# EDGAR Filing Document

**Accession Number:** 0001674163
**File Stem:** 0001644600-23-000016
**Filing Date:** 2023-1
**Character Count:** 415019
**Document Hash:** fb80dd6ae35889fafb929f526f75efc4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001644600-23-000016.hdr.sgml**: 20230126

**ACCESSION NUMBER**: 0001644600-23-000016

**CONFORMED SUBMISSION TYPE**: C

**PUBLIC DOCUMENT COUNT**: 9

**FILED AS OF DATE**: 20230126

**DATE AS OF CHANGE**: 20230126

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Legion M Entertainment, Inc.
- **CENTRAL INDEX KEY:** 0001674163
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812]
- **IRS NUMBER:** 811996711
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** C
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-31683
- **FILM NUMBER:** 23557632

**BUSINESS ADDRESS:**
- **STREET 1:** 1801 CENTURY PARK EAST 24TH FLOOR
- **CITY:** LOS ANGELES
- **STATE:** CA
- **ZIP:** 90067
- **BUSINESS PHONE:** 415 371 9632

**MAIL ADDRESS:**
- **STREET 1:** 1801 CENTURY PARK EAST 24TH FLOOR
- **CITY:** LOS ANGELES
- **STATE:** CA
- **ZIP:** 90067

### Attached PDF Documents

**Attachment 1:** `LegionMFormC.pdf`

PART II

OFFERING MEMORANDUM DATED JANUARY 26, 2023

![img-0.jpeg](img-0.jpeg)

LEGION M ENTERTAINMENT, INC.
1801 Century Park East, 24th Floor, Los Angeles, CA 90067
www.legionm.com

**William Shatner Documentary I Interests Representing**
**Up to $650,000 of Shatner Shares**

**Minimum Investment Amount: $100**

Legion M Entertainment, Inc. ("Legion M," "the company," "we," or "us"), is offering up to $750,000 worth of securities called "Shatner Shares," which will give investors the right to receive a portion of the Net Picture Revenue generated by the documentary film "You Can Call Me Bill" ("The Picture"). $100,000 of investment will be made through a Regulation D offering. $650,000 of investment will be made in reliance on Regulation Crowdfunding ("Regulation CF offering") through William Shatner Documentary I (the "SPV"), a series of Wefunder SPV, LLC, a Delaware limited liability company (the "LLC") and a special purpose investment vehicle exempt from registration under the Investment Company Act pursuant to Rule 270.3a-9 promulgated under that Act. The SPV will use the funds received in this offering to purchase an equivalent amount of Shatner Shares, which it will hold on behalf of the investors in this offering. The SPV has no purpose other than to hold the Shatner Shares issued by the company and pass through the rights related to the Shatner Shares or the "Securities." For more detail regarding the Securities see "Securities Being Offered."

The minimum target amount under this Regulation CF offering is $50,000 (the "Target Amount"). The company must reach its Target Amount of $50,000 by April 30, 2023. Unless the company raises at least the Target Amount of $50,000 under the Regulation CF offering by April 30, 2023, no Shatner Shares will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.

Investors in this offering will be purchasing the right to receive a portion of the Net Picture Revenue generated by The Picture (see "Securities Being Offered"). This is not a sale of capital stock representing an ownership stake in Legion M. All proceeds from this offering will be used to pay for expenses outlined in the budget and/or to repay Legion M for the expenses that have already been paid for ("Budgeted Expenses") related to the production, marketing, and distribution of The Picture as well as the legal, accounting, marketing, and platform fees related to this offering. The SPV does not charge any fees to investors, nor does it add any expenses to be deducted in the

4

calculation of Net Picture Revenue. For important information regarding the distribution of Net Picture Revenue to investors in this offering, see “Securities Being Offered” and “Risk Factors.”

Investment commitments may be accepted or rejected by the company, in its sole and absolute discretion. The company has the right to cancel or rescind its offer to sell the Securities at any time and for any reason. The rights and obligations of any purchasers of the Securities (“Investors” or “you”) must complete the purchase process through our intermediary, Wefunder Portal LLC (the “Intermediary”). All committed funds will be held in escrow with Silicon Valley Bank (the “Escrow Agent”) until the Target Offering Amount has been met or exceeded and one or more closings occur. You may cancel an investment commitment until up to 48 hours prior to the Offering Deadline, or such earlier time as the company designates, pursuant to Regulation CF, using the cancellation mechanism provided by the Intermediary. The Intermediary has the ability to reject any investment commitment and may cancel or rescind the company’s offer to sell the Securities at any time for any reason. The company will also conduct a concurrent offering in reliance on Rule 506(c) of Regulation D on the same terms as this offering.

**A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.**

In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.

The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.

These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

This disclosure document contains forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to the company’s management. When used in this disclosure document and the company offering materials, the words “estimate”, “project”, “believe”, “anticipate”, “intend”, “expect”, and similar expressions are intended to identify forward-looking statements. These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties that could cause the company’s action results to differ materially from those contained in the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements to reflect events or circumstances after such state or to reflect the occurrence of unanticipated events.

*In the event that we become a reporting company under the Securities Exchange Act of 1934, we intend to take advantage of the provisions that relate to “Emerging Growth Companies” under the JOBS Act of 2012, including electing to delay compliance with certain new and revised accounting standards under the Sarbanes-Oxley Act of 2002.*

5

# LEGION M

Legion M is an entertainment company formed on March 4, 2016, under the laws of Delaware as a C corporation. Our business plan is to partner with creators and other entertainment companies -- from independent filmmakers to large Hollywood studios and distributors -- to develop, produce, distribute, market, finance, and monetize entertainment content including movies, television shows, virtual reality, digital content, events, and more. In this sense, we are like thousands of other entertainment companies around the world.

We believe that what makes Legion M a different type of entertainment company is that Legion M has been built from the ground up to be owned by fans rather than Venture Capitalists or Wall Street investors. Legion M has and continues to take advantage of historic new equity crowdfunding laws that allow the public to invest in our company, including from the earliest stages of our development. We believe being owned by a large community of fans gives us competitive advantages that could ultimately make us one of the most influential companies in Hollywood.

# THIS OFFERING

While Legion M is a company that has been funded using equity crowdfunding, this offering is NOT for equity (shares) in Legion M. Instead, investors in this offering will be purchasing the right to receive a portion of the Net Picture Revenue, defined in 'Securities Being Offered,' generated by a specific Legion M project, The Picture, which is described in detail below. The funds raised by this offering will go exclusively to the Budgeted Expenses of The Picture, and the returns to investors of this offering (if any) will come exclusively from Net Picture Revenue generated by The Picture.

Though you will not own equity in Legion M it is important that you know about Legion M to evaluate your investment. If Legion M were to fail as a company, it could jeopardize your ability to collect Net Picture Revenue related to this project. For that reason, we urge you to consider all the risk factors listed in this offering document, including those related to Legion M as a company, and ask yourself questions like the following:

- Are they financially solvent, and will they remain so long enough to distribute revenue returned by the project?

Additional information about Legion M, including related to its business, financial information and capital structure can be found in Appendix A - Legion M. In addition to this filing and the annual report under Regulation CF, Legion M is required to make filings under Regulation A. All these filings will be available on the SEC's EDGAR filing system. You should read all the available information before investing. See 'Regulatory Information - Ongoing Reporting' below.

# THE PICTURE - 'YOU CAN CALL ME BILL'

In June of 2022 Legion M announced they had partnered with the award-winning team at Exhibit A Pictures (*Leap of Faith: William Friedkin on The Exorcist, Memory: The Origins of Alien, 78/52: Hitchcock's Shower Scene*) to produce a documentary about William Shatner, referred to in this offering as The Picture.

Much of the original footage for The Picture was shot with Mr. Shatner on a soundstage in Laurel Canyon, CA in May of 2022. Additional footage was captured at various other locations, including San Diego Comic Con in July of 2022. In addition to the original footage shot exclusively for The Picture, the Exhibit A team also used a great deal of clips from film and TV projects spanning Mr. Shatner's entire career.

The terms of The Picture are dictated by contracts between Legion M Entertainment Inc, Exhibit A Pictures, and Melis Corp, which is a corporation representing William Shatner.

6

In June of 2022 Legion M also announced that The Picture would be financed by fans via an equity crowdfunding offering. As a company that's owned by fans, Legion M has endeavored to create "Fan First Financing" with terms that are designed to be both easy to understand and favorable for small investors.

In November of 2022 a rough cut of The Picture was completed and submitted to film festivals. In December of 2022 Legion M entered discussions with a sales agent that, pending a signed agreement, will represent the film throughout the sales process. The Picture is expected to premier in Q1 of 2023, with a final public release date that will be determined by the distributor.

### Distribution of The Picture

How The Picture is distributed will impact the type of revenues it generates. Potential distribution channels include, but are not limited to:

- Theatrical box office;
- VOD platforms (e.g., iTunes, Amazon, etc.);
- Streaming platforms (e.g., Netflix, Hulu, etc.);
- Advertising supported channels and VOD platforms (e.g., Tubi, Pluto, etc.);
- DVDs and Blu-Rays;
- Secondary distribution windows, such as television rights; and
- Other partners licensing The Picture (e.g., airlines, etc.).

See also "Risk Factors - Risks Related to The Picture" and "Securities Being Offered - Distribution of Revenue."

7

## Due Diligence

Due diligence by CrowdCheck, Inc.

![img-1.jpeg](img-1.jpeg)

## RISK FACTORS

The SEC requires Legion M to identify risks that are specific to its business and its financial condition. Legion M is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

### *Risk Related to The Picture*

**Investors in this offering will be purchasing a right to receive a pro rata distribution of the Net Picture Revenue generated by The Picture, which is a highly risky investment and may result in the total loss of the investment.** The company will finance, produce and exploit The Picture and the ancillary rights therein held by the company, (i) in such ventures the risk of loss is high in comparison with the prospects for any profit, and that therefore investment in The Picture is suitable only for those investors who do not require liquidity in their investment; (ii) the production of The Picture by the company is an entirely new and speculative venture and it is impossible to project or predict whether the investment will result in a gain or loss to the investors, and therefore **ANY POTENTIAL INVESTOR PARTY TO THE AGREEMENT SHOULD NOT INVEST IN THE PICTURE UNLESS SUCH PARTY IS PREPARED FOR THE POSSIBILITY OF TOTAL LOSS OF THE INVESTMENT;** (iii) the success of a film in theatrical distribution, television, home video and other ancillary markets is dependent upon public taste which is unpredictable and susceptible to change; (iv) the success of a film may also be significantly affected by the number and popularity of other films being distributed, therefore, the success of a motion picture is impossible to predict and absolutely no assumptions should be made respecting the ultimate economic results which may be realized by The Picture.

