_____________________
Offering Price To Public | Underwriting Discount and Commissions(1) | Proceeds to Others(2) | Proceeds to Issuer (3) | |||||||||||||
Unit Price | $ | 500 | $ | 0.00 | $ | 0 | $ | 500 | ||||||||
Minimum | $ | 500 | $ | 0.00 | $ | 0 | $ | 500 | ||||||||
Maximum | $ | 50,000,000 | $ | 0.00 | $ | 0 | $ | 50,000,000 |
(1) We do not intend to use commissioned sales agents or underwriters.
(2) No finder’s fees are being paid to any third parties from the Offering proceeds.
(3) Does not include expenses of the Offering, including costs of blue sky compliance, fees to be paid to JumpStart Securities, LLC and other offering related expenses which may include, among other things, legal fees, state and other administrative filing fees, accounting, printing, advertising, travel, marketing, blue sky or other state-level compliance and other expenses associated with establishing and maintaining escrow accounts, technological offering platforms and actual out-of-pocket expenses incurred by the Company selling the Units membership interest. The Company estimates these expenses to be approximately $160,000 in the aggregate, assuming a sale of all 100,000 Units of membership interest for an aggregate purchase price of $50,000,000. If the company engages the services of additional broker-dealers in connection with the offering, their commissions will be an additional expense of the offering. The company expects to enter into service agreements with JumpStart Securities, LLC (“JumpStart”), a member of FINRA, to provide subscription and administrative services for the offering. JumpStart Securities, LLC is not an underwriter and will not be paid underwriting fees, but will be paid service fees. Currently, there are no finder’s fees or other fees being paid to third parties from the proceeds, other than those disclosed below. See the “Plan of Distribution” for details regarding the compensation payable in connection with this offering.
This offering of membership interests (the “Units”) in Opening Night Enterprises, LLC (the “Company”) is being made on a “best efforts” basis, which means there is no guarantee that any minimum amount will be sold. The Units are being offered and sold by the Company and through JumpStart Securities, LLC (“JumpStart”), a broker/dealer registered with the Securities and Exchange Commission (the “SEC”) and a member of the Financial Industry Regulatory Authority (“FINRA”). The Company may undertake one or more closings on a rolling basis, where, after each such closing, funds tendered by investors are disbursed to the Company and the corresponding Units are delegated to the investors whose subscriptions were accepted. This offering will commence upon its qualification by the Securities and Exchange Commission and shall terminate upon the earlier of: (1) Sale of the Offering maximum (100,000) Units; (2) one year from the date that the Offering is qualified by the Commission, unless extended unless extended by the Company in its sole discretion in accordance with applicable Commission regulations for such additional period as may be sought to sell the 100,000 Units; or (3) any earlier date upon which the Offering is terminated by the Company in its sole discretion. The funds received in exchange for Units, shall be held in an escrow account maintained by Prime Trust, LLC. All funds received by the escrow agent shall be held only in a non-interest bearing bank account. Upon closing under the terms as set out in this Offering Circular, funds will be immediately transferred to the Company where they will be available for use in the operations of the Company’s business in a manner consistent with the “USE OF PROCEEDS TO ISSUER” in this Offering Circular.
Although not signed at this time, the escrow agreement with Prime Trust, LLC is attached as an Exhibit hereto and will be executed between the parties thereto upon the SEC’s qualification of this offering. The execution of the escrow agreement in advance of qualification will subject the issuer to expenses which it shall be able to incur once the offering is certain to launch.
Investment in the Units is risky and should only be made by those able to bear the total loss of their investment. Prospective Investors must read and carefully consider the RISK FACTORS beginning on page 4 below.
Opening Night Enterprises – Offering Circular | 1 |
Opening Night Enterprises – Offering Circular | 2 |
SUMMARY OF THE OFFERING | 6 |
1. Company: | 6 |
2. Nature of the Units: | 6 |
3. The Offering: | 6 |
4. Company Managers: | 6 |
5. Management Rights and Duties: | 6 |
6. Business of the Company: | 6 |
7. Estimated Use of Proceeds: | 6 |
8. Limited Liability of Members: | 7 |
9. Rights of First Refusal and First Notice: | 7 |
10. Special Note Regarding Forward-Looking Statements: | 7 |
11. Prior Performance: | 7 |
12. Tax Ruling: | 7 |
RISK FACTORS | 8 |
North American Securities Administrators Association Uniform Legend | 8 |
Non-Transferability of Units | 9 |
No Assurance of Adequate Capitalization | 9 |
No Assurance of Recovery of Capital or Payment of Profits | 9 |
Uncertainty of Critical or Public Acceptance Minimized | 9 |
The Company Has No Operating History | 9 |
New Business Model | 9 |
Limited Business Purpose of Company | 9 |
Single Purpose Entities | 10 |
No resale Market of Disposition of Units | 10 |
No Assurance | 10 |
Subsidiary Rights Income Is Uncertain | 10 |
No Distribution Currently In Place | 10 |
Potential Conflict Of Interest | 10 |
Contributions to the Capital of the Limited Liability Company | 11 |
Managers Control | 11 |
Abandonment or Close of Production | 11 |
Managers' Right to Obtain and Make Loans | 11 |
Production of Musical at Minimum Capitalization Reduces Chance of Success | 11 |
Risk of Authorizing Immediate Use of Commitment Prior to Minimum Capitalization of the Company | 11 |
No Contracts Have Been Entered Into | 11 |
No Withdrawal From Company | 12 |
Offering Price of the Units Arbitrarily Determined | 12 |
Long Term Project | 12 |
Commercial Success Not Certain | 12 |
The Company Faces Significant Competition | 12 |
Potential Legal Challenges | 12 |
Federal Income Tax Consequences | 12 |
Investment in Initial Season Only | 13 |
Contingencies Related to Inability to Finance All Six Musical Productions | 13 |
Opening Night Enterprises – Offering Circular | 3 |
DILUTION | 14 |
Initial Immediate Dilution | 14 |
Potential for Future Dilution | 14 |
Nature of Units and Interests Held by Non-Investor Members | 14 |
Anti-Dilution Provisions of the Units | 14 |
PLAN OF DISTRIBUTION AND SELLING TO SECURITYHOLDERS | 15 |
Distribution of Securities | 15 |
Disposition of Units and the Offering | 15 |
Termination of Offering and Potential Market-Outs | 17 |
USE OF PROCEEDS TO ISSUER | 18 |
TV Production Budget Worksheet | 18 |
Opening Night - Musical Production Budget Worksheet | 20 |
Potential Payments to Managers from Offering Proceeds | 21 |
Best Efforts Offering Adjustments | 21 |
Potential Use of Proceeds to Discharge Company Debts | 21 |
DESCRIPTION OF BUSINESS | 22 |
Purpose | 22 |
Subsequent Productions | 22 |
Additional Companies | 22 |
Subsidiary Participation | 23 |
Co-Productions | 23 |
Television Series and Theatrical Industry | 23 |
Additional Information About the Company and its Business | 25 |
DESCRIPTION OF PROPERTY | 25 |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 26 |
Plan of Operations | 26 |
