earned a lot of money and the films were just okay, but we’ve made good movies that have given us certain clout, and I think, to be a certain caliber in the business. So we are getting the opportunities, one of the first films that we plan to make, if this all goes well. So Clark Duke, who’s an actor, also writer, director, he did our movie Stranglehold this past summer. He is a new film that would star as an action thriller, Liam Hemsworth and hopefully Jon Hamm. That’s a very good example of what we’re talking about. It’s around a $10 million movie. Your lead is Liam Hemsworth, so he’s already built in value there. Then you have Jon Hamm with him, another guy with good, conventional value. So those are the movies that we would focus on.

Matt Newman:
So question, cuz it’s clear you guys have great ideas. You’ve made movies that have been successful in the past, right? I think, I think someone had said it earlier. It’s about the controls and the process now, to make sure that, as you if you guys do go off and have a round two here, that the train stays on the rails, things get executed. There’s fiscal responsibility, fiscal control. There’s reporting back to the investors so they know that, you know, you guys are making progress on the debt. You’re knocking down the debt, you’re and you’re managing things appropriate. How do the controls work? I mean, this is a clay question, which was, is there a management company you guys would bring in to run this while and that that spins the Jordans off to kind of do their thing on movies, and then you’re, you’re kind of running the show from a control perspective. How does that work?

Clay Pecorin:
I haven’t gotten there yet. I think that so. I have a company of a number of folks that that produce movies, finance movies, and oversee movies. I think that we can allocate some time to that, but I think this is going to be a collective effort. I think the first and first and very important hire would be a true line producer, someone who’s going to be on staff, because I think the deal protection mechanisms are on the films itself. Because what’s happened on a number of these films is they’ve been flipped, and we should never do a non union movie ever again. It the there have been overages that are massive, and that’s really a product of having the right people on the set. But yeah, I think that there’s a there’s a management company that has to be put into place, and there’s a. A there’s a a board that has to oversee what’s being going what’s going on, because, you know, based on what the past is, I wouldn’t want to take on the liability from a company basis of being the only person doing this, like there has to be controls with the number of people, you know, and most likely, it’s going to be made up of some of the people in this room.

Matt Newman:
Thanks.

Unnamed Speaker:
I’d like to know what the rep split has been between distribution and what yells, you know, since the beginning of 50, because the distribution is, yeah, from and you guys identified it. It’s just it needs to be dealt with. And it’s a different time. Distribution is not the same as it was, and it has to be viewed as such and kind of that’s got to be planned by distribution and how you’re going to do a cost effectively.

Jordan Beckerman:
Yeah. Well, I think that liked with the foreign sales side of it, which is what the idea was, with great escape. If you look at the two sort of biggest ways that movies that we have made have made other people money. I think distribution is by far the biggest way that that’s happened, where we’re putting in the work, we’re, you know, spending all the time, we’re taking all the risk, and then the distributor comes on board and makes millions of dollars after we’ve done all of it. And it’s something that, you know, we actually looked at doing a distribution company in was it 22
Jordan Levine:
right before the strikes happened, actually,

Jordan Beckerman:
and that sort of derailed that, that process. But it was absolutely the thing that we saw the verticals of the world and quivers who were making that kind of money that, you know, we felt like we needed to capture.

Jordan Levine:
It’s been quiver level 33 grindstone, many companies on that level. And I think that, you know, we have enough content that we produce ourselves to release in a year, but I think if we acquire third party pictures, which, you know, we’re always getting emails and calls from friends and colleagues that have films with no distribution, so I think there’s a lot that we can do there.

Jordan Beckerman:
So, I mean, this is two hours, and really, again, appreciate everybody’s time. I know it’s, it’s, it’s a lot. I don’t know what next steps should be. Maybe everybody, yeah,

Clay Pecorin:
I think everybody should take a bead, yeah, and come up with, you know, are they interested in participating in the new entity and working off of the $50 million number? And I think 10% is the number 5% call on now 10% the remain five is as needed. I think you’re going to find out who wants to play in that and who want doesn’t. But those decisions clearly have to be made fairly quickly. And again, if people want to do it, that’s great. I I can represent that. I will. And you know, everybody else has to make the decision for themselves to see if that makes sense for that. But I think, I think if, if everybody is open to that, I think you guys should reach out to Jordan by the Jordans by, you know, Monday or Tuesday, to come back with. Is this something you’re willing to participate in or not? I think we all need to decide very quickly. And again, I’ll go back to the fact that I think we’re all in the same boat, whether we want to paddle together or not, is that for everybody?