**This investment is speculative due to the nature of the film and entertainment industry.** The business of the production and exploitation of motion pictures is highly speculative and has historically involved substantial risks. The costs to produce a motion picture are often miscalculated and may be increased by factors beyond the control of its producer, resulting in inability to complete production which would result in abandonment of the project and a total loss of all funds provided therefore. The ultimate profitability of any motion picture depends upon its audience appeal in relation to its cost of production and distribution. Audience appeal, in turn, depends upon unpredictable critical reviews and changeable public taste, among other things, which cannot be readily ascertained in advance. Based upon available information, a majority of completed motion pictures fail to generate sufficient revenues to recover their cost of production and distribution. Accordingly, there can be no assurance that Company will exploit The Picture so as to enable Company to recoup all or any portion of your Investment or to yield a profit on your Investment. Furthermore, until the completion of post- production and the sale of The Picture to a distributor, it is unlikely that Company will derive any revenues from The Picture. In addition, Company cannot predict the timing or amount of revenues, if any, it may derive from the exploitation of The Picture.

8

**There can be no assurance that The Picture will generate any revenue.** No assurance can be made, and no representation, warranty, covenant or agreement is made, that the project being developed hereunder will generate revenue sufficient to distribute cash to Investor and further. Investor has no assurance of receiving a return of its investment, or any profit in excess of the investment. Investor has been advised to seek independent legal counsel before making the Investment commitment and fully understands that there is an extremely high risk of loss associated with making the Investment and can bear such loss. Investor has relied and will rely solely on its own advisors and/or investor's internal personnel with knowledge and expertise qualifying them to analyze and evaluate the transaction herein contemplated.

**We will use the proceeds from this offering to pay expenses related to the production and distribution of The Picture, including paying back money loaned to the production by Legion M, prior to any stream of revenue being generated.** To date the company has paid approximately $260,000 in expenses related to production of The Picture. We estimate total expenses, including those related to marketing and distribution of The Picture plus legal, accounting, administrative, platform and marketing costs of this offering, will amount to $750,000 once post-production has been completed. The proceeds from this offering will be used to pay back Legion M and to pay any remaining expenses related to production of The Picture. Investors in this offering will have the right to receive a pro rata portion of any revenue generated by The Picture, but there cannot be any guarantee that The Picture will succeed in generating any revenue. Therefore, investors in this offering risk losing the full amount of their investment. For details regarding our Budgeted Expenses, please see 'Use of Proceeds.'

**Other stakeholders will be paid from the Gross Picture Revenue generated by The Picture before investors will be entitled to receive any Net Picture Revenue.** It is customary in the film and entertainment industry for certain stakeholders to receive payment of fees and other costs and expenses related to the production and distribution of motion pictures. While some stakeholders (Legion M and William Shatner) are deferring fees, other partners and stakeholders will be paid prior to investors in this offering receiving any revenue. For details, see 'Description of Securities Being Offered and Rights of the Securities of the Company - SPV - Revenue Distributions.' See also the Subscription Agreement included with this offering statement as Appendix B.

**Motion picture production involves a number of significant risks that could delay or prevent completion of the Picture.** There are significant risks involved in the production of any motion picture, many of which may materially delay completion of The Picture or make completion impossible. If The Picture is not completed, no revenues will be derived from The Picture. Such risks include, but are not limited to, production costs exceeding available funds, labor disputes, death or disability of key talent or other key personnel, equipment difficulties, destruction of completed film negatives or unanticipated adverse weather conditions. The occurrence of any such event may cause delays and increase production costs and may have a material adverse effect upon the Investment. These or similar events are beyond the control of Company. To the extent that contributions to the capital of Company are insufficient to cover all production costs of The Picture, all such contributions may be lost.

**The Picture is being produced without the coverage of a completion bond.** By investing, investors will acknowledge that The Picture will not be covered by a completion bond and there is no guarantee of completion of The Picture. There are substantial risks associated with film production, including death or disability of key personnel, other factors causing delay, destruction, or malfunction of sets or equipment, the inability of production personnel to comply with budgetary or scheduling requirements and physical destruction or damage to the film itself. Significant difficulties such as these may materially increase the cost of production or may cause the entire project to be abandoned.

**Distribution of motion pictures, such as The Picture, involves substantial risks outside of our control.** Distribution of films requires specialized marketing expertise and considerable financial resources. The company will be dependent on a distributor for this marketing expertise and for providing funds for prints and advertising. Without the participation of a distributor, there is little likelihood that significant revenues from any source will be realized.

9

The participation of a distributor does not, however, guarantee that the distribution will be successful or that substantial revenues will be realized therefrom.

**There is presently no contract with any distributor to distribute The Picture.** The success of The Picture will be dependent upon our ability to complete The Picture, the attractiveness of the final product to a distributor and the distributor's ability to exploit the picture (which may include the distributor's ability to commit substantial sums to promote The Picture successfully). Legion M may not have the financial or business capability to distribute The Picture itself. The gross revenue derived from The Picture is dependent, among other things, upon the interest of distributors and their ability to obtain suitable distribution via theatrical, television, home video, and/or other media, and in selecting proper release dates and appropriate advertising and promotion for The Picture. Legion M has no agreement at this time with any third party for the distribution of The Picture. The negotiation of final distribution agreements, which frequently occurs (if at all) near the time of completion of motion pictures, will have a substantial impact upon the amount of receipts available to us from the exploitation of The Picture. There is no assurance that such negotiations will result in revenues or profits. Furthermore, although Legion M has agreed to use commercially reasonable efforts to cause The Picture to be distributed, there is no assurance that The Picture will be distributed or that such distribution will be profitable. The fact that any distributor derives profits from its distribution of The Picture will not, in turn, assure that investors in this offering, the company or other producers will also derive profits therefrom.

**There are multiple distribution channels for films, and each method of distribution usually has different revenue allocation arrangements.** Technological developments have resulted in the availability of alternative distribution mediums for film entertainment, including expanded pay and cable television and videocassettes, DVDs and digital technologies. These alternative distribution mediums typically have different revenue allocation arrangements from one another and such allocation arrangements often vary over time. Furthermore, these difference distribution channels may also impact the amount of customary 'of the top fees' that are deducted by third parties from revenue before Legion M receives its portion of the revenue, or 'Gross Picture Revenue.' See also 'The Picture - Distribution' and 'Securities Being Offered - Revenue Distribution.'

**We do not have insurance coverage in the event COVID-19 delays production or causes illness on set that results in lawsuits against us.** Investor acknowledges that there is great uncertainty due to COVID-19 and the virus that causes COVID-19, SARS-CoV-2 (for purposes of this section, collectively referred to as '**COVID-19**') and related matters. The parties acknowledge and agree that due to Covid-19, Legion M or the other producers may suspend or terminate production of The Picture. We are unable to secure insurance coverage for any COVID-19 related matter, and in the event we are forced to shut-down production due to a COVID-19 related matter, **IT IS LIKELY THAT INVESTORS WILL SUFFER A COMPLETE LOSS OF INVESTOR'S ENTIRE INVESTMENT.** We are also at further risk due to COVID-19 related matters including the very real possibility that we will not be able to secure the services of necessary cast and/or crew personnel or, if secured, that such persons may become sick and unable to complete their services for the production. In addition, we may be sued by one or more individuals claiming that such person was made sick or otherwise injured (or died) as a result of contracting COVID-19 in connection with the production of The Picture. It is unlikely that Legion M or any of the producers will have any insurance to cover such a claim nor the resources to defend or settle such a claim and, in such event, **IT IS LIKELY THAT INVESTOR WILL SUFFER A COMPLETE LOSS OF INVESTOR'S ENTIRE INVESTMENT.**

**Natural disasters and other events beyond our control could materially adversely affect us.** Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could have a strong negative effect on us and The Picture. Our business operations are subject to interruption by natural disasters, fire, power shortages, pandemics and other events beyond our control and could make it difficult or impossible for us to deliver our services to our customers and could decrease demand for our services. Our business model involves the marketing of entertainment, including movies and other content. To the extent the entertainment industry is impacted by either the ability to create new content (e.g., the

10

halting of productions) or the ability to monetize the content (e.g., theater sales), our business prospects could be severely hampered.

**The success of The Picture is dependent upon the performance of third parties. Even if The Picture is completed there is no assurance that a distributor will agree to release or otherwise distribute the Picture.** No assurance can be made that The Picture will be produced. No assurance can be made that if The Picture is produced, a distributor will agree to release The Picture or that The Picture will otherwise be distributed, or if a distributor agrees to release The Picture, that the release will be on a certain minimum number of screens or backed by a certain minimum amount of advertising, and no representation, warranty or assurance to the contrary has been made. Furthermore, if an agreement is reached with a particular director, actor, distributor or other party whose contractual performance may bear upon the value of the investment made by Investor, no assurance, representation, warranty, or covenant is furnished to Investor that such party shall actually perform as contractually required and no indemnity is furnished to Investor by Company in the event any such party breaches its obligations to the ultimate detriment of Investor. Further thereto, no breach by a third party of an agreement or other duty in connection with The Picture shall be a breach of this Agreement.

**The film and entertainment business is highly competitive.** We intend to engage in a highly competitive business and therefore the investment contains a high degree of risk. Competition is encountered in different phases of the production and exploitation of a motion picture. In the production phase of The Picture, competition may have a material effect on the employment and cost of personnel. After the completion of its production, The Picture will, upon its distribution, be competing with other motion pictures and, indirectly, with other forms of public entertainment. Such competition in the phases of the production and exploitation of The Picture may have a material adverse impact on Investor's Investment. Many companies involved in the production and exploitation of motion pictures have, from time to time, encountered financial difficulties, which reflect the highly competitive character of, and adverse development in, the motion picture industry as well as the unpredictability of public reaction to motion pictures.