Post-Season 1 Outlook | 27 |
General Industry Trends | 27 |
MANAGERS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES | 29 |
COMPENSATION OF MANAGERS AND EXECUTIVE OFFICERS | 31 |
Company Management and Series-Related Compensation | 31 |
Necessary Definitions | 31 |
Musical-Related Compensation of Managers | 32 |
Company Owner Revenues Available to Managers | 34 |
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS | 35 |
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS | 36 |
No Musical-Related Manager Compensation Likely to Eventuate in Fiscal Year 1 | 36 |
Investor Roadshow Performance Compensation | 36 |
Series-Related Manager Compensation | 36 |
Manager Reimbursements | 36 |
No Company Net Profits Participations For Managers Likely to Eventuate in Fiscal Year 1 | 37 |
No Intended Third Party Beneficiaries | 37 |
SECURITIES BEING OFFERED | 37 |
Opening Night Enterprises – Offering Circular | 4 |
Voting Rights | 37 |
Rights of First Refusal/Anti-Dilution Rights | 37 |
Distributions | 38 |
Restriction on Transferability of Units | 39 |
No Guaranty | 39 |
Audit and Statement | 39 |
Unit Rights and Preferences | 40 |
Unregistered and Illiquid Nature of Units | 40 |
Limited Liability of Investors | 40 |
FEDERAL TAX DISCUSSION | 41 |
ERISA CONSIDERATIONS | 46 |
General Fiduciary Obligations | 46 |
PART F/S | 48 |
PART III - EXHIBITS INDEX | 68 |
SIGNATURE PAGE | 69 |
Opening Night Enterprises – Offering Circular | 5 |
3. The Offering: The Units are being sold for Five Hundred Dollars U.S. ($500.00) per Unit, minimum purchase per Investor is One (1) Unit. Up to One Hundred Thousand (100,000) Units are available for sale under this Offering, for an aggregate potential raise of Fifty Million Dollars U.S. ($50,000,000.00). This Offering is being made on a “best efforts” basis, meaning that there is no guarantee that any minimum amount will be sold and the Units are being sold by the Managers, who will not receive any form of success-based, transaction-based or sales-based compensation in exchange for their selling efforts. The Company may undertake one or more closings on a rolling basis, where, after each such closing, funds tendered by potential Investors are disbursed to the Company and the corresponding Units are delegated to the Investors whose subscriptions were accepted. This Offering will commence upon qualification of the Offering by the Securities and Exchange Commission (the “SEC”) and shall terminate upon the earlier of: (1) Sale of the Offering maximum (100,000) Units; (2) one year from the date that the Offering is qualified by the SEC, unless extended by the Managers in their sole collective discretion in accordance with applicable SEC regulations for such additional period as may be sought to sell the 100,000 Units; or (3) any earlier date upon which the Offering is terminated by the Company in its sole discretion. The funds received in exchange for Units (the “Commitments”), shall be held in a money market or other interest bearing account segregated from the Company’s funds until such time as the Commitments are accepted or the Offering is terminated.
7. Estimated Use of Proceeds: The proceeds of this Offering will go to fund the business of the Company generally, and specifically, the vast majority of the funds raised under this Offering will be used to finance production of both (a) the Series and (b) the initial 12-week (96 show) run of the U.S. exhibition of as many of the Musicals as possible and as the Managers in their collective professional discretion deem economically and commercially feasible. By financing the production of the Series, the Company will all but eliminate the risk of loss to networks and other television programming distributors who might otherwise pass on distributing the Series if they had to finance the Series’ production. The Managers believe that this will give the Series the best possible opportunity to be distributed by the best possible range of television distributors on the best terms possible. (See below at, USE OF PROCEEDS TO ISSUER, generally and also at, MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS at ‘Plan of Operations’). In addition to the foregoing, a commission fee of One and 95/100 Percent (1.95%) of each Unit sold will be paid to JS, the Offering’s sole licensed broker-dealer.
Opening Night Enterprises – Offering Circular | 6 |
Opening Night Enterprises – Offering Circular | 7 |
Opening Night Enterprises – Offering Circular | 8 |
Opening Night Enterprises – Offering Circular | 9 |
Opening Night Enterprises – Offering Circular | 10 |
Although not signed at this time, the escrow agreement with Prime Trust, LLC is attached as an Exhibit hereto and will be executed between the parties thereto upon the SEC’s qualification of this offering. The execution of the escrow agreement in advance of qualification will subject the issuer to expenses which it shall be able to incur once the offering is certain to launch.
Opening Night Enterprises – Offering Circular | 11 |
Opening Night Enterprises – Offering Circular | 12 |
The Company is only being set up to manage the business operations of the first season of the Series and its accompanying Musicals and is not intended to have any economic or other interest in the subsequent seasons of the Series, should they eventuate, other than those limited rights of first refusal to invest in similar offerings of equity in future entities formed to finance future seasons of the Series, if any. Furthermore, the rights of first refusal to invest in any future seasons and companies are subject to various qualifications as discussed in greater detail herein below (see, SECURITIES BEING OFFERED at Rights of First Refusal/Anti-Dilution Rights). Therefore, regardless of the performance of season 1 of the Series, in the event that subsequent seasons of the Series go on to be hits, there is no guarantee that the Investors will participate in any such financial or other success unless they invest separately into those subsequent seasons as well.
Opening Night Enterprises – Offering Circular | 13 |
Opening Night Enterprises – Offering Circular | 14 |
PLAN OF DISTRIBUTION AND SELLING TO SECURITY HOLDERS
The Company is not making use of any underwriter or finders, though it is making use of a single licensed broker-dealer, consisting of JS, in selling Units under this Offering. The only commissions, finder’s fees, or other payments being made by or on behalf of the Company to any third parties from the Offering proceeds in exchange for the sale of any Units under this Offering consist of JS’ One and 95/100 Percent (1.95%) sales commission fee on each Unit sold under the Offering and reimbursement of certain associated costs incurred by JS in connection with this Offering. Specifically, JS relies in part on certain offering administrative and technological infrastructures and services provided by FundAmerica, including but not limited to secured transactional programs and platforms (i.e. technology), escrow account set-up and management services and disbursement services and platforms integrated into/with their technology and platforms, bad actor checks and the like associated with management and administration of the Offering. These administrative fees and overhead are reimbursable on an ongoing basis from the Offering proceeds and otherwise by the Managers who may then draw down reimbursements from the Offering proceeds themselves.