David Gilbert:
Can I? Can I ask you guys, obviously, in the industry, you know, perception is incredibly important. If we were to do this, would you sort of present it to the industry as the launch of a new entity or something? Because I’m more, I’m also, I suppose, thinking about how you how you spin it, but also, you know, potentially, there’s a world in which you can launch it in a way that actually can give you some wind in your sails and some momentum amongst distributors, streamers, studios, people like that. If there’s a way to position it, is that what you’re thinking or are you thinking about sort of just creating a new entity, and

Jordan Levine:
I like that idea. I mean, I think really clay the up to your expertise as what you think might be best.

Clay Pecorin:
I am the worst person I’ve been in the business 20 years. 99% of people don’t know who I am. I don’t I don’t do PR or press because I think most of it’s bullshit. That being said, I don’t disagree. You the the perception, you know this is going to get around people? Know, yeah, there’s a value in it. I just, I don’t know how to do that. I’ve never done it, so I can’t speak to that, right?

David Gilbert:
That’s my concern. Is that, like you have a whole room of people that are owed money, and I don’t know anybody else in this room. I don’t know what sort of industries people are in or what sort of walks of life people are in, but news does travel round, and you know you don’t want, I guess, you know the skills that you guys have. You know is those are those relationships, talent relationships, working with directors, distributors, people like that. You know, you don’t want to end up feeling in any way sort of tarnished, right? Because if we’re doing effectively, you guys are our asset. You know that needs to be monetized. So…

Jordan Levine:
I think we’re David, I think we’re open to to anything. I think that if we’re talking about a multi pronged approach where there includes distribution, there is possibly a sports division, as we mentioned before, and things of that nature. I mean, I think it could be a good rebranding, Scott. I’m not going to put you on the spot, but Scott, Scott’s very good with, uh, PR, I mean, I think it’s just a random idea that everybody can just think about it, but I don’t know. I mean, is it, does it make more sense to make this? I mean, Dave, is that what you’re saying like a new operation?

David Gilbert:
I’m assuming,for example, this new entity is not going to be Yale entertainment, right, for example. So with the ideas that you have, and potentially a slightly different business model, you know, is there a way, you know, existing investors in Yale entertainment back the Jordans to do X, Y and Z and all, very exciting yada yada yada. And maybe there’s a world in which the momentum from that helps to actually get one or two of the projects set up. Definitely gets you in the room with certain people. I

Jordan Levine:
mean, I like that idea. And, you know, I think that it’s a little ways away, but the heart family movie again, even, not to put you on the spot. But actually both David’s, David gilberry, David Gere, both know that world very well, and I think especially with the success of the iron claw and the fact that WWE has allowed us to use their wrestlers and rings and audiences, etcetera, it could be a nice movie.

Unnamed Speaker:
Yeah. David gear, um, I’ve talked extensively with the Jordans about the Heart Project pretty well integrated into the world of business of professional wrestling, and to your point on the merger with endeavor, there’s a lot happening in that space. To have a film that would be a front runner project, that would probably answer some of the things that the iron claw film for 824 didn’t would be prolific, and I think there would be a lot of interest and excitement, both critically and in looking for potential additional partners, especially down this way, part of part of this part of the State. I also represent a group of ocean crest ventures who have been involved with Yale entertainment in the last few months. I’ll leave it up to the Jordans to add on to that. But with that being said, it’s another avenue that I’m involved with with this company that would kind of are looking at Yale entertainment in sort of the same capacity that Metropolitan has, and that’s been a conversation of $5 million and so on. So a lot happening, and I think kicking it off with projects that exemplify the direction of impossible rebranding is very important.