**Entertainment projects can be risky, and often budgets run over.** The entertainment industry is generally affected by the same risk factors of other industries but due to its nature, the development, production, distribution and marketing of content can require large capital investments. Developing and monetizing entertainment projects, such as movies and television shows, usually require significant capital investment to fund expenditures on activities such as producing a television pilot, producing or co-producing a movie or creating a virtual reality experience. There is often budget over-run. Even with adequate funding, the project may fail to gain traction with viewers.

**Even if a project is successful, it is likely to take a long time for us to realize profits.** Even if we are involved in a financially successful project, the process of making money and realizing profit in the entertainment business is slow. The time span from the moment a project starts to its completion, release and revenue recognition is substantial and is often measured in years.

**Our company relies on the 'Fair Use' doctrine to use clips in The Project.** This doctrine allows for the use of copyrighted material without permission under certain circumstances. However, the interpretation of the 'Fair Use' doctrine can be subjective and is ultimately determined by the courts. If a court were to find that our use of copyrighted material does not qualify as 'Fair Use,' we could be sued for copyright infringement and be required to pay damages. Further, even if we won or it was just the threat of litigation this could still be time consuming and expensive and further in an image-oriented image damage the perception of our film and potentially limit our ability to successfully monetize it. All of this, could have a negative impact on our financial performance and reputation.

**Public perception is important in the entertainment industry.** In order to continue grow our business, we must maintain credibility and confidence in our long-term financial viability and business prospects among Hollywood creators and producers, our community, investors, and other parties. Although we have no reason to believe that

11

anyone involved in The Picture has done, or will do, anything to cause public outrage or get “cancelled,” there remains a risk that statements made by our partners, or events involving them, even if misinterpreted or inaccurately reported, may result in a negative public reaction and harm our ability to distribute and successfully market The Picture. As a result, the ability of The Picture to raise revenue through ticket sales to the public, streaming deals or other methods of distribution, will be impaired and may result in material adverse impact on revenue. Reputational harm may damage our ability to do any or all of these things. Any derogatory information whether founded or unfounded, against our business, any of our officers, director, employees, or celebrities who are featured in our films and TV shows may harm our business.

**Our documentary film features a star celebrity as a key contributor.** If this celebrity or any member of our team were to engage in behavior or make statements, even if misinterpreted or inaccurately reported, that damages their reputation or results in them being unable to participate in the promotion of the film, it could negatively impact the commercial success of the film and result in a loss of revenue for our company. Additionally, if the film is cancelled or postponed as a result of the celebrity’s actions, we may incur additional costs and lost profits or even a total loss on the project.

### ***Risks Related to Legion M***

**Our auditor has issued a “going concern” opinion.** Legion M’s auditor has issued a “going concern” opinion on our financial statements, which means they are not sure that we will be able to survive as a business without additional financing. Our auditor has previously issued that opinion for our financials in previous years. Legion M was incorporated in March of 2016 and has a history of losses without profits since inception. The fact that we’ve been able to raise enough financing and/or revenue to sufficiently fund our operation for the each of the preceding years since inception (each of which had “going concern” opinions on our financial statements) does not guarantee our ability to raise sufficient financing and/or generate sufficient revenue in the future. We have sustained net losses of $2,939,564 and $2,225,398 in the years ended December 31, 2021 and December 31, 2020, respectively. As of December 31, 2021, the Company has working capital with current assets that exceed current liabilities by $1,207,726, has an accumulated deficit of $14,416,704, and does not have liquid assets to satisfy its expected obligations for the next year without additional finance or revenue. The audit report states that our ability to continue as a going concern for the next twelve months is dependent upon our ability to generate cash from operating activities and/or to raise additional capital to fund our operations. Failure to raise additional capital could have a negative impact on not only our financial condition but also our ability to remain in business.

**Public perception is important in the entertainment industry.** In order to continue grow our business, we must maintain credibility and confidence in our long-term financial viability and business prospects among Hollywood creators and producers, our community, investors, and other parties. Reputational harm may damage our ability to do any or all of these things. Any derogatory information whether founded or unfounded, against our business, any of our officers, director or employees, may harm our business.

**Public perception is important in equity crowdfunding, potentially making Legion M susceptible to negative postings, and false allegations about the Company and its projects.** As a company raising money from the crowd, Legion M’s funding is highly dependent upon investors who get information from a wide variety of sources that rely on user generated content (e.g., social media, Reddit, message boards, blogs, etc.). These sources often have little to no standards for posting, and many of them allow people to post without even requiring a real name. As a result, these mediums can be susceptible to misinformation, disinformation, and campaigns where individuals using bots and/or fake accounts can create the illusion of “social proof.” For instance, Legion M has previously been the subject of negative postings, including misinformation and false allegations, made on multiple social media and investment platforms from one or more individuals controlling multiple fake names/aliases. To the extent the Company continues or becomes the target of a negative PR campaign from one or more individuals, including those using multiple fake accounts and/or spreading false information about the company, the negative publicity may have an adverse impact on the company, its fundraising, its projects, and has the potential to distract management’s attention from the company’s business.

12

**We depend on a small management team and may need to hire more people to be successful.** Our success will greatly depend on the skills, connections and experiences of our three executives, Paul Scanlan, Jeff Annison and Terri Lubaroff. Should any of them discontinue working for Legion M, there is no assurance that Legion M will continue. We will also need to hire creative talents and individuals with a track record of success and with the skills necessary to ensure that we create and sell premium original content. There is no assurance that we will be able to identify, hire and retain the right people for the various key positions.

**We may not be able to protect all our intellectual property.** Our profitability may depend in part on our ability to effectively protect our intellectual property including our trademark and logo, original entertainment content in our projects and our ability to operate without inadvertently infringing on the proprietary rights of others. Theft of our original entertainment content prior to release could adversely affect our revenue. Policing and protecting our intellectual property against piracy and unauthorized use by third parties is time-consuming and expensive and certain countries may not even recognize our intellectual property rights. Any litigation protecting our intellectual property and defending our original content could have a material adverse effect on our business, operating results and financial condition regardless of the outcome of such litigation.

**Our officers control the company, and we currently have no independent directors.** Our three executive officers and directors are currently also our controlling shareholders. This could lead to unintentional subjectivity in matters of corporate governance, especially in matters of compensation and related party transactions. We also do not benefit from the advantages of having any independent directors, including bringing an outside perspective on strategy and control, adding new skills and knowledge that may not be available within Legion M, having extra checks and balances to prevent fraud and produce reliable financial reports.

#### ***Risks Related to the Securities***

**You will not have any voting rights.** By investing in this offering, you will be purchasing membership interests in an SPV that will mirror the rights of the Shatner Shares issued by the company to the SPV. Neither the membership interests nor the Shatner Shares have voting rights or other preferences. Accordingly, holders of William Shatner Documentary I membership interests will not have any influence on the company's management or how it handles The Picture, including whether to sell The Picture.

**You will not have the ability to influence management.** Other than as set forth in this Form C, no investor in this offering will have the right to participate in the management of the business of Legion M or SPV, including related to The Picture. Accordingly, investors should not invest unless they are willing to entrust all aspects of management to Legion M, which includes the right and power to, among other things, abandon The Picture at any time for any reason.

**The offering terms have been set by Legion M's management.** Legion M has set the maximum offering amount to be raised in this offering at $750,000. The minimum amount of investment to participate in this offering is $100. Legion M established that each Shatner Share will be deemed to be one unit for each $10 invested and will entitle the holder to a certain percentage of future revenue streams upon certain conditions. However, for purposes of determining the amount of Net Picture Revenue to be distributed, investors will be entitled to their pro rata share of Net Picture Revenue based upon the percentage amount of their principal investment in The Picture. Terms for this type of security are purely speculative. Our terms have not been validated by any independent third party. It is a question of whether you, the investor, are willing to pay this price for a percentage ownership of in this revenue stream related to The Picture. You should not invest if you disagree with these terms.

**The characteristics of the Shatner Shares, including payment terms, no maturity date, lack of collateral security or guarantee, and lack of liquidity, may not satisfy your investment objectives.** The Shatner Shares may not be a suitable investment for you, and we advise you to consult your investment, tax and other professional financial advisors prior to purchasing Shatner Shares. The characteristics of the Shatner Shares, including the payment terms, lack of collateral security or guarantee, and lack of liquidity, may not satisfy your investment objectives. The

13

Shatner Shares may not be a suitable investment for you based on your ability to withstand a loss of your principal amount invested or other aspects of your financial situation, including your income, net worth, financial needs, investment risk profile, return objectives, investment experience and other factors. Prior to purchasing any Shatner Shares, you should consider your investment allocation with respect to the amount of your contemplated investment in the Shatner Shares in relation to your other investment holdings and the diversity of those holdings.

**Holders of Shatner Shares are exposed to the credit risk of our company.** Shatner Shares are our full and unconditional obligations. If we are unable to make payments required by the terms of the agreements, you will have an unsecured claim against us. Shatner Shares are therefore subject to non-payment by us in the event of our bankruptcy or insolvency. In an insolvency proceeding, we cannot assure you that you will recover any remaining funds. Moreover, your claim may be subordinate to that of any senior creditors and any secured creditors to the extent of the value of their security.

**The Shatner Shares are unsecured obligations.** The Shatner Shares are unsecured general obligations of Legion M. The Shatner Shares will be general unsecured obligations and will rank equally with all of our other unsecured debt unless such debt is senior to or subordinate to the Shatner Shares by their terms. We may issue secured debt in our sole discretion without notice to or consent from the holders of Shatner Shares. Therefore, as unsecured obligations, there is no security to be provided to the holders of the Shatner Shares.

**There is no current market for Legion M's Shatner Shares.** There is no formal marketplace for the resale of the SPV membership interests or the Shatner Shares they mirror. We do not currently have any near-term plans to apply for or otherwise seek trading or quotation of our Shatner Shares on an over-the-counter market. It is hard to predict whether we will ever sell The Picture, in which case the funds generated by the sale will be distributed to Investors in accordance with the Subscription Agreement included with this offering memorandum as Appendix B. Investors should assume that they may not be able to liquidate their investment or pledge their shares as collateral for some time (if ever).

