Rim Semiconductor Company (fka RSMI)

[WTMHouston]

<<but regardless, NVEI will receive the first 2.25 million of the gross to re-pay their initial investment, plus a percentage of every dollar the movie grosses.

Your statement is not true. Read the contract. NVEI's $2.25 million is second in line for distribution from funds received by the JV. There is NO agreement (at least not one that has been made public) for NVEI to get any percentage of the gross. Rather, according to the JV agreement, NVEI gets 50% of the net, as net is defined in the contract. The JV may get a percentage of the "gross," but that does not all flow through directly to NVEI. NVEI is not the joint venture (JV) making this movie -- they are only a part of it. From the contract:

<<DISTRIBUTION OF REVENUE:

16. REVENUE: In consideration of the services provided by the Parties pursuant to this Agreement, the parties shall be paid a percentage of the revenue generated from the distribution, exploitation and marketing of the Property, in accordance with the following priority:

a. TSSF Venture operating expenses, including all expenses incurred by the TSSF Venture in connection with the distribution and exploitation of the Film and the ancillary rights therein and all costs of production of the Film, which have not already been paid.

b. INITIAL DISTRIBUTION: MOGS shall be paid One Hundred Percent (100%) of the gross revenue received from the distribution and exploitation of the Film and the Property in all media (including, without limitation, all ancillary rights) worldwide until such time as MOGS receives the sum of its initial investment of up to $2,250,000, which shall not include interest, plus any such additional financing provided pursuant to this Agreement (the "return of investment").

c. Deferments, if any.

d. Third Party Participants, if not paid directly by MOGS or FIGS.

e. ADDITIONAL DISTRIBUTION: After the return of MOGS investment, MOGS and FIGS shall each receive Fifty Percent (50%) of all net profits. The net profits shall be defined as gross receipts received by the Film and the Property, to the extent related to this Film, in all media (including, without limitation, all ancillary rights) worldwide, less the aggregate of all costs, charges, fees and expenses of the Film and the Property. For purposes of computing net profits only the costs and expenses approved by both Parties and incurred by either Party directly on behalf of the Property shall be a charge against and shall reduce the gross receipts of the Property in calculating net profits of the Film and the Property.

Back to your post:

<

That is not true, either. Not all warrants and options from public companies are turned into "144 restricted shares after they are issued." In fact, in the context of convertible notes, it is VERY uncommon for converted shares to be restricted in any way. In any event, there is NOTHING in the agreements that indicates that the stock issued on conversion is in any way restricted. If there is such a provision or an agreement, it does not appear to be among anything NVEI has made public. If it is, please point me to where it is.

<<even though the movie was announced after the tech was aquired i'm positive it was in the planning stages way before we aquired the tech.

It does not really matter to anything whether the movie agreement or tech agreement were cut first. The only reason I mentioned it is because I was chastised in part on that basis for not having done any DD. As it turns out, my initial statement (which I thought was true when I made it) was in fact true (at least according to the publicly released statements by NVEI) and it sure looks as though I was not the one who had not done the DD. But, that said, it makes no difference to any evaluation of NVEI. This aspect is a dead issue as far as I am concerned.

<<the gross dollar figures you are seeing talked about have not been plucked from the sky by NVEI, but rather those are the figures the distributors they have been talking to have given them.

And this is publicly disclosed where? Surely, this is not nonpublic information has not been provided only to a select few.

<<it's my understanding any distribution deal that is signed will be a percentage based one. john said they have several options. they could sign with a major distributor and have the film played in more theaters, but this would probably cost them a greater percentage. or they could sign with a smaller distribution company, have the film shown in fewer theaters but get a bigger percentage of the gross. bruce brown has been in the motion picture industry for 30+ years so there's no doubt in my mind he knows the in's and out's of that industry.

I do not doubt that any distribution deal will result in the JV only getting a percentage of the gross: in fact I agree with it. But, that is, in part, my point. The total gross does not all go to the JV. The JV will only get a portion of the gross -- not all of it. Thus, it is not true that the first $2.25 million of the movie's gross goes to NVEI.

<<i have read several articles about the up-coming movie in various surfing publications. it seems the surfing world is very excited about this film. there's a link in the links page for one of those articles.

I have not read those yet, but I will.

Troy