Jordan Beckerman:
Yeah. And also, also say that, you know, while we do this, which is what we know how to do, I think you know the there are other areas that we can and should be exploring, like turning our films into television shows and developing, you know, the IP and exploring, you know, other things that are ancillary to what we’ve done, but are still, you know, potential, you know revenue streams that you know because of what we’ve done in the business and and our positioning. You know, documentaries, short form content. You know, reality TV. I mean, I don’t for us, it’s about what you know, makes sense. And actually, David was just speaking. He has a studio, and he has an ability to help on, you know, some of those fronts. And I’m just going to put this, you know, out to the group. And we don’t need an answer right now, but I think we’re open to different, you know, ideas, you know, not just from the fine. Standpoint. But you know, if there are opportunities for us to, you know, explore, you know, television, through a contact that you know somebody may have, or IP that you know somebody has access to, I think that, again, the whole idea behind all of this is, you know, we’ve been operating Jordan and I as best as we can, but we’re at a point where we need everybody, everybody to help, and we need it to become much more of a collaboration. We’re not going anywhere, and we’re 100% committed to trying to solve this and bust our asses to make that happen. But if anybody has any ideas, you know we’re we are very open to that, and we’re around all the time. So want to put that out there too. It’s not just film. I think, again, we’ve already started exploring television, but, you know, new media, social social media, I think there’s more out there. Podcasts. I mean, there’s a lot of things that, you know, we have great talent relationships, we have other great relationships. But you know, I think that, you know, we are willing to get creative in terms of how to how to do this.

David Gilbert:
I’d love to know whether there’s any of your 50 movies that could be adapted into musicals or plays. I mean, obviously we control, you know, one of the biggest theater companies out there. So, yeah, it’s whether you can look at things like that as well. Maybe Becky, for example, could be some weird little cult music we produce heavens. You know, we’ve got heavens. It’s pretty dark. So, yeah,

Sparsh Mehta:
there’s so many good ideas here. Is there a conversation to be had to kind of clean up the balance sheet so new capital to kind of fund these great ideas is more tenable for said investors, maybe debt to equity swaps for some people, I know you were talking about pausing all kind of like interest payments and forgiving, kind of like past amounts of debt that are kind of owed. Are you having those conversations on a creditor basis? You have kind of like an up to date list of those conversations?

Jordan Beckerman:
I mean, I think the question was, we had conversations with individual creditors about a debt for equity swap in the company. And the answer is, No, we haven’t really, you know, discussed that with any sort of specificity. I think people have brought it up to us as an option, but I think that that would have to be kind of a collective decision. And we haven’t. We haven’t really, I mean, this is really the first of these types of conversations that we’ve had. And so, you know, we’ve had individual conversations with with different investors, creditors, about what the situation is, but we haven’t discussed any sort of equitization of of outstanding debt. And I don’t know if that’s I mean, obviously everyone was free to chime into that. I feel like the goal for everybody is to get their money back as quickly as possible, and that’s our goal as well. So I don’t know that that is something that people are open to. I think certainly Jordan and I are open to that.

David Gilbert:
I don’t think that works unless you had the majority of the 50 million bucks converted to equity.

Clay Pecorin:
Yeah, you need everybody.

David Gilbert:
You can’t do it because otherwise somebody does it and then somebody else pushes a litigation button and your equity is worthless. Yeah, yeah, it’s no sense. Yeah.

Unnamed Speaker:
Everyone is, you know, isn’t on it, and depending on what percentage of the company, the collective predators and the owning and in theory, the Jordans, you know, have something like 94 95% equity of the company. So it’s like, if this whole thing about this second entity is designed to pay off the existing debt, like there’s a wall in which Jordans owns 5% of the company in a creditor zone, 95% of the company pay it off, and then they’re free to go start their own separate company after a certain sunset clause on that once the debts over all the perspective

Clay Pecorin:
I don’t want to own equity in their payment. Their favor, in that new business or in the old business. I don’t want to even all sorts of liability issues on the
but again, it’s not, I’m not saying that others don’t. I’m just saying I don’t want to make it. Yeah.

Unnamed Speaker:
Separate question, if you get in $200,000 on a tax proceeds, or that’s going to go to MCA, to be pragmatic, right now, right? You’re not giving that back to the investor right now, no.

Jordan Beckerman:
if it’s from a film, you’re saying, No, that goes to the investors on the film. So it does, yeah,

Jordan Levine:
the MCA situation, I think we’re going to deal with tonight, tomorrow. We’ve already started those conversations

Unnamed Speaker:
Just being pragmatic about, you know, because all of us have different deal structures, right stations. You know

Jordan Beckerman:
it is, it is a high priority thing, and we don’t really know what happens when we don’t, you know, when we don’t service on, service it

Clay Pecorin:
I think that MCA, you need to have start having conversations. I know you already, yeah, with here’s your balance. If you know, I think the the reality is, is you’re going to find out the next five or six days who wants to participate, and understanding that 200 grand or 250 or whatever, the 300 grand is going to pay off these MCAS to get them off your back, because they will, I think they’re the hardest folks. Yes, from a chasing basis
Jordan Levine:
baseball bat.