This Offering is being undertaken in connection with the licensed broker-dealer JS and JS is, in turn supported by FundAmerica, so the distribution of securities under this Offering shall be handled by JS operating through FundAmerica’s technological platforms and model as follows:
Investors will review the Offering’s terms of investment via a portal on a page on the Company’s website which will have some aspect dedicated to this Offering. There, the Investors will be able to access (either directly or via URL links to the SEC or other such public websites) information about the Company and the Offering. At that portal, potential Investors will also be able to subscribe for Units, execute the accompanying Subscription Agreement online and make the corresponding Commitments of capital. Once the subscriptions and corresponding Commitments have been submitted via the website, they cannot be retracted or withdrawn by the potential Investor. At that point, JS shall begin the necessary subscriber due diligence required to qualify an individual or entity investor under Regulation A, Tier II offerings. If the subscriber fails to meet the necessary standards, then their Commitments shall be returned and their subscriptions voided. If, however, the subscriber is qualified to invest, then their subscriptions (including their Commitments) shall sit in the escrow account administered by Prime Trust until such time as the Company directs JS to close on the individual subscriber’s funds (either alone or, more likely, as part of a larger group of accepted subscriptions) and it is at that point of closing that the individual subscriber’s Subscription Agreement will be accepted, their corresponding Units issued in the form of their executed Subscription Agreements being returned to them, and at that point, the commissions and any FundAmerica offering costs will be deducted off-the-top of the Commitments before the balance of said Commitments are remitted to the Company’s account(s).
The Company is a new entity and the only owners of its Units had been the founding Members, who therefore owned 100% of the Company. All of the Units offered hereunder are newly issued, in the sense that they have never been offered for sale to any other non-founding Member of the Company. This is the Company’s first issuance of Units or potential ownership Interests of any sort to any outside third parties. To the extent that the Managers of the Company are the ones that are effectively selling their Interests in the Company, as they are presently the owners of 100% of the Company’s Interests, all Units for sale in this Offering are being sold solely by the Managers, which will receive no additional consideration in exchange for their selling efforts. One of the Managers consists of an entity, Charles Jones II Enterprises, LLC, which is wholly owned and operated by Charles Jones II and which maintains its Company Interests on his individual behalf.
The Company plans on using one or more self-managed websites and/or social media outlets to aid in the sale of the Units. The Company presently anticipates making use of yet-to-be-created pages on its Facebook site to drive awareness of the Offering and on which it will provide access to this Offering Circular and any other necessary disclosure materials associated with the Offering. The Company will establish a site that allows qualified investors to subscribe through a dedicated website or page.
All subscribers will be instructed by the Company or its agents to transfer funds by wire or ACH transfer directly to the escrow account established for this Offering or deliver checks made payable to “Prime Trust, as Escrow Agent to Investors in the Opening Night Enterprises Securities Offering” which the escrow agent shall deposit into such escrow account and release to the Company at each closing. The Company may terminate the Offering at any time for any reason at its sole discretion. (Although not signed at this time, the escrow agreement with Prime Trust, LLC is attached as an Exhibit hereto and will be executed between the parties thereto upon the SEC’s qualification of this offering. The execution of the escrow agreement in advance of qualification will subject the issuer to expenses which it shall be able to incur once the offering is certain to launch.)
We intend to engage JumpStart Securities, LLC, a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority (“FINRA”), to perform the following administrative and technology related functions in connection with this offering, but not for underwriting or placement agent services. Please see the “JumpStart Selling Agreement” for more information.
Opening Night Enterprises – Offering Circular | 15 |
Proposed JumpStart Selling Agreement
1. | Accept investor data from the company, generally via the FundAmerica software system, but also via other means as may be established by mutual agreement; |
2. | Review and process information from potential investors, including but not limited to running reasonable background checks for anti-money laundering ("AML"), IRS tax fraud identification and USA PATRIOT Act purposes, and gather and review responses to customer identification information; |
3. | Review subscription agreements received from prospective investors to confirm they are complete; |
4. | Advise the company as to permitted investment limits for investors pursuant to Regulation A, Tier 2; |
5. | Contact the company and/or the company's agents, if needed, to gather additional information or clarification from prospective investors; |
6. | Provide the company with prompt notice about inconsistent, incorrect or otherwise flagged (e.g. for underage or AML reasons) subscriptions; |
7. | Serve as registered agent where required for state blue sky requirements, provided that in no circumstance will JumpStart solicit a securities transaction, recommend the company's securities or provide investment advice to any prospective investor; |
8. | Transmit data to the company's transfer agent in the form of book-entry data for maintaining the company's responsibilities for managing investors (investor relationship management, aka “IRM”) and record keeping; |
9. | Keep investor details and data confidential and not disclose to any third party except as required by regulators, by law or in our performance under this Agreement (e.g. as needed for AML); and |
10. | Comply with any required FINRA filings including filings required under Rule 5110 for the offering. |
The Company shall pay Jumpstart a broker-dealer services fee equivalent to 1.95% of capital raised. JumpStart Securities, LLC is not participating as an underwriter and under no circumstance will it solicit any investment in the company, recommend the Company's securities or provide investment advice to any prospective investor, or make any securities recommendations to investors. JumpStart Securities, LLC is not distributing any securities offering prospectuses or making any oral representations concerning the securities offering prospectus or the securities offering. Based upon JumpStart Securities, LLC's anticipated limited role in this offering, it has not and will not conduct extensive due diligence of this securities offering and no investor should rely on JumpStart's involvement in this offering as any basis for a belief that it has done extensive due diligence. JumpStart does not expressly or impliedly affirm the completeness or accuracy of the Offering Circular presented to investors by the issuer. All inquiries regarding this offering should be made directly to the Company.
Any subscription checks should be sent to Prime Trust, LLC, 10890 S. Eastern Avenue, Suite 114, Henderson, NV 89052, and be made payable to “Prime Trust, LLC as Escrow Agent for Investors in Opening Night Enterprises Securities Offering.” If a subscription is rejected, funds will be returned to subscribers within ten days of such rejection without deduction or interest. Upon acceptance by us of a subscription, a confirmation of such acceptance will be sent to the subscriber by the company. Prime Trust, LLC has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the shares.
Opening Night Enterprises – Offering Circular | 16 |
The aforementioned market-out equivalent right of the Managers to disqualify a given potential Investor will typically only inherit in instances where either a material change in the Company’s business plan occurs, or where it becomes clear to the Managers that they will not be able to raise the full amount of financing necessary to perform the specific business operation that those funds were earmarked to perform. An example of the former instance might inherit where the Managers determine after filming the Series that one of the Musicals would be completely abortive as a live stage production and so, they decided not to raise the financing that would have otherwise been associated with the staging of that live theatrical production. However, the decision to void subscriptions and return the corresponding Commitments in any such circumstances is entirely within the discretion of the Managers. Without limitation to the foregoing and strictly for the avoidance of doubt, neither JS, nor FundAmerica will retain any right to cancel a potential Investor’s subscriptions under the Offering unless the potential Investor fails to meet the necessary Regulation A, Tier II investment requirements (e.g. they qualified as so-called “bad actors”) or where the Offering terminates for any reason prior to acceptance of the potential Investor’s subscription.
