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Re: Handyman4545 post# 8

Saturday, 08/19/2017 2:23:12 PM

Saturday, August 19, 2017 2:23:12 PM

Post# of 38
INVITATION ACCEPTED! Sorry that it's taken us so long to respond, but TBH I didn't realize this forum existed until one of our investors pointed it out to us. I'd like to go through and respond to some of the earlier and later posts, but this seemed as good a place as any to start.

First, to introduce myself, my name is Jeff Annison, and I'm one of the cofounders (along with Paul Scanlan) of Legion M. We also cofounded another company (with one other cofounder) back in 1999 called MobiTV. That company started with 3 guys working out of spare room and turned into a global leader of mobile television. We raised over 100MM in venture capital, and in 2005 won an Emmy for innovation in Television. I know we're not talking about MobiTV here--I just bring it up as a way to demonstrate that we aren't first-time entrepreneurs here.

I'd like to provide a two part answer to your question about how we make profit at Legion M.

PART 1. How do we make money?

We make money using well established business models for entertainment content. Some examples:

-We can invest in existing film, TV, and VR projects. This is what we've already done with Colossal (where we invested in P&A after the film was already completed) and Field Guide to Evil (where we invested up front in production as executive producers). The spectrum of investment terms is extremely wide--from owning equity in the project to "last money in, first money out" financing. Our goal is to develop diversified slate, which you can already see from our first two projects. Being flexible allows us to be opportunistic and get involved in projects we love (more on that in part II).

-We can develop our own projects. A great example of this is our ICONS VR Interview with Stan Lee and Kevin Smith. In this case, we conceived of the idea, signed Stan and Kevin, hired the VR studio, and shot a pilot. We own the footage outright. It's worth noting, that what we did with that project is groundbreaking--you can read more about it in this Fast Company article: https://www.fastcompany.com/3069267/with-icons-legion-m-is-creating-pop-culture-time-capsules-and-pushing-vrs-limits.

Icons is a long term investment--VR is a nascent industry today, but our footage was captured in a way designed stand the test of time. We want to give people 100 years from now the opportunity to sit face to face with an icon of our time. We believe the value of this footage will increase over time. One of the challenges we face is that no headset even exists today that can play the full quality of the footage we captured! Given that Stan is 95, it's quite possible this is the only footage of this type that ever exists. It's already the only footage of his wife. :( As I said, we view this as a long term investment.

In the case of ICONS, our goal ins't just to monetize the Stan Lee footage, but to turn it into a full series that allows people to sit down face to face with other luminaries of our time. Stephen Hawking, Paul McCartney, Warren Buffet, Mel Brooks, etc. We're very early in this process, but we have interest from distribution partners, sponsors, etc.

These are two great examples that illustrate the diversity we seek in our slate, both in terms of medium (film, TV, and VR), stage (early stage speculative vs. safer later stage), type (internal projects that require a lot of work on our part vs. more passive investments into other people's projects). I can elaborate more if you like, but hopefully this gets the point across.

Part II. Why does 1,000,000 fans matter.
The business models I describe above are used by thousands of studios/production companies in Hollywood. Anybody with money can come into Hollywood and try to make a fortune (or more often than not lose a fortune) doing this. In fact, Hollywood has a long and storied history of taking advantage of starry-eyed investors.

A lot of investors don't care--they are so excited about hanging out with stars and being a movie producer that they don't care about the ROI. Their's nothing inherently wrong with this, but it's really more akin to "buying" a once-in-a-lifetime experience rather than investing. I think a lot of Legion M investors fall into this category--especially those that have put in $100. The range of financial returns you're going to get on a $100 investment is de minimis compared to the joy you'll receive from being a part of something you love.

That said, while some of our investors may not care about a financial return, the same cannot be said of Paul and I. We care deeply. After all, we have FAR more invested in this venture than ANY of our investors. Paul went the first year without drawing any salary, an when we did start paying salaries, we're paying ourselves about HALF what we'd be making someplace else (more on this in another post). This means that we literally have hundreds of thousands of our own dollars at stake. Not to mention our jobs, careers, and reputations.

If you look at what we're doing, you'll see that while we work hard to make Legion M a fun investment (we call it Emotional ROI--meaning how much JOY you get from owning the stock), at it's core Legion M is a legitimate Facebook/Google/Tesla type swing for the fences that's being run by serious businesspeople with a track record of success. That's where the 1MM fans comes in.

Our power as a company comes from the fact that we're owned by fans. If Paul and I had come to town with a couple million $$, we would not have gotten us a seat at the table with Colossal. We wouldn't have gotten Stan Lee and Kevin Smith to do a VR shoot for no money (they were compensated with stock options). We wouldn't have received profiles on the front page of the business section of the LA Times, or made it in Variety Magazine, Nerdist, Fast Company, Forbes, or any of the hundreds of other press interviews we've done.

All of these things were made possible because we're owned by FANS. Not even that many fans yet--we had about 3K when all those deals were signed. Today we've got about double that, and it's growing fast every day. This is important, because our power grows exponentially based on the number of fans we have in the company.

To explain further, I ask you to check out the following post, that explains our master plan, and hopefully helps illustrate why 1MM fans isn't hype or BS. https://legionm.com/shareholder-updates/legion-ms-top-secret-plan

In any case sorry for the long winded response. As Mark Twain said, i'd make it shorter if I had more time. :). Please review the link I sent, and then I'd be happy to answer any other comments or questions you have. I also plan to comment on the other posts when I get a chance.

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