Clay Pecorin:
I think they just want their money back. Yeah, I don’t think they’re in the bid. Listen, they make 50% interest, right? Like, if you make 50% interest loans, you’re assuming that a good portion of them blow up, correct? Because that kills the most. Yeah, exactly. Okay.

Jordan Levine:
Anybody else have any questions? I

David Gilbert:
don’t know if this is a question or a comment or just a sort of blurting out a thought, if you don’t mind, but I sort of mentioned before. I don’t know anybody else who’s in this room, other than the Jordans, and I don’t know who does what and who everybody is, but I guess I’m wondering, you know, we talked about everybody, sort of if, if we do this for sort of 2.0 everybody kicking in, you know, a sort of pro rata, equivalent percentage of capital. And effectively the sort of creditor group in that point are contributing capital. But I guess it’s just interesting for me to think about whether, in the creditor group, there are people within this group that actually could contribute more than capital. I guess the question I’m asking is like, I don’t know who else within this credit group is within any industries of the various verticals that you guys are going to be playing in. Do you mean, are we talking about as a group just contributing some money and then you guys go off and do your thing, or are there people who actually sort of work within this industry, you know, you talked about a board and and doing that. Are there people in here that can open doors, create new relationships, help these guys to to go even further and to realize it, and maybe turn this new venture into something that actually could be valuable? That’s what I’m curious about. I don’t know who everybody is and whether there’s potentially an opportunity in all of it, I’m trying to, I suppose, be pragmatic, but also look at a potential positive in a situation.

Jordan Beckerman:
Patty P who has a post production facility and an agency that’s here in New York. So he said he’s willing to lend the resources of that to help

David Gilbert:
talent agency?

Jordan Beckerman:
No, not talent agency

Jordan Levine:
post production and production, yeah

David Gilbert:
and Clay or production finances?

Clay Pecorin:
Yeah, we have investments across the entertainment and economy. So we have investments in in production companies. We have product investments in in sales companies. We have investments in distribution companies, and we finance films. I mean, I think I probably 4550 movies, but, yeah, I mean, I think depending on the size of the film that we’re talking about, I’m an investor in a company called infrared, which is Glenn Basner, new business. From which is more commercial ended. And so I think that that’s a value proposition as well, that can be extended. And, you know, I’m, I’m one of the original supporters of Glenn for many years. So I think there’s value in that as well.

Peter:
This is Peter. I would say, you know, I spoke with the burden about this quite a few times as an investment banker, there are ways in which you can leverage investment capital, in which you know, you’re mitigating risk by earning interest on money you know, which you have the ability to, you know, use institutional money instead of taking money, putting it into an account and operating out of that specific account. You know, you’re talking, you know, 456, 7% you know, on your money. And I think that if there’s a smaller mousetrap that can be created within this new code, any way that we can look at mitigating the cost of interest and the cost of capital, you know, that’s something that I offered to Jordan as a banker.

Russen:
My question was just going back to the recoupment. It was suggested that everyone who is owed money via the corporate loans would recoup prior to pursue it would seem more fair or logical that it’s people are recouping in order of when their loans became due. So that’s my question. Why wouldn’t loan be repaid in order of the maturity dates?

Clay Pecorin:
I don’t think anyways, just because you made a loan three years ago doesn’t mean that you’re in a different position than someone who made a loan six months ago. I think again, everybody has to agree to it. I understand your point, but I also don’t understand. I actually don’t know how you figure that out, because the guy that or the or the woman that gave a $3 million loan a million a year ago, even now, disincentivize them for participating in this new business. I’m going to be the last to get paid. I’m not putting money in this new business. Forget it.