**Any dispute regarding the subscription agreement for this offering will be resolved by arbitration conducted in the State of California, which follow different procedures than in-court litigation and may be more restrictive to shareholders asserting claims than in-court litigation.** The subscription agreement for this offering provides that the sole forum for any dispute arising thereunder will be arbitration in Los Angeles, California. As a result, investors would not be able to pursue litigation in state or federal court for any disputes pertaining to the subscription agreement. Arbitration is intended to be the exclusive means for resolving such disputes, and this provision is intended to apply both to claims made under US federal securities laws, rules and regulations and to claims arising under any other laws. As arbitration provisions in commercial agreements have generally been respected by federal courts and state courts of Delaware, we believe that the arbitration provision in the subscription agreement is enforceable under federal law and the laws of the State of Delaware. Investors cannot waive the company's compliance with federal securities laws and the rules and regulations promulgated thereunder in arbitration. Costs in arbitration proceedings may be higher than those in litigation proceedings, and investors may face limited access to information and other imbalances of resources. This provision can discourage claims against the company because it limits the ability of investors to bring a claim in a judicial forum they find favorable, and limits investors' ability to bring class action lawsuits or seek remedy on a class basis for any disputes arising under the subscription agreement. For details see Subscription Agreement included in this offering memorandum as Appendix B and Investor Agreement available at https://wefunder.com/terms#investor.

**Investors will be subject to federal income tax consequences.** The SPV expects to be treated as a partnership for U.S. federal income tax purposes. Each investor, in determining its U.S. federal income tax liability, will take into account its allocable share of income, gain, loss, deduction and credits of the SPV, without regard to whether it has received distributions from the SPV. Consequently, investors may be liable for income taxes on income allocated to them in a given year in excess of the amount of any distributions they received that year and may be required to pay taxes on their share of the SPV's taxable income using cash from other sources. The consequences to investors of an investment in the SPV are complex. Accordingly, each prospective investor is advised to consult its own tax

14

counsel as to the specific tax consequences of an investment in the SPV. The SPV has not been structured to provide tax benefits to investors, and an investment in the SPV should not be based on the expectation that tax benefits will accrue therefrom.

**This offering involves “rolling closings,” which may mean that earlier investors may not have the benefit of information that later investors have.** Once we meet our target amount for this offering, we may request that WeFunder instruct the escrow agent, Silicon Valley Bank, to disburse offering funds to us. At that point, investors whose subscription agreements have been accepted will become our investors in the SPV. All early-stage companies are subject to a number of risks and uncertainties, and it is not uncommon for material changes to be made to the offering terms, or to companies’ businesses, plans or prospects, sometimes on short notice. When such changes happen during the course of an offering, we must file an amendment to our Form C with the SEC, and investors whose subscriptions have not yet been accepted will have the right to withdraw their subscriptions and get their money back. Investors whose subscriptions have already been accepted, however, will already be investors in the SPV and will have no such rights.

**Investors will have to subscribe to multiple agreements in order to invest in this offering.** In order to invest in this offering, investors must agree to become a party to the Subscription Agreement and the SPV Subscription Agreement, each included as Appendix B and Appendix C, respectively, and the Investor Agreement available at https://wefunder.com/terms#investor.

**Your investment could be illiquid for a long time.** You should be prepared to hold this investment for several years or longer. We do not intend to register the Securities or the underlying Shatner Shares in connection with an initial public offering or as a class under the Exchange Act, and you will have no right to require the Company to do so. You also will not have the right to require Legion M to redeem your Securities. As a result, if you decide to sell your Securities, you may not be able to find a buyer.

**Your Shatner Shares will be subject to transfer restrictions.** In addition to a one-year transfer restriction imposed by Regulation CF, investors will be subject to transfer restrictions imposed by the SPV Subscription Agreement to which they must become a party prior to investing in this offering. The transfer restrictions in the SPV Subscription Agreement do not expire and require investors to obtain written permission from the SPV and Legion M prior to selling or otherwise transferring their Securities. For details see SPV Subscription Agreement included in this offering memorandum as Appendix C.

**The amount raised in this offering may include investments from company insiders or immediate family members.** Officers, directors, executives, and existing owners with a controlling stake in the company (or their immediate family members) may make investments in this offering. Any such investments will be included in the raised amount reflected on the campaign page.

**Using a credit card to purchase shares may impact the return on your investment as well as subject you to other risks inherent in this form of payment.** Investors in this Offering have the option of paying for their investment with a credit card, which is not usual in the traditional investment markets. Transaction fees charged by your credit card company (which can reach 5% of transaction value if considered a cash advance) and interest charged on unpaid card balances (which can reach almost 25% in some states) add to the effective purchase price of the shares you buy and would be in addition to any Wefunder processing fee. See “Plan of Distribution and Selling Shareholders.” The cost of using a credit card may also increase if you do not make the minimum monthly card payments and incur late fees. Using a credit card is a relatively new form of payment for securities and will subject you to other risks inherent in this form of payment, including that, if you fail to make credit card payments (e.g., minimum monthly payments), you risk damaging your credit score and payment by credit card may be more susceptible to abuse than other forms of payment. Moreover, where a third-party payment processor is used, as in this Offering, your recovery options in the case of disputes may be limited. The increased costs due to transaction fees and interest may reduce the return on your investment.

15

The Commission’s Office of Investor Education and Advocacy issued an Investor Alert dated February 14, 2018 entitled: Credit Cards and Investments - A Risky Combination, which explains these and other risks you may want to consider before using a credit card to pay for your investment.

**You will not be investing directly into Legion M or have a direct contractual agreement with them for the revenue share, but into a special purpose vehicle.** Changes to the securities laws that went into effect March 15, 2021, permit us to use a “special purpose vehicle” or “SPV” in this offering. That means that you will invest in William Shatner Documentary I, a series of Wefunder SPV, LLC, the SPV, and with the money you pay, the SPV will buy our Shatner Shares. A condition to using an SPV is that the SPV pass on the same economic and governance rights that are set out in the Shatner Shares. However, it may not always be possible to replicate those rights exactly, because the SPV is an LLC formed under Delaware law, as opposed to a Delaware corporation. This sort of arrangement has not been used for investing prior to the 2021 regulatory changes, and there may be unforeseen risks and complications. You will also be relying on Wefunder Admin, LLC, as the Manager of the SPV, to make sure the SPV complies with Delaware law and functions in accordance with securities law. The structure of the SPV is explained further in “Securities Being Offered”. The SPV will terminate and distribute the securities it holds to you, so that you may hold them directly, in certain circumstances. Again, this has not been done before, so there may be delays, complications and unexpected risks in that process.

**Crowdfunding SPV.** The Securities in this offering will be issued by both Legion M and the SPV. The proceeds from the offering will be received by the SPV and invested immediately in the securities issued by Legion M. The SPV will be the legal owner of the Shatner Shares. Investors in this offering will own membership interests in the SPV. Pursuant to SEC rules, investors will receive the same economic, voting and information rights in the Shatner Shares as if they had invested directly in The Picture.

## DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES

The Company’s executive officers and directors are as follows:

| Name | Position | Age | Term of Office (if indefinite, date appointed) | Approximate hours per week (if part-time)/full-time |
| --- | --- | --- | --- | --- |
| Executive Officers: |  |  |  |  |
| Paul Scanlan | Co-Founder, Chief Executive Officer, Chief Financial Officer and Treasurer | 52 | Appointed to indefinite term of office March 9, 2016 | Full-time |
| Jeff Annison | Co-Founder and President | 51 | Appointed to indefinite term of office March 9, 2016 | Full-time |
| Terri Lubaroff | Chief Operating Officer, Secretary | 50 | Appointed to indefinite term of office Nov. 15, 2017 | Full-time |
| Directors: |  |  |  |  |
| Paul Scanlan | Director | 52 | Appointed to indefinite term of office March 4, 2016 |  |

16

| Jeff Annison | Director | 51 | Appointed to indefinite term of office March 4, 2016 |
| --- | --- | --- | --- |
| Terri Lubaroff | Director | 50 | Appointed to indefinite term of office November 15, 2017. |

#### **Paul Scanlan - Co-founder, Chief Executive Officer, Chief Financial Officer and Treasurer**

Paul Scanlan is Legion M’s Co-Founder and has been the Chief Executive Officer of Legion M since its inception in March 2016. Immediately before that, Mr. Scanlan was Cofounder and President at MobiTV. In 1999, Mr. Scanlan co-founded MobiTV, Inc., a leader in monetizing media outside the living room. From 2007 to 2016, Mr. Scanlan was the President of MobiTV and played a crucial role in MobiTV’s success from a start-up to a market leader in a fast growing space. Mr. Scanlan continues to serve as a director on the MobiTV board. In 2005, Mr. Scanlan and his MobiTV team earned an Emmy Award for Technical Achievement in Advancing Television, and his accomplishments at MobiTV were profiled in 2011 in Tarang Shah’s book, “Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes.” Mr. Scanlan serves as an adjunct lecturer of entrepreneurship for Northwestern Kellogg and earned his Bachelor of Science degree in Radio, TV & Film from the University of Wisconsin at Madison.

#### **Jeff Annison - Cofounder & President**

Jeff Annison is Legion M’s Co-Founder and has been the President of Legion M since its inception in March 2016. In 2009, Mr. Annison co-founded Underground Labs, Inc., a product development studio that created innovative mobile apps and web experiences for customers such as AT&T, Sony Music, Universal Music, Coca Cola, the US Navy, the ACC (Atlantic Coast Conference), SEC (the Southeastern Conference), etc. He also served as Chairman of the New York Rock Exchange (a product of Underground Labs), which allows fans to purchase commemorative shares of individual songs. From 2009 to 2016, he was the Chief Executive Officer of Underground Labs. Immediately prior to founding Underground Labs, Mr. Annison co-founded MobiTV in 1999. From 1999 to 2009, Mr. Annison led MobiTV’s engineering and product development teams, scaling operations from 3 to 300 employees, growing to over 25 million paying subscribers and winning an Emmy Award for Innovation in Television. Prior to 1999, Mr. Annison designed toys for Hasbro and theme park rides for Universal Studios. Mr. Annison earned his Bachelor degree of Science in Mechanical Engineering from University of California, Los Angeles.