Opening Night Enterprises – Offering Circular | 17 |
USE OF PROCEEDS TO ISSUER *
TV Production Budget Worksheet | ||
Name of Program | OPENING NIGHT – TELEVISION SERIES | |
Number of TV Episodes & duration | PILOT AND THEN 12 EPISODES – 1 HOUR IN LENGTH | |
Previous Funding | ||
Development | $ 2,500 | $ 2,500 |
Production | $ 2,500 | $ 2,500 |
TV DEVELOPMENT / SCRIPT | ||
Concept & Rights (All rights owned by Production Company) | $ 0.00 | |
Research – Musical Selection Committee | $ 20,000.00 | |
Story / Script / Writers Fees | $ 5,000.00 | |
Other (specify) REALITY PROGRAM DEVELOPMENT | $0.00 | |
Development Subtotal | $25,000.00 | |
TV PRODUCTION (PER EPISODE) | ||
Producer Fees (total incl. EP) | $ | 100,000.00 |
Director Fees (total) | $ | 40,000.00 |
Presenters / Actors / Talent (UNION) | $ | 145,000.00 |
Production Staff & Crew (UNION) | $ | 100,000.00 |
Studio / Locations | $ | 100,000.00 |
Lighting and Sound design and operation | $ | 75,000.00 |
Wardrobe / Make-Up / Art Department | $ | 25,000.00 |
Travel/Accommodations/Living | $ | 75,000.00 |
Production Office / Admin | $ | 25,000.00 |
Scenery and Costume Design and Creation | $ | 75,000.00 |
Production Subtotal | $ 760,000.00 |
* We have entered into service agreements with JumpStart Securities, LLC, a member of FINRA, to provide subscription and administrative services for the offering. JumpStart Securities, LLC is not an underwriter and will not be paid selling commissions or underwriting fees, but will be paid service fees equal to One and 95/100 Percent (1.95%) of the Units sold in connection with this Offering.
Opening Night Enterprises – Offering Circular | 18 |
TV POST PRODUCTION (PER EPISODE) | ||
Music & Copyright | $ | 50,000.00 |
Library Footage & Copyright | $ | 10,000.00 |
Film / Tape Stock | $ | 10,000.00 |
Picture Post Production | $ | 20,000.00 |
Audio Post Production | $ | 20,000.00 |
Titles/Graphics | $ | 10,000.00 |
Post Production Labor | $ | 50,000.00 |
TV Post Production Cont. | ||
Other (specify) | $ | |
Post Production Subtotal | $ 170,000.00 | |
TV MARKETING & ADMINISTRATION | ||
Marketing / Delivery | $ | 20,000.00 |
Administration / Overheads | $ | 50,000.00 |
Legal | $ | 10,000.00 |
Insurance | $ | 10,000.00 |
Sundry (e.g. finance, ACC etc.) | $ | 10,000.00 |
TV PILOT – 5 City Promotional Concerts w/ Kristin Chenoweth and the Musicals | $ | 715,000.00 |
Marketing/Admin AND Promotional Tour Subtotal Costs | $ 815,000.00 | |
Total Above The Line (Per Episode) | $ 320,000.00 | |
Total Below The Line (Per Episode) | $ 725,000.00 | |
Contingency (Per Episode) | $ 100,000.00 | |
Production Company Overhead (Per Episode) | $ 100,000.00 | |
SUBTOTAL COST PER EPISODE = $1,245,000.00 TOTAL FOR 13 EPISODES | $ 16,185,000.00 | |
TOTAL TELEVISION PRODUCTION BUDGET (INCLUDING 13 EPISODES, 5 CITY PROMOTIONAL CONCERT TOUR AND MARKETING AND ADMINISTRATION) | $17,000.000.00 |
Opening Night Enterprises – Offering Circular | 19 |
OPENING NIGHT - MUSICAL Production Budget Worksheet (Off Broadway) These are the cost’s anticipated to ensure ALL six musical’s long term sustainability and to maximize profits. | |||
Name of MUSICAL | ONE OF SIX MUSICALS (EACH MUSICAL ESTIMATED AT SAME COST) | ||
Number of Shows – 12 Weeks, 96 Shows | This Budget Reflects 32 SHOWS – 4 Week Time Period Budget | ||
PRODUCTION DEVELOPMENT | |||
Production Development: (Includes rehearsal expenses, director, choreographer, costume designer salaries and costs for making costumes, lighting, sound, scenery & props, musical arrangements and production development staff.) | ONE TIME BUDGETARY COST | $650,000.00 | |
MUSICAL’S OPERATIONAL COST FOR 32 SHOWS (4 week) | |||
Producer Fees (total incl. EP) | $ | 100,000.00 | |
Author, Composer, Lyricist Royalty at 2% gross revenue for each | $ | 70,000.00 | |
Actors / Talent (UNION) | $ | 125,000.00 | |
Production Staff & Crew (UNION) | $ | 150,000.00 | |
Theater Rental | $ | 150,000.00 | |
Costume Cleaning, Prop Maintenance | $ | 20,000.00 | |
Wardrobe / Make-Up / Art Department (UNION) | $ | 60,000.00 | |
Air Travel/Accommodations/Living | $ | 75,000.00 | |
Orchestra Conductor and Musicians | $ | 160,000.00 | |
Travel/Load-in of Equipment by Stagehands | $ | 60,000.00 | |
PRODUCTION SUBTOTAL | $ 970,000.00 | ||
MUSICAL MARKETING & ADMINISTRATION - 32 SHOWS (4 Week Period) | |||
Marketing/Delivery/Publicist | $ | 25,000.00 | |
Administration/Overheads | $ | 90,000.00 | |
Legal & Insurance | $ | 35,000.00 | |
Box Office & Programs | $ | 5,000.00 | |
Payroll Taxes | $ | 50,000.00 | |
Equity Pension, Health Insurance | $ | 25,000.00 | |
Contingency | $ | 250,000.00 | |
MARKETING & ADMINISTRATION SUBTOTAL | $ 480,000.00 | ||
PRE-OPENING AND RUNNING OPERATIONAL BUDGET TOTAL FOR 4 WEEKS, 32 SHOWS: (NON- BROADWAY STAGE) | $1,450,000.000 | ||
MUSICAL PRODUCTION OPERATIONAL COSTS FOR 12 WEEKS, 96 SHOWS = | $4,350,000.000 | ||
ONE TIME PRODUCTION DEVELOPMENTAL COSTS (SEE ABOVE) | $650,000.000 | ||
TOTAL ESTIMATED COSTS FOR ONE OF THE SIX MUSICAL’S TO ENSURE SUSTAINABILITY AND TO MAXIMIZE PROFITS. TOTAL FOR ALL SIX SHOWS = $30,000,000.00 | $5,000,000.00 |
Opening Night Enterprises – Offering Circular | 20 |
The Company reserves the right to alter the use of Offering proceeds as stated herein based on the ongoing needs of the business of the Company, the amount of capital raised and based on any unforeseen circumstances arising subsequent to the closing of this Offering. Any reallocation of the estimated use of proceeds shall be undertaken at the Managers’ sole reasonable discretion in accordance with the perceived best interests of the Company.