Unnamed Speaker (woman voice):
No, I think there’s also an element. If you compare this vote paying to a bankruptcy, the bankruptcy trustee just looks at what is everybody owed, and they get paid cents, a little or and it doesn’t matter how long they’ve been owed this money. So I don’t think it makes sense to kind of make a difference, because then you’re prefer, you’re preferring some creditors over others. So and then, to your point, to just going to invest in it, not everybody will

Unnamed Speaker:
Which to your point, that’s why we need to keep this energy active, because we need to prolong these government possible. That’s their problems. I’m speaking that’s why you need to prolong these government laws with a low interest rate as long as possible, so you can pay off the creditors or debtors. We’re going to want to call ourselves a collective group, the creditors.
Do the creditors. Okay? Yeah.
So, so that’s why we have to operate that matter.

Sparsh Mehta:
Probably not a conversation that you guys want to have. But have you talked to creditors
that are willing to take a write down, you know, a write down

Unnamed Speaker:
Does that help? Though? Might take a 30% haircut. I don’t think that helps you at all. You guys need capital right now to do what you do. I’m hearing it, right? Yes, yeah, good people Bob, awesome. The other creditors, those work while you have I’m in your room, that people are able, right?

David:
I’m in your room.

Unnamed Speaker:
guys are open to that, right? Somebody wants to buy down some of the course, yes. And so it’s between inter party. I think that I White House

Brian Stewart Unger:
it’s a little hard to hear what you guys are seeing in the room. This is Brian Unger. Can you just repeat that about last minute conversation, please?

Jordan Beckerman:
Yeah. So Pat brought up an opportunity. I’m not even sure I totally understand this, but if somebody is looking to get a write off for this year, could they potentially buy out somebody else’s debt? It doesn’t change our approach, but in terms of sort of helping amongst different creditors, you know, that would have to be sort of a side, you know, kind of conversation, I guess, between, between those individuals. But obviously we’re not opposed to doing anything like that. If it’s helpful, what was the last I’m forgetting the last thing? Yeah, so, so how are we dealing with this from a confidentiality standpoint? Obviously, you know, our preference is everybody keeps us, as you know, extremely confidential. You know, part of our ability to, you know, execute on this is going to be Jordan and my, you know, ability to go out and make and so, you know, we would very much appreciate if, if this conversation was kept, you know, confidential that being said. I mean in terms of sharing, you know, names, the debt schedule and things like that. I don’t, I don’t know how we manage that, but maybe there’s an NDA that everybody can can sign that allows us to have this internal conversation, internally to facilitate whatever, you know, additional conversations that need to happen. Maybe that’s the way it gets done.

Transcript 6:

Unnamed Speaker:
When you guys, we talked about this last week, I’m in the process of bringing in some investors that are interested, but I put it on pause in order to kind of gain knowledge from this meeting clay. What would you say the protocols are placed to be new, new investors coming in on company debt moving forward in this new proposition? Well,

Clay Pecorin:
Well, I think that we should be able to capitalize this business from the people in the room. From the debt perspective, money’s going to be valuable on the equity side for investing on a per film basis. That’s where the Okay, yeah, I think that’s where the value is.

Unnamed Speaker:
don’t you want to own a piece of the equity of beetle entertainment, though? That’s what wouldn’t it be? The 50/50, just like you were talking about metropolitan No, I’m asking, yeah, I want you in the I’m just being on the I want you to be a part owner, unless you guys tell me I’m bullish in this. But I want you to do the 5050, so part of it goes to death hit a little bit, so you get all these bad actors out, and then you can get back to doing business. And if you guys bring some value in my wrong play.

Clay Pecorin:
I mean, I think it’s up to that individual again. I think investing into the current business is a very bad idea. I do. I think it is. I think the problem is, is, if people want to invest in the current state of the business, you you a potentially putting yourself in some liability, number one, and number two, I think there’s better value in investing in in new stuff going forward, which is really going to be a value to pay down this business. I don’t think anybody’s going to come in and say, here’s $5 million pay down debt with it. I would love that. I mean, that’s the dream scenario. I just don’t know why someone would do that. I’m just being realistic. I mean, that’s my dream. Someone comes in gives $50 million dollars to buy their business. I think everybody in this room be jumping up and down. But why do you do that?
That’s I realistically, I don’t know why you do that.

Unnamed Speaker:
You were saying people based on money coming into films, if you were growing revenue, we know are generating revenue, and who those stakeholders are? Those, the ones that have maybe a position that has value bought out. That makes sense?