#### **Terri Lubaroff - Chief Operating Officer, Secretary**

Terri Lubaroff, Esq. is Chief Operating Officer and Corporate Secretary of Legion M. She started at Legion M as Head of Acquisition and Corporate Secretary in March 2016 and was promoted to COO in November 2017. Prior to joining Legion M, Ms. Lubaroff served as Chief Operating Officer of Meltdown Comics and Collectibles, Meltdown Entertainment, and its tech incubator Meltdown Reactor where she incubated nascent tech start-ups in the entertainment space and oversaw white label activations for companies like Microsoft and Wizards of the Coast. She served in that position from January 2014 through January 2016. Contemporaneously, Ms. Lubaroff maintained her own legal practice, both at the Lubaroff Entertainment Law (November 2013-Sept. 2016) and Lubaroff Mediation (August 2009-Sept. 2016). She also oversaw an unscripted reality series with the SyFy channel. Ms. Lubaroff has been an entrepreneur, a lawyer, a mediator and a TV and Film development executive. She previously ran Humble Journey Films, which had an overall deal at Paramount/CBS where she developed and sold nine TV pilots to networks such as NBC, CBS, BET and VH1, two of which she co-created and co-wrote. Ms. Lubaroff has also worked as a talent and literary manager and as a writer and producer in various capacities, including ghost-writing for various clients. She began her entertainment career as an actor, writer and live event producer and director. A member of the California Bar and the Florida Bar, Terri is a frequent guest speaker for the entertainment industry, most notably at San Diego Comic-Con, and was quoted about TV

17

development in the 2008 book, “Small Screen, Big Picture.” Terri studied theatre performance and directing and law at the University of Florida, with specialized training in mediation and negotiation from Pepperdine University’s School of Law. She is a member of the Television Academy, the Hollywood Radio and Television Society and the Producers Guild of America.

18

# USE OF PROCEEDS

# Minimum $50,000 Raise

If the company raises the minimum offering amount of $50,000, then Wefunder will receive a 7.5% cash commission of $3,750. Legion M will use the remaining $46,250 to reimburse Legion M for expenses already incurred in developing and producing The Picture. After that, Legion M plans to raise additional funds from other investors (including, potentially, Legion M) to fund the remaining Budget of The Picture shown below.

For disclosure regarding risks related to The Picture if we are unable to raise enough funds to complete it, please see “Risk Factors.”

# Maximum Raise of $650,000

If the company raises the maximum amount of $650,000 in this offering, then Wefunder will receive a 7.5% cash commission of $48,750. Legion M will use the remaining $601,250 as follows:

1. Approximately $260,000 will be used to reimburse Legion M for expenses already incurred in developing and producing The Picture.
2. The remaining funds will be used (in conjunction with $100,000 being raised in a concurrent Regulation D offering under the same terms) to fund the remainder of the Budgeted costs listed below.

Please find below our anticipated Budget, including the expenses that have already been paid for (“Budgeted Expenses”), which has also been included in Exhibit 1 to the Financing Agreement.

| Production Budget of Film | $565,101 | 75% |
| --- | --- | --- |
| 3rd Party Hard Costs | $415,101 | 55% |
| Fees to Exhibit A (For production, directing, writing, & cinematography) | $150,000 | 20% |
| Fees tp Legion M | $0 | 0% |
| Fees to William Shatner | $0 | 0% |
| Equity Crowdfunding Expenses | $118,750 | 16% |
| Wefunder Fees | $48,750 | 6.5%* |
| Legal and Accounting Costs | $20,000 | 3% |
| Marketing Costs | $50,000 | 7% |
| Contingency | $66,149 | 9% |
| TOTAL AMOUNT RECEIVED FROM OFFERINGS | $750,000 | 100% |

* Wefunder fees are shown as a percentage of the combined offering. Wefunder charges 7.5% fees on investments made via Regulation CF, and 0% on investments made via Regulation D.

19

Note that any unspent proceeds from The Offering (e.g., leftover contingency and/or savings from expenses that were lower than expected) will be treated as Gross Picture Revenue. See the Subscription Agreement included with this offering memorandum as Appendix B for details.

**The identified uses of proceeds are subject to change at the sole direction of the officers and directors based on the business needs of The Picture.**

20

# FINANCIAL DISCUSSION

## The Picture

Principle photography for The Picture was completed in May of 2022, and in November of 2022 a rough cut was completed and submitted to film festivals. All the expense incurred in the development and production of the film to date (approximately $260,000) have been paid by Legion M, with the understanding amongst the Producers that Legion M would recoup this money (without interest) once funds were raised from fans via this offering.

Note that all of the budgeted expenses are for 3rd party, out-of-pocket costs, and that none of the budgeted expenses include fees or payments of overhead to Legion M or William Shatner.

We have also included a financial discussion of the company, Legion M. The financial discussion relating to Legion M can be found in Attachment A, under 'Financial Discussion.'

21

## SECURITIES BEING OFFERED

*The following descriptions summarize important terms of membership interests representing the Shatner Shares. The Shatner Shares are an investment contract under which investors will receive their pro rata share of net revenue generated by The Picture. The following description is qualified in its entirety by the terms of the Subscription Agreement included in this offering memorandum as Appendix B.*

*For a description of the company's capital stock, you should refer to Appendix A - Legion M - Rights of the Other Securities of the Company.*

***The investment will be made through William Shatner Documentary I (the 'SPV'), a special purpose investment vehicle exempt from registration under the Investment Company Act pursuant to Rule 270.3a-9 promulgated under that Act.***

The securities in this offering will be issued by both the company and the SPV. The proceeds from the offering will be received by the SPV and invested immediately in the securities issued by the company. The SPV will be the legal owner of the Shatner Shares. Investors in this offering will own membership interests in the SPV. Pursuant to SEC rules, investors will receive the same economic, voting and information rights in the Securities (and the Shatner Shares into which they convert) as if they had invested directly with the Company.

### *Revenue Distributions*

Pursuant to the Subscription Agreement, investors in this offering will be entitled their share of revenue received by Legion M, defined as Net Picture Revenue (below). Distributions of Net Picture Revenue will be made as follows:

Legion M will distribute Net Picture Revenue as follows:

1. a. Investors will receive their pro rata share (according to their Percentage Ownership) of one hundred percent (100%) of Net Picture Revenue until the Principal Amount of their investment has been received.
2. b. Thereafter, investors will receive their pro rata share (according to their Percentage Ownership) of thirty-three percent (33%) of the Net Picture Revenue, and the Producers (defined below) will receive the remaining sixty-seven percent (67%).
3. c. Net Picture Revenue will be distributed on a semi-annual (or better) basis commencing approximately one year after commercial release of The Picture, and provided there is at least \$10,000 in Net Picture Revenue for distribution.
4. d. If there is less than \$10,000 in Net Picture Revenue in any given period, that amount will be held in reserve for distribution during the next period in which at least \$10,000 in Net Picture Revenue has accumulated.
5. e. Legion M will distribute the portion of money due to shareholders directly to Wefunder. Wefunder, as manager of the SPV, will then distribute money to individual investors.
6. f. If The Offering is not fully subscribed, investors will receive their pro rata interest as if the round was fully subscribed and Legion M will find one or more other investor(s), potentially including Legion M, to provide funding for the rest of the expenses required for The Picture.
7. g. If Legion M utilizes funds from one or more other investor(s) ('Other Investors'), including Legion M, to raise money for The Picture, such Other Investors will invest on the exact same financial terms as the Investors in The Offering, and shares of Net

22

Revenue will be distributed pari-passu between Other Investors and Investors in The Offering.

Investors will receive annual K-1 tax statements from the SPV.

### *Gross Picture Revenue*

Gross Picture Revenue is defined as all the money (in perpetuity) received by Legion M from exploitation of the Picture. It includes direct revenues from the exploitation of the Picture itself, as well as any ancillary revenues, such as licensing fees from merchandise sales for products derived from The Picture, subject to the limitations and additions listed in the Subscription Agreement included as Appendix B. Note that Gross Picture Revenue gets paid to Legion M after any off the top fees,” deducted by third parties.

Sources of Gross Picture Revenue can vary greatly by the distributor and distribution strategy utilized. Gross Picture Revenue may include amounts paid to Legion M from partners utilizing one or more (or none) of the following means of distribution:

- Theatrical box office;
- VOD platforms (e.g., iTunes, Amazon, etc.);
- Streaming platforms (e.g., Netflix, Hulu, etc.);
- Advertising supported channels and VOD platforms (e.g., Tubi, Pluto, etc.);
- DVDs and Blu-Rays;
- Secondary distribution windows, such as television rights; and
- Other partners licensing The Picture (e.g., airlines, etc.).

**As noted above, Gross Picture Revenue is defined as the revenue actually received by Legion M, which does not include amounts deducted by distribution partners for customary off the top fees, which could include one or more (or none) of the following:**

- Fees and other costs deducted by distributors or other third-parties for expenses, such as marketing expenses related to The Picture;
- Revenue splits deducted by third-parties;
- Fees payable to agents, including sales and collection agents, payable prior to Legion M receiving revenue from The Picture; and
- Any residual holdbacks.

Note that no off the top fees are paid to William Shatner, Legion M, or Exhibit A pictures or any company personnel from those companies.

For more detail, see the Subscription Agreement included as Appendix B. See also “Risk Factors - Risks Related to The Picture -- There are multiple distribution channels for films, and each method of distribution usually has different revenue allocation arrangements.”

### *Net Picture Revenue*

Net Picture Revenue is the revenue available for distribution to investors in this offering after Legion M has paid third-party, out-of-pocket costs and expenses incurred by Legion M when collecting, auditing, and administering monies paid and/or owed to the Legion M from distributors and/or other licensees of The Picture. It also includes expenses related to marketing and delivery of The Picture to distributors, sales agents and festival related expenses. No payments will be made to Legion M personnel except for reimbursement of verifiable, out-of-pocket

23

expenses incurred in connection with the foregoing activities. For more detail, see the terms of our Subscription Agreement included as Appendix B to this offering memorandum.

#### *No Voting Rights*

The SPV Interest and the underlying Shatner Shares do not entitle investors to any voting rights. To the extent holders of the SPV Interests and underlying Shatner Shares are given the opportunity to vote on a matter called to attention by Legion M, the Lead Investor in this offering will have that right to vote pursuant to a proxy granted to Lead Investor. For details, see “Investor Agreement” available at https://wefunder.com/terms#investor.

#### *No Other Preferences or Redemption*

Holders of the Shatner Shares will have no other preferences in the event of dissolution or liquidation, nor any redemption rights.