Opening Night Enterprises – Offering Circular | 21 |
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Opening Night Enterprises – Offering Circular | 27 |
The somewhat depressed nature of the film industry (in terms of actor salaries) as compared with past decades, has meant that big name actors have been finding increasingly less diversity of roles and smaller actor’s fees in the once glamorous film industry and those actors have been branching out to different realms of the entertainment industry, most notably to TV and Broadway. With bigger and bigger names from Hollywood and the music industry opting to do stints in shows on Broadway, Broadway productions have been able to use those names not only to attract broader audiences, but also to increase ticket prices. If film were to suddenly start paying 1980’s actor wages again and studios abandoned their newfound penchant for franchise films that easily transcended national, linguistic and social barriers (such as superhero movies), then it could result in fewer big name actors plying their trades on Broadway, which could potentially affect projected revenues for the Company, however, this is an even less likely scenario in the near term than that of a major terrorist attack sapping tourism.
Opening Night Enterprises – Offering Circular | 28 |
Name | Position(s) | Age | Term of Office* | Approximate Hours per Week for Part- Time Employees*** |
Kristin Chenoweth | Manager, Talent (TV), Executive Producer (TV and Musicals) | 49 | Full-Time during the initial investor roadshow and during production of any TV Series and Musical in which she is participating as a producer or talent | |
Charles Jones II | Manager, CEO, Executive Producer (TV and Musicals) | 64 | Full-Time | |
Regina Dowling | Manager, Talent (TV), Executive Producer (TV and Musicals) | 49 | Full-Time during the initial investor roadshow and during production of any TV Series and Musical in which she is participating as a producer or talent | |
Senge Creates, Inc. (on behalf of Charles Senge) | Producer (TV), Director (TV) | 64 | ** | Full-Time during any TV Series or Musical that he is directing, otherwise any employment would be sporadic in nature only, as an outside consultant. |
Opening Night Enterprises – Offering Circular | 29 |
Kristin Chenoweth: Kristin Chenoweth won a Tony Award in 1999 for her Broadway performance as Sally Brown in You're a Good Man, Charlie Brown. In 2003, she received wide notice for originating the role of Glinda in the musical Wicked, including a nomination for another Tony. Her television roles have included Annabeth Schott in NBC's The West Wing and Olive Snook on the ABC comedy-drama Pushing Daisies, for which she won a 2009 Emmy Award for Outstanding Supporting Actress in a Comedy Series. Kristin also starred in the ABC TV series GCB in 2012. Kristin's stage work includes five City Center Encores! productions, Broadway's The Apple Tree in 2006, Promises, Promises in 2010 and On the Twentieth Century in 2015, as well as Off-Broadway and regional theatre. Chenoweth had her own sitcom Kristin in 2001, and has guest starred on many other television shows, including Sesame Street and Glee, for which she was nominated for Emmy Awards in 2010 and 2011. In films, she played significant roles in Bewitched (2005), The Pink Panther (2006) and RV (2006). She has also played roles in made-for-TV movies, such as Descendants (2015); done voice work in animated films such as Rio 2 (2014) and The Peanuts Movie (2015) along with the animated TV series Sit Down, Shut Up; hosted several award shows; and released several albums of songs, including A Lovely Way to Spend Christmas (2008), Some Lessons Learned (2011), Coming Home (2014) and The Art of Elegance (2016). Chenoweth also penned a 2009 memoir, A Little Bit Wicked.
Charles Senge: Charles “Chase” Senge is currently the principal of the eponymously named SengeCreates, Inc. Prior to starting his own company, Chase worked for 20 years as Senior Show Director for the Walt Disney Co., developing new shows and entertainment formats for their properties around the globe. His creative concepts and stage productions have been seen by millions of audience members throughout the United Sates, Asia, Europe and Latin America. In addition to directorial experience, Chase also has an extensive background in staging, choreography, lighting, scenery, costuming, and special effects. Chase currently operates through SengeCreates, Inc. providing consulting services to help third party companies create original productions for theatrical, touring and televised special events. Chase’s stage productions have been nominated for Broadway’s TONY Award and the NY Drama Desk Award, plus received the “Diamond Award of Excellence” for the Best Cruise Line Show, and the “Big E” award for Best Show from the international theme park industry (IAAPA). As a consultant, Chase’s theatrical and creative development expertise has been called upon to collaborate on new projects of numerous organizations, as well as to “ show doctor” existing productions. Chase has brought his unique creative approach to such clients as Broadway’s Nederlander Worldwide Entertainment, Universal Studios, Bally’s Casino Las Vegas, Macy’s Thanksgiving Day Parade, the Pasadena Tournament of Roses Parade, as well as Busch Entertainment Corp., Virgin Atlantic, IBM, the Rockefeller Group, and the noted creative think-tank Eureka Ranch. Chase is the only creative consultant noted in the Guinness Book of World Records.
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1. First, to the payment of the Running Expenses and Other Expenses. Running Expenses, as described herein shall include a Musical’s standard gross corridor participations1, which are typically payable to a limited range of key personnel, including the writer(s) of the Musical’s book, the Musical’s director, et. al. In a gross corridor format, the total weekly gross from a musical that end up being allocable to such participants is in the range of 11.5% - % to 18%. The producer’s management royalty (as described above) is 3% of the total 11.5% - 18% total gross corridor and, as also explained above, the producer’s share is usually 2 of the 3 percentage points and those 2% are shared among all of the Musical’s producers including any Managers who are producers.