Jordan Beckerman:
Yeah, so, so basically, you’re saying, like, if somebody is invested into a specific film, is there an opportunity for somebody to acquire all the rights to that film as part of, like a library deal, to take out that specific investor?
Yeah, right, yeah. I mean, I think that’s the question is, who’s the buyer of those rights? But I’m sure everybody who has invested into a film that hasn’t been repaid would love for that to happen. And I think maybe that’s part of the library conversation is, what does that look like, and if they want to acquire 100% of all of these films, and that, you know, I don’t know this, but maybe that money goes towards those investors positions in those films, with which, which helps Yale, because it takes that number out of the 47 but it also helps those investors get out, because they do have the right to that, because they invested into a specific film. So I think as we have these library conversations that may. The part of it is, what can we allocate to each individual film.
Anybody else?

Unnamed Speaker (woman voice):
Matt Newman was just asking for outlining the structure for the new coat. Yeah. And then Michael wants to know about how we keep track of streamers paying what’s truly owed.

Jordan Beckerman:
this streamers. So we deal with individual distributors, so it’s really their job to manage the streamers. If we do this new distribution coming up, realize what the question was, how do you manage the different, you know, revenue streams that are coming in, but

Clay Pecorin:
that’s sort of the black box, right? So distributors have collection mechanisms with ancillaries, so that that means they’ve got a collection agreement with Amazon. They have a collection agreement with Apple. They have a collection agreement with your cable system. And so you will see, you will see statements as to where those monies come in and when they come in. There’s generally a a lag. It’s generally three months from revenue stream. It’s quarterly, and then it’s 45 days after receipt. So if you got $1 in December, most likely, you’re not going to see that dollar until April 15. On a lot of these things, I think we can do a little bit better on that, because there’s certain payers that pay, you know, more quickly than that, and most distribution companies take a take advantage of the float, especially now with the interest rates, but I think, you know, we’ll probably do a little bit better than that. But ultimately, it’s the distributor who is collecting from all these entities.

Jordan Levine:
We do have seven movies or so now, I mean, including the five from the horse slate that we can utilize with a new distribution company. Right away. I honest with Maria bakalova that we have the horror slate. So I think that we could put this plan into motion pretty quickly. It’s good if you can do what you have lined up. Sure, yeah, we can pull up our deck really quick.
All right, most of these pictures were taken by Jesse. (presentation is shown).
Yes. So these are movies that came out somewhat recently. These are movies that are in post production to be released soon. And the two that I just mentioned, with Alicia Silverstone is pretty thing, and then electro with Maria Bakalova, those are two that we could run through. The new distribution company, Baron’s Cove already has a deal. Same with fog of war. You can move on from there. Midnight is a film we finished this summer. Same thing with Stranglehold. And then lone wolf is a movie that’s shooting starting next week that we mentioned before. This is a film where we have too many partners, and the fee is not anything near what we need to do on the new company. And then here’s the films that are in development. So a throwdown movie that I mentioned that Clark Duke would direct. Approximate budget of 10, approximate producer fee of two. Liam Hemsworth, John Hamm, were similar.
“Chick Fight 2”. This is something that we have to pay the writer director to get started. But $10,000 are really not much compared to WGA. I A dream box movie that Jesse would direct, that Jesse and David have already prepped we would go for someone like a Gerard Butler, opposed to Clive Owen, worst dinner ever. This is a movie that our friends who directed, Becky would direct Sam Richardson’s attached Wesley Snipes has been attached, but we’ve had conversations with possibly Halle Berry or Jamie Foxx instead of Wesley Snipes, Death Market, Ryan Philippe film I.
Uh, Untitled Anna Faris movie we she unfortunately just lost her house in the fires, but this is a project that we’ve been talking to her company about for some time. It would star her and someone like a Dave Bautista. Diamond eye is the same producer who brought us the Bryan Cranston movie, movie that we would do hypothetically this summer. Mommy Jane dies, Lily Jane, this is, this is, would you describe this?

Jordan Beckerman:
This is a, it’s, I mean, really the value is in the lead. So, you know, Lily James doesn’t do these types of movies. And it’s a really eclectic, multi genre Adventure, Western boxing is actually what it is, but it’s, you know, for us, I think that we have to be focusing on are movies that are, you know, somewhat passion projects for these lead actors, because otherwise, you know, they’re not doing independent movies. Lily James does huge studio films. And so this is something that, you know, the the director Otto is, is, you know, pre acclaimed. He’s done a lot of TV work, but, you know, he has the direct ability to attract talent like like this, yeah.