#### *Transfer Restrictions*

In addition to a one-year transfer restriction imposed by Regulation CF, investors will be subject to transfer restrictions imposed by the SPV Subscription Agreement to which they must become a party prior to investing in this offering. The transfer restrictions in the SPV Subscription Agreement do not expire and require investors to obtain written permission from the SPV and Legion M prior to selling or otherwise transferring their Securities. For details see SPV Subscription Agreement included in this offering memorandum as Appendix C.

### **What it Means to be a Minority Holder**

As an investor in the company’s Shatner Shares, you are purchasing a right to a revenue stream in the Project. You will not have any rights in regard to the corporate actions of the company, including additional issuances of securities, company repurchases of securities, a sale of the company or its significant assets, or company transactions with related parties.

### **Transferability of securities**

For a year, the securities can only be resold:

- To the company;
- To an accredited investor; and
- To a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

The Securities purchased by investors in this offering will be subject to transfer restrictions imposed by the SPV subscription agreement. For details see also “Risk Factors - Your Shatner Shares will be subject to transfer restrictions” and the SPV Subscription Agreement included with this offering memorandum as Appendix C.

24

## How we determined the offering price

The company is offering membership interests representing Shatner Shares, which entitles investors to participate in future revenue streams, if any, that related to The Picture. The company determined the offering price of the securities by reference to the Budgeted Expenses of The Picture.

# REGULATORY INFORMATION

# Disqualification

Neither the company, the SPV, nor any of its officers or managing members are disqualified from relying on Regulation Crowdfunding.

# Annual reports

The company is required to file a report electronically with the SEC annually and post the report on its website no later than 120 days after its fiscal year end (December 31). Once posted, the annual report may be found on the company's website at https://legionm.com/investorrelations.

The company must continue to comply with the ongoing reporting requirements until:

(1) it is required to file reports under Section 13(a) or Section 15(d) of the Exchange Act;
(2) it has filed at least one annual report pursuant to Regulation Crowdfunding and has fewer than three hundred holders of record and has total assets that do not exceed $10,000,000;
(3) it has filed at least three annual reports pursuant to Regulation Crowdfunding;
(4) it or another party repurchases all of the securities issued in reliance on Section 4(a)(6) of the Securities Act, including any payment in full of debt securities or any complete redemption of redeemable securities; or
(5) it liquidates or dissolves its business in accordance with state law.

# Regulation A

Legion M is required to make annual and semi-annual filings with the SEC. We make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. We will make semiannual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months to June 30. We will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising. We will be required to keep making these reports unless we file a Form 1-Z to exit the reporting system, which we will only be able to do if we have less than 300 stockholders of record and have filed at least one Form 1K.

All these filings will be available on the SEC's EDGAR filing system. You should read all the available information before investing.

These filings will relate to Legion M and its results and will only reflect specific information about The Picture to the extent required by applicable accounting principles.

# Relaxed Ongoing Reporting Requirements

If we become a public reporting company in the future, we will be required to publicly report on an ongoing basis as an "emerging growth company" (as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an "emerging

25

growth company", we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not "emerging growth companies", including but not limited to:

- not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
- taking advantage of extensions of time to comply with certain new or revised financial accounting standards;
- being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
- being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

If we become a public reporting company in the future, we expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an "emerging growth company" for up to five years, although if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an "emerging growth company" as of the following December 31.

If we do not become a public reporting company under the Exchange Act for any reason, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for "emerging growth companies" under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semiannual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer's fiscal year, and semiannual reports are due within 90 calendar days after the end of the first six months of the issuer's fiscal year.

In either case, we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not "emerging growth companies", and our stockholders could receive less information than they might expect to receive from more mature public companies.

## Compliance failure

Neither the company nor the Crowdfunding SPV has not previously failed to comply with the requirements of Regulation Crowdfunding.

## INVESTING PROCESS

### Information Regarding Length of Time of Offering

**Investment Cancellations:** Investors will have up to 48 hours prior to the end of the offering period to change their minds and cancel their investment commitments for any reason. Once the offering period is within 48 hours of ending, investors will not be able to cancel for any reason, even if they make a commitment during this period.

**Notifications:** Investors will receive periodic notifications regarding certain events pertaining to this offering, such as the company reaching its offering target, the company making an early closing, the company making material changes to its Form C, and the offering closing at its target date.

**Material Changes:** Material changes to an offering include but are not limited to:

26

A change in minimum offering amount, change in security price, change in management, etc. If an issuing company makes a material change to the offering terms or other information disclosed, including a change to the offering deadline, investors will be given five business days to reconfirm their investment commitment. If investors do not reconfirm, their investment will be cancelled, and the funds will be returned.

**Rolling and Early Closings:** The company may elect to undertake rolling closings, or an early closing after it has received investment interests for its target offering amount. During a rolling closing, those investors that have committed funds will be provided five days' notice prior to acceptance of their subscriptions, release of funds to the company, and issuance of securities to the investors. During this time, the company may continue soliciting investors and receiving additional investment commitments. Investors should note that if investors have already received their securities, they will not be required to reconfirm upon the filing of a material amendment to the Form C. In an early closing, the offering will terminate upon the new target date, which must be at least five days from the date of the notice.

### **Investor Limitations**

Investors are limited in how much they can invest on all crowdfunding offerings during any 12-month period. The limitation on how much they can invest depends on their net worth (excluding the value of their primary residence) and annual income. If either their annual income or net worth is less than $124,000, then during any 12-month period, they can invest up to the greater of either $2,500 or 5% of the greater of their annual income or Net worth. If both their annual income and net worth are equal to or more than $124,000, then during any 12-month period, they can invest up to 10% of annual income or net worth, whichever is greater, but their investments cannot exceed $124,000. If the investor is an 'accredited investor' as defined under Rule 501 of Regulation D under the Securities Act, as amended, no investment limits apply.

### **Updates**

Information regarding updates to the offering and to subscribe can be found here, https://wefunder.com/williamshatnerdocumentary/.

27

**Attachment 2:** `LegionMDiscFinancials.pdf`

Appendix A

# OUR BUSINESS - LEGION M

# Introduction

Legion M is an entertainment company formed on March 4, 2016, under the laws of Delaware as a C corporation. Our business plan is to partner with creators and other entertainment companies -- from independent filmmakers to large Hollywood studios and distributors -- to develop, produce, distribute, market, finance, and monetize entertainment content including movies, television shows, virtual reality, digital content, events, and more. In this sense, we are like thousands of other entertainment companies around the world.

The difference is that Legion M is (to our knowledge) the first entertainment company built from the ground up to be owned by fans. We're taking advantage of historic new equity crowdfunding laws that allow the public to invest in our Company in its earliest stages of development. With Legion M, fans own the Company, fans get behind the scenes and - when we are successful - fans share in the rewards!

We founded Legion M because we saw a once-in-a-lifetime opportunity created by the JOBS Act. Fans hold great power in the entertainment industry. After all, we're the ones who buy the tickets, pay the subscriptions, and decide what to watch. Individually each of us is just a consumer, but when we band together we have undeniable power. And now, thanks to the disruptive new capabilities of equity crowdfunding, we have a first-ever chance to build an entertainment company of our own.

# Competitive Advantage

From franchises and IP to talent and influencers, we believe a BUILT-IN AUDIENCE is one of the most valuable assets in Hollywood. Our goal is to create a company with a built-in audience for everything we do. One that is not focused on sequels and reboots of today's franchises, but instead on finding original new stories and creating the franchises of tomorrow.

By giving people an ownership stake and a voice in the process, we're creating a legion of fans that are both financially and emotionally invested in the success of our projects. The bigger that audience gets, the more powerful it becomes.

We believe a company owned by a Legion of emotionally invested shareholders has a number of intrinsic competitive advantages, including:

- A legion of fans to come out opening night (and bring out all their friends!);
- A legion of evangelists to share on social media and create grassroots buzz;
- A legion of scouts to help find the next big thing;
- A legion of focus group testers to evaluate ideas and harness the "wisdom of the crowd";
- A legion of advocates to provide energy, enthusiasm and excitement that help propel the Company forward;
- A legion of creatives to crowdsource ideas and contribute their talents;
- A legion of fans to help attract the very best talent to our projects.

We believe the result of all this is an ability to reduce risk and improve the odds of success for everything we do. Our long-term goal is to unite one million fans as shareholders of Legion M. If we're successful, this will provide hundreds of millions of dollars to develop content that has one million fans standing behind it. It's an ambitious goal, and one we expect will take many years to achieve. But if we're successful, we believe it could make us one of the most influential companies in Hollywood.

1

## Current Size of the Legion

At 6AM Pacific Time on May 16, 2016 (the day Regulation CF went into effect), Legion M became one of the first companies in history to launch an equity crowdfunding round under Regulation CF, created by the JOBS Act. Since then, we have completed eight rounds of equity crowdfunding, raising over $16 million from more than 35,000 investors via a combination of Regulation A, Regulation CF, and Regulation D.

In addition to allowing fans to invest via equity crowdfunding, we also allow them to join our community by becoming a free member or following us on social media. We do this for several reasons, including the fact that we want to give people the opportunity to “get to know us” before they invest. We also recognize that there are many people who love the idea of a fan-owned company but for some reason cannot or choose not to invest. As a Company whose power comes from the size and strength of its community, we welcome these people with open arms. As of October 2022, we estimate our total community of investors, members, and followers to be over 150,000 people.

## How We Make Money

Entertainment is a complex and rapidly changing industry that employs a variety of business models for the production, distribution and monetization of content. While there are many ways a company can make money in entertainment (and even more ways to lose it!), we focus on parts of the value chain where we believe having a built-in audience can provide a competitive advantage.

As a startup attempting something that has never been done before, we view many of our early projects as experiments that allow us to better understand our business and prove - to ourselves, our investors, and the industry - the value that a fan-owned company can provide. Legion M has utilized many different business models, including the ones listed below:

### Feature Film Development and Production Financing

Legion M has publicly announced investments in the production of six feature films: *Field Guide to Evil*, *Mandy*, *Jay and Silent Bob Reboot*, *Archenemy*, *This is Not Financial Advice*, and *Nandor Fodor and the Talking Mongoose*. In each of these cases Legion M has made a cash investment in the production of the film in exchange for a potential cash return based on the film’s success. We’ve also announced one project (*Mary’s Monster*) in which we’ve made an investment in the development of a film that has yet to secure production financing.