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a. | The Managers may allocate Net Profits “off the top” to third parties in reasonable and customary arms-length transactions in consideration of services provided or rights contributed to the Musicals or any other production(s) as contemplated herein (these shall generally be in the form of Deferrals [as defined in the OPERATING AGREEMENT – EXHIBIT1A-2B – Article I (GLOSSARY) at “Deferments or Deferrals” and “Producer and Professional Deferrals or PPDs”]). There shall be no other distribution of Net Profits prior to their characterization as Adjusted Net Profits as defined immediately below. |
b. | The remainder of such Net Profits, if any, shall be deemed “Adjusted Net Profits” of the Company, and shall be applied as follows: |
i. | INVESTOR MEMBER’S NET PROFITS: An amount equal to 50% of Adjusted Net Profits shall be divided among the Investor Members of the Company, with each such Investor Member receiving that portion thereof as its Commitment bears to the amounts raised in the aggregate from all Investor Members; and |
ii. | MANAGERS’ NET PROFITS: An amount equal to 50% of the Adjusted Net Profits shall be paid to the Managers of the Company. The Managers shall have the right to allocate Manager’s Net Profits to themselves or any third parties in their sole discretion. |
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Name of Unitholder | Title of Class | Amount and Nature of Beneficial Ownership | Amount and Nature of Beneficial Ownership Acquirable | Percent of Class |
Kristin Chenoweth | Manager | 33.334% Voting Interest | N/A | 33.334% |
Charles Jones II | Manager | 33.333% Voting Interest | N/A | 33.333% |
Regina Dowling | Manager | 33.333% Voting Interest | N/A | 33.333% |
Name of Unitholder | Title of Class | Amount and Nature of Beneficial Ownership | Amount and Nature of Beneficial Ownership Acquirable | Percent of Class |
Kristin Chenoweth | Member | 33% Non-Voting Units | N/A | 33% |
Charles Jones II | Member | 33% Non-Voting Units | N/A | 33% |
Regina Dowling | Member | 33% Non-Voting Units | N/A | 33% |
Senge Creates, Inc. (on behalf of Charles Senge) | Member | 1% | N/A | 1% |
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c. | The Managers may allocate Company Net Profits “off the top” to third parties in reasonable and customary arms-length transactions in consideration of services provided or rights contributed to the Series, or one or more Musicals, or other production(s) presented hereunder. There shall be no other distribution of Company Net Profits prior to their characterization as Company Adjusted Net Profits as defined immediately below. |
d. | The remainder of such Company Net Profits, if any, shall be deemed “Company Adjusted Net Profits”, and shall be applied as follows: |
Opening Night Enterprises – Offering Circular | 38 |
i. | INVESTOR MEMBER’S COMPANY NET PROFITS: An amount equal to 50% of Company Adjusted Net Profits shall be divided among the Investor Members, with each such Investor Member receiving that portion thereof as its Commitment bears to the amounts raised in the aggregate from all Investor Members; and |
ii. | MANAGERS’ COMPANY NET PROFITS: An amount equal to 50% of the Company Adjusted Net Profits shall be paid to the Managers. The Managers shall have the right to allocate Manager’s Company Net Profits to themselves and/or any third parties in their sole discretion. |
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An Investor should be able to include in his or her amount “at risk” his or her cash contribution to the Company made from unborrowed funds or from proceeds of a borrowing that he or she is personally liable to repay, provided such borrowing is from a person who; (i) does not have an interest other than as creditor in the Company; and (ii) is not related, within the meaning of Code Section 168(e)(4)(D), to a person with a non-creditor-only interest in the Company (other than the Investor). If the above-discussed rules are followed, each Investor could reasonably expect to have sufficient amounts “at risk” in the Company to deduct his or her distributive share of any tax loss that may be experienced by the Company, to the extent of his or her cash capital contribution or the adjusted basis of property contributed to the Company. On the other hand, there is a risk that the “at risk” limitations would operate to defer the deduction for advertising costs paid with borrowed funds, if funds were borrowed to pay advertising costs.
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“Portfolio income” is a third classification of income, that was created by Congress (along with “active” income and “passive” income), which includes items such as interest, dividends, royalties and gains from the sale of property held for investment. Portfolio income, expenses, gains, and losses are excluded from the determination of net income or loss from a passive activity. For example, interest income earned by Company funds held in a bank account, or other interest-bearing instrument pending use in Company operations will be considered portfolio income, and when allocated, pro rata, among the Investors, it will not be offset by “passive” deductions, even though the passive deductions are generated by the Company.
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OPENING NIGHT ENTERPRISES, LLC
FINANCIAL STATEMENTS
DECEMBER 31, 2017
(AUDITED)
Cashuk, Wiseman, Goldberg, Birnbaum, & Salem, LLP Certified Public Accountants
|
3333 Camino Del Rio South • Suite 230 • San Diego, CA 92108-3808 • P (619) 563-0145 • F (619) 563-9584 • www.cwgcpa.com
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OPENING NIGHT ENTERPRISES, LLC
TABLE OF CONTENTS
December 31, 2017
PAGE | |
Independent Auditors’ Report | 50,51 |
Balance Sheet | 52 |
Statement of Income | 53 |
Statement of Members’ Equity | 54 |
Statement of Cash Flows | 55 |
Notes to the Financial Statements | 56-58 |
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
Opening Night Enterprises – Offering Circular | 49 |
Certified Public Accountants | ||
PARTNERS Richard A. Goldberg, CPA Ma. Lolita Cremat, CPA | Office manager Heather Peltier |
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Members of
Opening Night Enterprises, LLC
We have audited the accompanying financial statements of Opening Night Enterprises, LLC (a California limited liability company), which comprise the balance sheet as of December 31, 2017, and the related statement of income, member’s equity and cash flows for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3333 Camino Del Rio South | Suite 230 | San Diego, CA 92108-3808 | P (619) 563-0145 | F (619) 563-9584 | www.cwgcpa.com
Opening Night Enterprises – Offering Circular | 50 |
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Opening Night Enterprises, LLC as of December 31, 2017, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
CASHUK, WISEMAN, GOLDBERG, BIRNBAUM AND SALEM, LLP
San Diego, California
March 6, 2019
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OPENING NIGHT ENTERPRISES, LLC
BALANCE SHEET
December 31, 2017
ASSETS | ||||
CURRENT ASSETS | ||||
Cash and Cash Equivalents (Note A) | $ | 1,172 | ||
TOTAL ASSETS | $ | 1,172 | ||
LIABILITIES AND MEMBERS’ EQUITY | ||||
CURRENT LIABILITIES | ||||
Accrued Expenses | $ | 750 | ||
Income Tax Payable (Note B) | 800 | |||
TOTAL LIABILITIES | 1,550 | |||
MEMBERS’ EQUITY (DEFICIT) | (378 | ) | ||
TOTAL LIABILITIES AND MEMBERS’ EQUITY | $ | 1,172 |
The accompanying notes are an integral part of these financial statements.
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
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OPENING NIGHT ENTERPRISES, LLC
STATEMENT OF INCOME
For The Year Ended December 31, 2017
REVENUES | $ | - | ||
EXPENSES | ||||
General & Administrative | 218 | |||
Professional Fees-Legal | 7,442 | |||
Professional Fees-Other | 1,500 | |||
TOTAL EXPENSES | 9,160 | |||
INCOME (LOSS) BEFORE TAXES | (9,160 | ) | ||
Income Tax Expense (Note B) | 800 | |||
NET LOSS | $ | (9,960 | ) |
The accompanying notes are an integral part of these financial statements.
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
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OPENING NIGHT ENTERPRISES, LLC
STATEMENT OF MEMBERS EQUITY
For The Year Ended December 31, 2017
Beginning Balance, January 1, 2017 | $ | - | ||
Contributions | 9,582 | |||
Distributions | - | |||
Net Income (Loss) | (9,960 | ) | ||
Ending Balance, December 31, 2017 | $ | (378 | ) |
The accompanying notes are an integral part of these financial statements.
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
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OPENING NIGHT ENTERPRISES, LLC
STATEMENT OF CASH FLOWS
For The Year Ended December 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net Loss | $ | (9,960 | ) | |
Adjustments to Reconcile Net Income to Net Cash | ||||
Cash Provided(Used) by Changes in | ||||
Operating Assets and Liabilities: | ||||
Accrued Expenses | 750 | |||
Income Tax Payable | 800 | |||
CASH USED FOR OPERATING ACTIVITIES | (8,410 | ) | ||
FINANCING ACTIVITIES | ||||
Member’s Contribution | 9,582 | |||
INCREASE IN CASH AND CASH EQUIVALENTS | $ | 1,172 | ||
Cash and Cash Equivalents at Beginning of Period | - | |||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,172 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Income Taxes Paid | $ | - | ||
Interest Expense | - |
The accompanying notes are an integral part of these financial statements.