Jordan Levine:
Otto directed the last Robin Hood film with Taryn Edgerton. He has a series on peacock now with Colin Firth. Can move on to the next one? So hard, family story we discussed before. I mean, we’ve had going back to that for a second. I mean, all these actors such as Paul Walter Hauser, who won the globe last year, big, big fan of wrestling, has contacted us about being part of the movie. So I don’t think we’ll have a hard time getting cast on that. Don’t shoot the piano player. This is with Chris Rock. He’s been attached to this for some time. Paul is one of the two writers on the film. Temperance was brought to us. William H Macy is our producing partner, besides co starring in the film, this is the 50 Cent horror slate that we discussed before he actually just bought a studio in Shreveport, Louisiana, that he would like to shoot all the movies at, um, he also has mentioned that he would contribute financing, which I think is a pretty big and uncommon thing by actors in the business.

Jordan Beckerman:
I think also the value that he brings is his, I don’t know what they said, 50 million, you know, Instagram, Twitter subscribers, and, you know, with horror films, or to make them for a price like they really can perform. And so for us, obviously, the trick there is making sure that we’re picking, you know, the right types of horror films to put through this. But, you know, we haven’t worked out the exact details, but if it’s, you know, G Unit presents, he has a deal with Lionsgate. I mean, there’s a lot of opportunity with that. And you know, he’s a super high priority client for our agents at IAG, and we’ve, you know, been on zooms with him, and it’s a real thing. And he’s actually followed up with us to get into it. So he’s excited about it. And I think that’s, you know, that’s the important part of that one.

Jordan Levine:
So this is just other ideas. I mean, again, we’re open to all collaboration. I have not run this by her, but as an example, a friend like a Brittany snow could have her own podcast. Again, have not run a buyer, but you know, just people that are in our circle. I think a lot of this is built on the relationships that we have built up over the last 1015, 20 years. So it’s an idea. These are just previous movies, festival films. That’s it. So slate of upcoming movies. So I think to the question before regarding IP, there’s a lot in that, and it’s really only scratching the surface, I would say, of the projects that we have available to us.
We actually, I’ll say one more thing. So in working on the film midnight that Russ brought us, we did form a very good relationship with Rosario Dawson and her partner. And David, to your question before David Gilberry, she does have a musical that she does want to make kind of soon. She’s tied up on that Disney show for some time, but she’s attached to it, and then there’s a few more actors circling it. I know she’s speaking with Idris, Elba, Jamie Fox, Anthony Ramos, so musical idea. Yeah. Alright. Anybody else has any other questions?

Unnamed Speaker (woman voice):
No more questions in the chat. So Okay. Well, obviously, we’re alright, guys.

David Gilbert:
Can I just ask one more?
Just what happened to the what happened to the Katie Holmes Lafayette relationship?

Jordan Levine:
Yeah, good question. So we did two movies. We’ll let Jesse answer that one. No, I’m kidding, but we did two movies with Katie, and the first one was a decent movie alone together. Second movie, I personally enjoy the script a lot rare objects, but ultimately, the movie was about rare antiques, and it didn’t necessarily perform. And since then, the conversations we’ve had with her have been about movies that really are more artistic and are, you know, nice, creative ideas, but in our opinion, just don’t make sense commercially. I think that the next film she wanted us to produce was a drama just with her and Alan Cumming, which probably would have been a nice movie, but for $6 million I think it wouldn’t have made sense whatsoever. So we always envision that company to be somewhat of a Reese Witherspoon. Hello, sunshine. That was the idea going into it. But ultimately she’s more focused on creative, artistic ideas, which I think there could be a time and place for that, but in the sense of making this money back and progressing, it’s the wrong partner.

David Gilbert:
It was the just science. And was that, was that like a new CO that Yale invested in? Do you guys have a stake in that company? Or?

Jordan Levine:
no, it was really just a name. We never opened up an actual LLC for it, but it was Jordan, Jordan Jesse and Katie. And I think it just kind of lost steam as we were not agreeing on the types of movies to produce.

David Gilbert:
Alright, so Lafayette pictures isn’t any kind of an asset or anything.