The terms of these deals vary widely and are typically subject to several different contracts with the various parties associated with the film. The risk and potential return associated with these investments depends heavily upon the terms of the specific deal and where we fall in the “waterfall” -- the model that determines how (and in what order) revenue earned by the film is distributed amongst all the stakeholders. Thus far, Legion M has participated in relatively low-risk positions at the top of the waterfall (e.g. a fixed-return investment backed by an existing sales agreement that gets paid back once the film is delivered), as well as high-risk positions at the bottom of the waterfall (e.g. a percentage of the “backend” that gets paid after other investors have earned their return, but is uncapped). In some cases we’ve also been able to cross-collateralize across alternative revenue streams (e.g. the “Reboot Roadshow” live tour for *Jay and Silent Bob Reboot* and the Jóhann Jóhannsson soundtrack for *Mandy*) and/or secure other terms (e.g. guaranteed minimums) that can help decrease risk.

Legion M has also been able to leverage our position as an equity investor in many of these films to tap into other revenue streams, including release partnerships (see “Release and P&A Partnerships” below) and consumer products/media sales (see “Consumer Products and Media” below).

Revenue (when applicable) collected from these projects is categorized as “Project Revenue” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. Direct-to-

2

consumer sales of DVDs, Blu-Rays, movie tickets and merchandise are categorized as “Consumer Products and Media Revenue.”

### *Film and TV Development and Production*

Development generally refers to the earliest stages of the content production cycle, when production companies invest time, money, and “sweat equity” to develop, package, and sell movies, TV series and other entertainment projects. Examples of development activities include reading and evaluating scripts, licensing IP, packaging talent (e.g., showrunners, actors, directors), creating pitch materials, and pitching projects to financiers, studios, streaming services, networks, distributors and other potential partners. The goal of development is typically to package a project for financing and/or sale so it can be produced.

Legion M has dozens of projects on our development slate. This includes projects like *ICONS: Face to Face* where we invested cash to film a pilot, *The Emperor’s Blades* where we licensed rights to existing novels to develop into a film or TV series, as well as projects like *Airship Cowboys* and *Legion of Comedy* where there is little or no cash required, and our investment is primarily the time we spend working with partners to develop the idea. Many of our development stage projects have not been publicly announced.

From an investment standpoint, development projects are generally considered very high risk/reward, meaning that the odds of any given project making it into production are very low, but if you are successful in developing your project into a successful property, the rewards are potentially high.

Legion M has successfully signed deals for three projects from our development slate:

- In July of 2022 Legion M announced a partnership with William Shatner and Exhibit A Pictures to produce an untitled documentary about the life of William Shatner. The film is expected to be financed via an equity crowdfunding offering tied specifically to revenue generated by the film.
- In August of 2021 Legion M signed a deal with a major streaming provider for the sale of two seasons of an adult animated series developed by Legion M. Due to confidentiality agreements, we have not revealed the name of the project or the streaming partner. Between August 2021 and June 2022, the streamer hired a writing staff and produced outlines for 2 full seasons of episodes and scripts for 1 full season of episodes, however in June of 2022 the streamer told us that they had cut the series from their slate. They told us the series had not been cut due to any creative issues/concerns, but because a change of strategic mandate for the streamer. As of October 2022, Legion M is attempting to negotiate a “turnaround agreement” with the streamer that would allow us to continue forward and attempt to sell the project to another buyer.
- In September of 2021, Legion M began filming *The Man in the White Van*, a multi-million dollar feature film (true-crime thriller) developed and produced by Legion M with financing provided by a third party. As producers of the movie, Legion M earns fees from the production budget and also has a stake in any back-end profits the film generates (if applicable). The film is expected to release in 2023.

Working with our partners, Legion M plans to continue pitching our development projects to partners like Netflix, Amazon, Hulu, Apple TV+, FX, Sony, HBOMax, Discovery, Disney+ and more. Every pitch we make is an opportunity to launch a new movie, series, or franchise.

While development is generally considered a “cost center” for most production companies, Legion M has found ways to monetize the process and earn revenue from many of our development projects. For example:

- In the process of developing *Girl With No Name* as a feature film and *Darknights and Daydreams* as a Broadway play, we launched crowdfunding projects that allowed us to bring fans into the development process and offset our development costs.

3

- By selling merchandise and media (e.g. autographed books) for projects like *The Emperor's Blades*, *The Gray Area*, *Calculated*, and *The Book* we are able to build buzz and generate revenue that reduces our downside risk for these projects.

Revenue (when applicable) generated by our development activities is categorized as “Project Revenue” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. Revenue related to sales of consumer products and media (including comics and books) is also categorized as “Consumer Products and Media Revenue.”

### Release and P&A Partnerships

As a fan-owned company, Legion M has a lot to offer partners during the release cycle of a film and has engaged in the release of several projects. The terms and structures of these deals varies greatly, including but not limited to the ones listed below:

- *Colossal*, where Legion M partnered with NEON to provide cash for “P&A” (an industry term for the marketing and release of a film) in exchange for a potential cash return based on the theatrical success of the film.
- *Bad Samaritan*, where Legion M partnered with Dean Devlin’s Electric Entertainment to make an “in-kind P&A investment,” in which Legion M promoted the film in exchange for a potential cash return based on the film’s theatrical success.
- *Tolkien*, where Legion M partnered with Searchlight Films (a division of Disney) to earn revenue and exclusives for our members in exchange for supporting the release of the film.
- *Save Yourselves!* where Legion M partnered with Bleecker Street to promote the film (which was selected by Legion M Film Scouts at Sundance) in exchange for marketing fees and potential cash return based on the success of the film in its first 2 years of release.

In addition, Legion M has entered release marketing partnerships for many projects in which we had a pre-existing relationship, including *Mandy*, *Jay and Silent Bob Reboot*, and *The Field Guide to Evil*. These partnerships allow us to generate revenue and/or offset marketing costs while supporting projects we have a stake in.

Revenue (when applicable) generated by our release and P&A partnerships is categorized as “Project Revenue” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. Direct-to-consumer sales of DVDs, Blu-Rays, movie tickets and merchandise is categorized as “Consumer Products and Media Revenue.”

### Consumer Products and Media

Ever since our community began, there has been demand for Legion M merchandise that allows our members and investors to show off their Legion M pride. As the community gets larger, that demand grows. Today we have a robust consumer products division which oversees Legion M’s ecommerce store, wholesale business, and licensing program.

In 2018, through our investment in the film *Mandy*, Legion M acquired an exclusive license to produce merchandise related to the film and sublicense to third party brands and retailers. Through Legion M’s online store (shop.legionm.com) and our licensing and wholesale partners (which include Hot Topic, Spencer’s Gifts, Mondo Tees, Funko, and more) we sell items ranging from t-shirts and hats to replica props and Halloween masks. Our ability to generate consumer product, media, and licensing revenue tied to our projects creates value for both Legion M and our partners.

Since our success with *Mandy*, Legion M has acquired merchandising rights to a number of our other projects including *Archenemy*, “The Left Right Game,” *Jay and Silent Bob Reboot*, *The Emperor’s Blades*, *Memory: The Origins of Alien*, *Save Yourselves!*, and *Darknights and Daydreams*. For some of our projects, we sell the project

4

media itself, including DVD's, Blu-Ray's, digital movie downloads, books, albums, and comics. In 2020, we expanded into consumables with the addition of Cheddar Goblin Macaroni and Cheese (from the film *Mandy*) and *Archenemy Whiskey* to our consumer product portfolio.

Our Consumer Products and Media revenue comes from a number of different sources:

- Direct to consumer sales through the Legion M channels (including our shop.legionm.com online store and Amazon storefront)
- Wholesale sales of Legion M product to 3rd party retailers (e.g., Hot Topic)
- Sublicensing to 3rd party manufacturers and brands (e.g. Funko), where Legion M earns royalties from 3rd parties who create and sell their own products

Today, consumer products and media sales represent a significant component (44% in 2021 and 71% in 2020) of our revenue. For more information on "Consumer Products and Media Revenue," please see the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section.

From an investment perspective (e.g., if we evaluate the time and money we invest in consumer product initiatives using the same criteria we use to evaluate our project initiatives), consumer products offer a number of unique advantages:

- The risks of launching a new ecommerce product are relatively small - particularly now that "print on demand" technology eliminates the risk associated with inventory requirements for many items.
- The time required to achieve returns on a new product line is orders of magnitude shorter than film and TV projects. For example, while it can take years to see a return on a successful film project, it's possible to start making money from merchandise related to a film even before it is released.
- Revenue from merchandising comes directly to Legion M, from which we pay royalties that get put into the waterfall (the distribution of funds amongst all the stakeholders of a project as dictated by the applicable contracts between all the parties). This is a more advantageous position than other models where revenue is collected by others and comes to us (when applicable) via our position in the project waterfall. For projects in which Legion M has a position in the waterfall, it's even possible that a portion of the Consumer Products and Media Revenue we contribute into the waterfall could come back to Legion M.

We also believe that the investments we make in consumer products related to our projects pays dividends beyond the revenue they generate. It's not a coincidence that successful entertainment companies like Walt Disney and Warner Brothers have robust consumer product divisions to monetize their IP, as branded products are an excellent way to drive awareness and build and nurture fandoms.

Revenue from our consumer products and media sales is broken into two categories:

- Revenue tied to contracts with our projects (e.g. *Mandy*, *Save Yourselves!*, etc.) is included in the "Project Revenue" category.
- Revenue not tied to contracts with our projects (e.g. Legion M merchandise, our in-house "Auto Focus" brand, etc.) is included in our "Non-Project Revenue" category.

Revenue from both of these categories is broken out in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section.

### *Film Distribution*

In April of 2019, Legion M announced our first foray into film distribution - a partnership with Screen Media to acquire the North American distribution rights for the documentary *Memory: The Origins of Alien*. Under this partnership, we're sharing (in a 50/50 split) all the costs and revenues from the North American distribution of the

5

film across all outlets for the next 20 years. Screen Media is providing the expertise required to distribute the film, while Legion M is providing the marketing muscle we believe will help make it successful.

As the distributor of the film (in partnership with Screen Media), our investment is the money and time spent to acquire, market, and distribute the film. These costs include everything from the fees paid to acquire the rights from the filmmakers to the costs associated with booking theaters, manufacturing DVDs, creating trailers, designing/printing posters, and buying advertising. However, as the distributor, Legion M and Screen Media will earn a portion of theatrical ticket sales, DVD sales, VOD sales/rentals, licensing/advertising fees paid by streamers, merchandise sales, etc. through the year 2039. It's worth noting that the film was released in 2019, which was the 40-year anniversary of *Alien*, but we will still own the rights to this film when the 50th and 60th anniversaries of the film roll around in 2029 and 2039.