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
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OPENING NIGHT ENTERPRISES, LLC
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2017
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1. | Opening Night Enterprises, LLC (the Company) was formed under the laws of the State of California on December 12, 2016 and started operations on January 1, 2017. The Company has adopted a December 31 calendar year end for reporting requirements. |
2. | The Company was formed to create television programs that promote musical theater entertainment. The Company aims to blend television and certain mobile platforms with the musical theater industry, develop undiscovered creative teams and generate revenue in both television and live on stage realms. |
3. | In general, revenue is recognized by the Company based on the public performance data for musical theater presentation and as services are performed for production costs. |
4. | Cash & Cash Equivalents for purposes of the statement of cash flows, include cash on hand, cash in checking and savings accounts with banks. All short-term debt securities with a maturity of three months or less are considered cash equivalents. |
5. | Use of Estimates-The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. |
6. | Leases that meet the criteria for capitalization are classified as capital leases. Leases that do not meet such criteria are classified as operating leases and related rentals are charged to expense as incurred. As of December 31, 2017, there is no such leases. |
7. | Concentration of Cash and Credit Risk-The Company maintains corporate cash balances which, at times, may exceed federally insured limits. Management believes it is not exposed to any significant risk on its cash balances. At December 31, 2017, the Company has no uninsured cash balances. |
8. | Advertising Costs are expensed in the year incurred. The Company incurred no advertising expense in the period ended December 31, 2017. |
9. | Fair Value of Financial Instruments-Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820,“Fair Value Measurements and Disclosures”,defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. |
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
Opening Night Enterprises – Offering Circular | 56 |
OPENING NIGHT ENTERPRISES, LLC
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2017
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CON’T:
Cash and Cash Equivalents, Accrued Liabilities and Other Payables-The carrying amounts reported in the balance sheets for these items are a reasonable estimate of fair value.
NOTE B-INCOME TAXES:
Opening Night Enterprises, LLC is treated as a partnership for federal and state income tax purposes, with income taxes payable personally by the members. Accordingly, no provision has been made in these financial statements for federal income taxes for the Company. The State of California imposes a $800 minimum tax.
As a limited liability company, each member’s liability is limited to amounts reflected in their respective member equity accounts in accordance with the Operating Agreement. The income allocable to each member is subject to examination by federal and state taxing authorities. In the event of an examination of the income tax returns, the tax liability of the members could be changed if an adjustment in the income is ultimately determined by the taxing authorities.
Certain transactions of the Company may be subject to accounting methods for income tax purposes that differ significantly from the accounting methods used in preparing the financial statements in accordance with generally accepted accounting principles. Accordingly, the taxable income of the Company reported for income tax purposes may differ from net income in these financial statements.
The Company has adopted FASB ASC 740-10 regarding accounting for uncertain income tax positions. Management is not aware of any tax positions that are more likely than not to change in the next 12 months, or that would sustain an examination by applicable taxing authorities.
The Company recognizes penalties and interest arising from uncertain tax positions as incurred in the statement of income and comprehensive income, which are none for the period ended December 31, 2017.
The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.
NOTE C-RETIREMENT PLAN:
The Company currently does not sponsor a retirement plan for its employees.
NOTE D-COMMITMENTS AND CONTINGENCIES:
As of the date of the financial statements, the Company has not signed office facility leases.
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
Opening Night Enterprises – Offering Circular | 57 |
OPENING NIGHT ENTERPRISES, LLC
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2017
NOTE E-SUBSEQUENT EVENT:
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through March 6, 2019, the date the financial statements were available to be issued. There were no subsequent events that provide additional evidence with respect to conditions that existed at the balance sheet date that affect the estimates inherent in the process of preparing the financial statements and require adjustment. There were also no events that provided evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date that would have no direct effect on the financial statements but would require disclosure.
NOTE F-FAIR VALUE MEASUREMENTS:
FASB ASC Topic 820 specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with FASB ASC Topic 820, the following summarizes the fair value hierarchy:
Level 1 Inputs—Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.
Level 2 Inputs—Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3 Inputs—Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.
FASB ASC Topic 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
As of December 31, 2017, there were no assets and liabilities measured at fair value.
Certified Public Accountants Telephone (619) 563-0145 Fax (619) 563-9584 • www.cwgcpa.com |
Opening Night Enterprises – Offering Circular | 58 |
OPENING NIGHT ENTERPRISES, LLC
INTERIM BALANCE SHEET
SEPTEMBER 30, 2018
Opening Night Enterprises – Offering Circular | 59 |
OPENING NIGHT ENTERPRISES, LLC BALANCE SHEET
September 30, 2018
ASSETS | ||||
CURRENT ASSETS | �� | |||
Cash and Cash Equivalents | $ | 4,136 | ||
TOTAL ASSETS | $ | 4,136 | ||
LIABILITIES AND MEMBERS' EQUITY | ||||
CURRENT LIABILITIES | ||||
Accrued Expenses | $ | 456 | ||
Income Tax Payable | 800 | |||
TOTAL LIABILITIES | 1,256 | |||
MEMBERS' EQUITY | 2880 | |||
TOTAL LIABILITIES AND MEMBERS' EQUITY | $ | 4,136 |
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
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OPENING NIGHT ENTERPRISES, LLC
STATEMENT OF INCOME
Beginning January 1, 2018 and ending September 30, 2018
REVENUES | $ | |||
EXPENSES | ||||
General & Administrative | 816 | |||
Professional Fees-Legal | 3,056 | |||
Professional Fees-Other | 1,245 | |||
TOTAL EXPENSES | 5,117 | |||
INCOME (LOSS) BEFORE TAXES | (5,117 | ) | ||
Income Tax Expense | 800 | |||
NET LOSS | $ | (5,917 | ) |
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
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OPENING NIGHT ENTERPRISES, LLC
STATEMENT OF MEMBERS EQUITY
Beginning January 1, 2018 and ending September 30, 2018
Beginning Balance, January 1, 2018 | (378 | ) | ||
Contributions | 9,175 | |||
Distributions | ||||
Net Income (Loss) | (5,917 | ) | ||
Ending Balance, September 30, 2018 | $ | 2,880 |
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
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OPENING NIGHT ENTERPRISES LLC
STATEMENT OF CASH FLOWS
Beginning January 1, 2018 and ending September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net Loss | $ | (5,917 | ) | |
Adjustments to Reconcile Net Income to Net Cash | ||||
Cash Provided (Used) by Changes in | ||||
Operating Assets and Liabilities: | ||||
Accrued Expenses | 456 | |||
Income Tax Payable | 800 | |||
CASH USED FOR OPERATING ACTIVITIES | (4661 | ) | ||
FINANCING ACTIVITIES | ||||
Member's Contribution | 9,175 | |||
INCREASE IN CASH AND CASH EQUIVALENTS | 4514 | |||
