LEGAL NOTICE, RISK DISCLOSURE & INVESTOR PAYBACK TERMS
Film Bite, Inc.
1332 Hermosa Avenue, Suite 14
Hermosa Beach, CA 90254
1. General Notice
This document has been prepared by Film Bite, Inc. (the “Company”) for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities except as may be set forth in the Fund’s formal offering documents, including its Private Placement Memorandum (“PPM”), Operating Agreement, and Subscription Agreement.
Any investment in the Company may only be made pursuant to such definitive documents and in accordance with applicable securities laws. This document is qualified in its entirety by reference to those materials.
2. Nature of Investments
The Fund invests in film, television, sports, and media-related projects, assets, and ventures. These investments are speculative, illiquid, and subject to a high degree of risk. Revenue generation in these sectors is often uncertain, delayed, and dependent on numerous external factors including market demand, distribution success, audience reception, talent performance, and broader economic conditions.
3. Risk Disclosure
By investing in the Fund, each investor acknowledges, understands, and accepts the following risks, among others:
(a) Loss of Capital
An investment in the Fund involves a high degree of risk, including the possible loss of the investor’s entire investment.
(b) Illiquidity
Interests in the Fund are illiquid and subject to restrictions on transfer. There is no public market for such interests, and none is expected to develop.
(c) Unpredictable Revenue Streams
Film, sports, and media investments often produce irregular and non-linear cash flows, with revenues dependent on distribution cycles, licensing arrangements, and performance outcomes.
(d) Market and Industry Risk
The entertainment and sports industries are highly competitive and subject to rapid changes in consumer preferences, technological disruption, and evolving distribution models.
(e) Project-Specific Risk
Individual projects may fail to achieve commercial success due to creative, operational, financial, or market-related factors.
(f) Key Personnel Risk
The success of the Fund may depend on the continued involvement of its management and key creative and business partners.
(g) Regulatory and Legal Risk
The Fund and its investments are subject to applicable laws and regulations, including securities laws, intellectual property laws, and industry-specific regulations.
4. Investor Payback Terms
4.1 Distribution Policy
Film Bite, Inc. intends to make annual cash distributions to its investors, subject to the availability of distributable proceeds from the Company’s investments in vertical projects in the following areas: funds will be utilized to develop, secure, and produce, distribute and or market vertical films, feature films, television, web series, streaming, podcasts, music, concert tours, comedy tours, albums, soundtracks, music festivals, film festivals, sponsorships, joint ventures, virtual reality, augmented reality, AI-produced content, FAST channels, streaming channels, books, publishing, animation, motion picture development, motion picture production, motion picture distribution, motion picture marketing and advertising, content for OTT platforms, the acquisition of broadcast stations, including television, radio, digital, and OTA stations, the acquisitions of broadcast and streaming rights to sporting events, the productions of sports events and or any sports content, the purchase, wholly or in part, of professional and or amateur sports franchises or leagues, company overhead, and any related expenses, real estate, and any technology not listed above, including advancements and discoveries yet to be invented.
Distributions, if any, will be made from net revenues, including but not limited to:
- Production and distribution proceeds
- Licensing and syndication revenues
- Sponsorship and endorsement income
- Equity sale or disposition of assets
- Ancillary and derivative revenue streams
All distributions shall be made pro rata in accordance with each investor’s ownership interest in the Company, unless otherwise specified in the Company’s governing documents.
4.2 Discretionary Interim Distributions
Notwithstanding the foregoing, the Company reserves the right, in its sole and absolute discretion, to make semi-annual or quarterly distributions to investors.
Such interim distributions may be issued when:
- Sufficient liquidity exists
- Revenue events occur (e.g., project sales, licensing deals, exits)
- The Company determines that earlier distribution is prudent and in the best interest of investors
The timing, amount, and frequency of all distributions shall be determined exclusively by the Fund’s management.
4.3 Reporting to Investors
The Company will provide investors with annual progress reports, which will include, where applicable:
- Portfolio performance updates
- Status of film, sports, and media projects
- Revenue summaries and distribution breakdowns
- Market and industry insights
- Forward-looking strategy updates
The Company reserves the right, at its sole discretion, to provide semi-annual or quarterly reports in lieu of or in addition to annual reports.
4.4 No Guaranteed Returns
Investors acknowledge that:
- Distributions are not guaranteed
- Payment timing is dependent on the performance and liquidity of underlying investments
- Film, sports, and media investments are inherently speculative, with uneven cash flow cycles and uncertain revenue timing
The Company shall have no obligation to make distributions except from legally available funds and at its discretion.
4.5 Reinvestment Rights
The Company reserves the right to:
- Retain and reinvest proceeds for portfolio growth
- Allocate capital toward follow-on investments or new opportunities
- Delay distributions if deemed beneficial to maximize long-term investor returns
4.6 Tax Considerations
Investors are responsible for their own tax liabilities arising from Fund distributions. The Company will provide appropriate tax documentation (including Schedule K-1) annually, in accordance with applicable laws.
4.7 Limitations and Discretion
All decisions regarding:
- Timing of distributions
- Amount of distributions
- Retention vs. payout of proceeds
shall be made by the Company in its sole and absolute discretion, consistent with its fiduciary duties and governing documents.
5. Indemnification and Limitation of Liability
To the fullest extent permitted by law, the Company, its managers, members, officers, employees, agents, and affiliates shall not be liable to any investor for any loss, damage, or claim arising out of or relating to:
- Investment performance or lack thereof
- Market conditions or industry downturns
- Failure of any underlying investment or project
- Actions taken in good faith within the scope of authority
Each investor agrees to indemnify, defend, and hold harmless the Company and its affiliates from and against any and all claims, liabilities, damages, losses, costs, and expenses (including legal fees) arising out of:
- The investor’s breach of representations or agreements
- The investor’s actions related to the Fund
- Any third-party claims arising from the investor’s conduct
This indemnification shall survive the termination of the investor’s interest in the Company.
6. No Fiduciary Duty Beyond Governing Documents
Except as expressly set forth in the Company’s Operating Agreement or required by applicable law, the Fund and its management shall not owe any fiduciary duties to investors, and any such duties may be limited or modified therein.
7. Forward-Looking Statements
This document may contain forward-looking statements, projections, and expectations. Such statements are inherently uncertain and subject to change. Actual results may differ materially.
8. Amendments
The Company reserves the right to amend, modify, or supplement this document at any time, subject to applicable law and the terms of its governing agreements.
9. Governing Law
This document shall be governed by and construed in accordance with the laws of the State of California.
10. Acceptance
By investing in Film Bite, Inc., each investor acknowledges that they have read, understood, and agreed to the terms set forth herein, including all risks, limitations, and conditions.