Jordan Levine:
No, no

David Gilbert:
Alright, thank you.

Jordan Levine:
I think we could copy that formula and have another label within Yale, like we’re talking about sports and faith based and etc, where we could technically partner up with anyone, a Clark Duke or Brittany snow, whoever. And you know, if that does make sense.

David Gilbert:
I think if you guys went down faith based thing, I don’t know, but my hunch is, I think you’d probably need to bring in some kind of faith based producer on deal with a label who has those relationships with the companies, the distributors that do that, and then you could get something. Because if you could, if you could pair one of those people with your talent relationships, I think you could do something, that’s, I mean,

Jordan Beckerman:
I mean, basically exactly the conversation we had with one group, and they brought us a few projects. But one of them that you know sort of stood out is a horror film that’s based on a biblical story. So it’s a story that’s in the New Testament of of demonic possession, and it’s, I don’t know that it’s ever sort of been done before, but they came to us exactly for that reason. They said, like, we know this world, but you guys have your own set of discussions and things like that and like that, to us, sounds really exciting. And I think there’s other sort of more down the middle, opportunities, you know, in that world as well that we want to explore. I mean, there the movie that just came out. It was, I think, called best, best Christmas Pageant Ever, something like that. It had, I mean, Pete Holmes, I think, was the biggest star in that film. And it did, I think 20, $25 million at the box office. And I think that there’s just a huge audience for that around the world, that, you know, that’s looking for that kind of content. And so, you know, for us, I think we have to be, you know, cognizant of market trends and world trends and, you know, and adjust and pivot based on that and

David Gilbert:
Yeah, I don’t know if it’s, I don’t know if it’s around the world, but certainly in middle America, I think you get a huge amount of box office Saturday

Jordan Beckerman:
Yeah.

Unnamed Speaker:
But what? Jordan, that’s where. And maybe this question for David, how do you monetize that? How do you structure that LLC, or that business? Like you said, Lafayette was not a real entity. How is, let’s say, faith based, Yale LLC? How do you monetize that? How you bring that money in and you sell this? Frankly, I think it’s an opportunity to sell a portion of your business, or at least license, yeah, funnel that money back, pay down some of this debt.

Jordan Beckerman:
I think, Geez, I think that like we’re doing with the 50 Cent horror film, yeah, I think that there’s a way where, if you develop four to five projects. X to start, and maybe it’s one to start, but you put that into a separate entity, and then we figure out how to monetize that entity, knowing we’re going to be making producer fees, which is going to, you know, paying this down. But the investment, again, is directly related to these types of films, and we have some relationships with different types of, you know, people who might be interested in that. And, you know, and obviously, first call is probably everybody in this room to see, you know, what that looks like. But, you know, we have some relationships with some NBA players and people like that, who I think could be really interested in, either the sports or the faith based, or both. I think there’s some crossovers.

Unnamed Speaker:
Trying to think about, how’s that turn into an influx of cash? I’m still missing that. I mean, how do you create a new entity? There’s an influx of cash. Portion of it goes to the new entity, but a portion should go back to the Yale entertainment,

Jordan Beckerman:
Right, I think, myself that in reality, but I think it has to be producer fees. I think that’s the way. So we don’t want to just take people’s money and then give it to Yale. We want to make the thing we’re setting out to make. And I think the for those services, which is development, you know, production, and then ultimately overseeing distribution. You know, we are entitled to, and have always received producer fees. I think that’s how we do that. And if we can capitalize that on a on a significant scale, and I do think there’s an opportunity to do that, that I think will help jump start. You know, the repayment and getting the assembly done

Unnamed Speaker:
also in success, the production team receives back success.
And that by the way, just generally, does not happen in smaller films. It happens in the 10,
eight to 20 for the back end, sort of is so there’s an opportunity there as well.

Jordan Beckerman:
All right, all right, guys.

Jordan Levine:
All right. We appreciate everybody attending. Anybody has any other questions,

Jordan Beckerman:
yeah, obviously we’re around beyond this, this meeting. I’m sure everyone needs to sit and think of, you know, think about all this stuff, but, you know, we are 100% committed to, you know, getting this fixed as soon as we possibly can. And again, really, really do appreciate everyone’s time and focus and energy here. So, yeah, just, just, thank you everybody. Thank you everybody who’s here and made the journey really appreciate it. Thank you everybody. You.