Cash and Cash Equivalents at Beginning of Period | (378 | ) | ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 4,136 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Income Taxes Paid | $ | |||
Interest Expense |
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
Opening Night Enterprises – Offering Circular | 63 |
OPENING NIGHT ENTERPRISES LLC
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2018
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1. | Opening Night Enterprises, LLC (the Company) was formed under the laws of the State of California on December 12, 2016 and started operations onJanuary1, 2017. The Company has adopted a December 31 calendar year end for reporting requirements. |
2. | The Company was formed to create television programs that promote musical theater entertainment. The Company aims to blend television and certain mobile platforms with the musical theater industry, develop undiscovered creative teams and generate revenue in both television and live on stage realms. |
3. | In general, revenue is recognized by the Company based on the public performance data for musical theater presentation and as services are performed for production costs. |
4. | Cash & Cash Equivalentsfor purposes of the statement of cash flows, include cash on hand, cash in checking and savings accounts with banks. All short-term debt securities with a maturity of three months or less are considered cash equivalents. |
5. | Use of Estimates-The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. |
6. | Leasesthat meet the criteria for capitalization are classified as capital leases. Leases that do not meet such criteria are classified as operating leases and related rentals are charged to expense as incurred. As of September 30, 2018, there is no such leases. |
7. | Concentration of Cash and Credit Risk-The Company maintains corporate cash balances which, at times, may exceed federally insured limits. Management believes it is not exposed to any significant risk on its cash balances. At September 30, 2018, the Company has no uninsured cash balances. |
8. | Advertising Costsare expensed in the year incurred. The Company incurred no advertising expense as of September 30, 2018. |
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
Opening Night Enterprises – Offering Circular | 64 |
OPENING NIGHT ENTERPRISES, LLC
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2018
9. | Fair Value of Financial Instruments-Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, "Fair Value Measurements and Disclosures", defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. |
10. | Cash and Cash Equivalents, Accrued Liabilities and Other Payables-The carrying amounts reported in the balance sheets for these items are a reasonable estimate of fair value. |
NOTE B-INCOME TAXES:
Opening Night Enterprises, LLC is treated as a partnership for federal and state income tax purposes, with income taxes payable personally by the members. Accordingly, no provision has been made in these financial statements for federal income taxes for the Company. The State of California imposes a $800 minimum tax.
As a limited liability company, each member's liability is limited to amounts reflected in their respective member equity accounts in accordance with the Operating Agreement. The income allocable to each member is subject to examination by federal and state taxing authorities. In the event of an examination of the income tax returns, the tax liability of the members could be changed if an adjustment in the income is ultimately determined by the taxing authorities.
Certain transactions of the Company may be subject to accounting methods for income tax purposes that differ significantly from the accounting methods used in preparing the financial statements in accordance with generally accepted accounting principles. Accordingly, the taxable income of the Company reported for incometaxpurposes may differ from net income in these financial statements.
The Company has adopted FASB ASC 740-10 regarding accounting for uncertain income tax positions. Management is not aware of any tax positions that are more likely than not to change in the next 12 months, or that would sustain an examination by applicable taxing authorities.
The Company recognizes penalties and interest arising from uncertain tax positions as incurred in the statement of income and comprehensive income, which are none as of September 30, 2018.
The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
Opening Night Enterprises – Offering Circular | 65 |
OPENING NIGHT ENTERPRISES, LLC
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2018
NOTE C-RETIREMENT PLAN:
The Company currently does not sponsor a retirement plan for its employees
NOTE D-COMMITMENTS AND CONTINGENCIES:
As of the date of the financial statements, the Company has not signed office facility leases.
NOTE E-FAIR VALUE MEASUREMENTS:
FASB ASC Topic 820 specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with FASB ASC Topic 820, the following Summarizes the fair value hierarchy:
Level 1 Inputs-Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.
Level 2 Inputs-Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3 Inputs-Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.
FASB ASC Topic 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs
As of September 30, 2018 there were no assets and liabilities measured at fair value.
The accompanying notes are an integral part of these financial statements.
No assurance is provided as this is an unaudited financial statement.
Opening Night Enterprises – Offering Circular | 66 |
OPENING NIGHT ENTERPRISES, LLC
January 3, 2019
John Dana Brown, Esq.
Attorney-Advisor
Office of Transportation and Leisure
Securities and Exchange Commission
Washington, D.C. 20549
Dear Mr. Brown:
Thank you for your letter of November 14, 2018 regarding our Amendment No. 4 of Offering Statement, File No. 024-10712.
In response to Item 5 of your letter, may this letter serve as notification to you that in the opinion of management, all adjustments necessary have been made in order to ensure that the interim financial statements are not misleading.
We look forward to satisfying these remaining comments and moving forward as soon as possible with the qualification of our filing.
We appreciate your assistance in our efforts.
Sincerely,
/s/ CHARLES JONES II
_________________________
Charles Jones II
Managing Member and Chief Executive Officer
80 West Sierra Madre Blvd., Suite 141, Sierra Madre, CA 91024 | 626.355.1049
Opening Night Enterprises – Offering Circular | 67 |
INDEX TO EXHIBITS | |
Exhibit 1A-2A * | Articles of Organization – Opening Night Enterprises, LLC (California) |
Exhibit 1A-2B ** | Operating Agreement – Opening Night Enterprises, LLC |
Exhibit 1A-4 * | Subscription Agreement with Attached Investor Questionnaire |
Exhibit 1A-6 *** | JumpStart Selling Agreement |
Exhibit 1A-8 *** | Escrow Agreement with PrimeTrust |
Exhibit 1A-11 ^ | Auditor Consent Letter for Use of Incorporated Audit Report |
Exhibit 1A-12 * | Legal Opinion Letter of Feldman, Golinski, Reedy + Ben-Zvi, PLLC |
^ | Provided herewith. |
* | Previously filed as Exhibits to the Form 1-A filed on December 29, 2017 (File No. 024-10712). |
** | Previously filed as Exhibit to the Form 1-A/A Amendment No. 3 filed on April 19, 2018 (File No. 024-10712). |
*** | Previously filed as Exhibit to the Form 1-A/A Amendment No. 5 filed on January 23, 2019 (File No. 024-10712). |
Opening Night Enterprises – Offering Circular | 68 |
Pursuant to the requirements of the Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sierra Madre, State of California, on March 11, 2019 .
Opening Night Enterprises, LLC | ||||||
By: | /s/ CHARLES JONES II | |||||
Name: | Charles Jones II | |||||
Title: | Managing Member and Chief Executive Officer |
Name | Title | Date | ||
/s/ CHARLES JONES II | Managing Member, Chief Executive Officer (Principal Executive Officer) and Chairman of the Board | March 11, 2019 | ||
Charles Jones II | ||||
/s/ CHARLES JONES II | Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) | March 11, 2019 | ||
Charles Jones II |
Opening Night Enterprises – Offering Circular | 69 |