In addition, Legion M has secured merchandising rights associated with the film (including the rights from the H.R. Giger estate to offer free gifts with purchase and rights from the Dan O'Bannon estate to sell licensed merchandise) and offers a limited line of merchandise related to the film.

Revenue (when applicable) collected from this project is categorized as 'Project Revenue' in the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section. Revenue related to sales of DVDs, Blu-Rays, and merchandise sales is categorized as 'Consumer Products and Media Revenue.'

### ***Live Event Production***

Legion M has produced multiple major live events including the 2022 'Celebrating William Shatner' day at San Diego Comic-Con, the 2017 'Celebrating Stan Lee' handprint ceremony and after-party, and the 2019 'Excelsior!' tribute to Stan Lee (benefiting the non-profit charity The Hero Initiative) shortly after Stan passed away. In each of these cases, we incurred the effort, costs, and risks of hosting the events in exchange for the revenue generated from sources including tickets, merchandise, food/drink, autograph signings, and sponsorships.

These events are not generally designed to generate a profit -- instead, the revenue generated by these events helps subsidize the costs of what we believe were extremely effective ways to generate exposure and goodwill within the industry and fan communities. Our events have included a long list of industry participants, including Kevin Feige (head of Marvel Studios), Mark Hamill (*Star Wars*), Laurence Fishburne (*The Matrix*), Kevin Smith (*Jay and Silent Bob Reboot*), Chadwick Bozeman (*Black Panther*), Todd McFarlane (*Spawn*), and Paul Wesley (*Star Trek: Strange New Worlds*). Our William Shatner event at San Diego Comic Con help us secure Legion M's first ever Hall H panel, which is one of the most coveted events at Comic Con (i.e. Hall H the same place studios like Disney and Amazon make their huge Comic-Con announcements). These events also generate extensive news and media coverage from around the world and provided an opportunity for Legion M to 'open the gates of Hollywood' and bring our members/shareholders to places that are typically reserved for industry insiders.

In addition to the major events, Legion M has hosted several smaller events, including the 'Legion M Lounge' at the Sundance Film Festival and the 'Fan Oasis' at Los Angeles Comic Con. While these events are typically free (i.e. there is no ticket sale revenue) we have had some success selling sponsorships. Again, our goal with these events to date has not been to generate a profit (although we'd certainly love to if we could find the right sponsor), but to offset the costs of marketing efforts that allow us to promote our projects and grow our community.

Revenue from the our major events is categorized as 'Project Revenue' during the appropriate reporting period. Revenue (when applicable) from sale of merchandise and media related to these events is categorized as 'Consumer Products and Media Revenue.' Revenue (when applicable) from our Lounges at Comic Con and Film Festivals is included as 'Non-Project Revenue' during the appropriate reporting period. Results for all of these categories can be found in the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section.

6

## Finance Plan

As of October 2022, we have raised over $16,000,000 from more than 35,000 investors under Regulation A, Regulation CF and Regulation D.

Developing and monetizing entertainment projects like movies and television shows usually requires significant capital investment. We intend to raise as much of that money as possible directly from fans. Our long-term goal is to have 1 million shareholders, which would likely provide hundreds of millions of dollars. We expect it will take us many successive fundraising rounds to achieve this goal, but if we're successful we believe it could make us one of the most influential companies in Hollywood.

In addition to raising money directly from fans, Legion M is exploring opportunities to partner with private equity investors, venture capitalists, film financing companies, and other entertainment financiers to increase the amount of money available for funding Legion M projects and initiatives.

## Entertainment and Media Market

Film, television and digital entertainment is a global industry that generates trillions of dollars in revenue each year. Home to some of the largest and best-known corporations in the world (Disney, Sony, Netflix, NBCUniversal, etc.), it is an extremely complex and competitive industry with stakeholders ranging from content creators and studios to networks, technology and distribution companies.

As the industry grows, it's constantly evolving. In recent years, changes in technology and consumer habits have ushered dramatic shifts in the industry, including the proliferation and success of global OTT ("over the top") services such as Netflix, Amazon and Hulu, the advent of new steaming services such as Disney+, Peacock and AppleTV, the rise of new technologies like interactive TV and Virtual Reality, and the growth of non-traditional models such as PPV (pay per view), VOD (video on demand), SVOD (subscription video on demand) and AVOD (advertising supported video on demand).

Throughout all this change, the one thing that remains constant is the importance of the audience. It's the collective eyeballs and wallets of viewers around the world that fuel the entire industry. The power of aggregating fans can be seen throughout the industry, from the salaries commanded by well-known actors and influencers to the importance of sequels, reboots and IPs with established fanbases.

From franchises and IP to talent and influencers, we believe a BUILT-IN AUDIENCE is one of the most valuable assets in Hollywood. Our goal is to create a company with a built-in audience for everything we do.

## Board of Advisors

While we are fan-owned company, we are not a fan-run company. We believe our fan community is an extremely powerful resource for helping evaluate the *art* of media and entertainment, but the *business* of media and entertainment is extremely complex, nuanced, and highly confidential. To help us navigate these waters, we've established a remarkable board of advisors which currently includes:

- William Shatner - Renowned Actor (*Star Trek*, *TJ Hooker*, *Boston Legal*, *Rescue 911*, etc.), Director, Producer, Screenwriter, Author and Musician
- Larry Gleason - Distribution and Exhibition Expert, Former President of Worldwide Distribution at MGM, and Former President of Worldwide Exhibition at Paramount
- Stoopid Buddies Stoodios (Matt Senreich, Seth Green, John Harvatine, and Eric Towner) - the Company behind Robot Chicken, SuperMansion, and Buddy Thunderstruck

7

- Joanne Waage - SVOD Pioneer, Former GM/CEO of Crunchyroll, and Former CEO of Rakuten Viki
- Scott Landsman - Senior Vice President of Comedy Development at Sony TV
- Gaston Dominguez-Letelier - Comic Book & Pop Culture Expert and Founder & Former CEO of Meltdown, Inc., SVP NTWRK
- Animal Repair Shop (Susan Bonds and Alex Lieu) - Mixed Reality Pioneers and Former Disney Imagineers
- Lisa Taback - VP Talent Relations & Awards at Netflix and Former Awards Consultant (*Spotlight*, *Moonlight*, *La La Land*)
- Kerry O'Quinn - Creator and Publisher of Starlog, Fangoria, CineMagic, and Comics Scene Magazines
- Tim League - Founder of Alamo Drafthouse, Founder of Fantastic Fest, and Co-Founder of NEON
- Adam Rymer - CEO Envy Gaming and Former President of Legendary Digital Networks
- Doug Hansen - P&A Expert, Former President & COO of Endgame Entertainment, and President of Hansian Media
- Michael Arrieta - Business Development Expert, COO of Relativity Media, Founder of Big Air Studios, and Former Sony Executive
- Leonard Maltin - Entertainment Tonight Renowned Film Critic and Author of Leonard Maltin's Movie Guide
- Christian Parkes - CMO of NEON, Former CMO of Alamo Drafthouse, and Co-Founder of Beyond Fest
- Andrew Cosby - Co-Founder of Boom! Studios, *Eureka* Writer & Showrunner, and *Hellboy* Screenwriter
- Yuka Kobayashi - Former Director of Stan Lee's POW Entertainment
- Dean Devlin - Founder of Electric Entertainment, Co-Writer & Producer of *Independence Day* and *Stargate*, Producer of *The Librarians* and *Leverage*, and Director of *Bad Samaritan*
- Bill Duke - Actor (*Commando*, *Predator*, *Falcon's Crest*, *Charlie's Angels*, *Law and Order SVU*, etc.), Director, Producer, and Author
- Julianne LaMarche - Marketing & Strategic Planning, Former Co-President of BLT Communications, and Former President of Trailer Park
- Martin Lauber - Founder of Swirl Advertising, Founder & Managing Partner of 19York
- Lynn Bartsch - Head of Business Affairs at Epic Games, Former Principal Counsel of Lucasfilm, Former Senior Director of Business Affairs, Original Programming at Audible
- Rao Meka - Founder of shopVOX and CEO of 1729 Pictures
- Eric Ries - Author of *The Lean Startup* and Founder of the Long Term Stock Exchange

8

- Natalie Farsi - Digital Growth and FAST Channel Specialist. TYT Network, AwesomenessTV, Viewster, Warner Bros mobile/OTT, Fox Mobile Studios, and Warner Music

## Employees

As of October 2022, we have seven full time employees, twelve part-time employees or contractors that typically work between 1 and 20 hours per week, and a variety of other part-time employees/independent contractors we use on an as-needed basis. We also have an intern program where college students earn course credit for working part-time at Legion M.

## Competition

There are thousands of other companies involved in the creation and monetization of entertainment content, from giant international conglomerates to small independent creators. Many of these companies can be considered potential competitors in that we are all competing to develop entertainment for consumers; however, most of them can also be considered potential partners or allies, as collaboration is very common in the entertainment industry.

At this time, we're not aware of any direct competitors utilizing equity crowdfunding on a large scale to unite entertainment fans like Legion M. The closest potential competitor we are aware of is a company called Angel Studios that has raised money for several projects (including 'The Chosen,' which is a faith-based TV series following the life of Jesus Christ) as well as a fundraising platform for film and TV projects. Based on the materials we've seen to date, they don't appear to be a direct competitor to Legion M, but that could change in the future.

In addition, we are aware of many creators who have used equity crowdfunding to raise (or attempt to raise) money for individual projects, as well as other companies that have launched or announced plans to launch equity crowdfunded entertainment businesses (including equity crowdfunded production slates, comic book companies, and entertainment-related cryptocurrency offerings).

That said, as of October 2022, we are not aware of any companies that have achieved significant traction or that we would consider a direct competitor. Over time we expect this will change.

## Intellectual Property

Legion M has the trademark to its name 'Legion M,' as well as a trademark for 'Archenemy' for whiskey.

## Litigation

Legion M has not been involved in any litigation, and its management is not aware of any pending or threatened legal actions relating to its intellectual property, the conduct of its business activities, or otherwise.

## THE COMPANY'S PROPERTY

Legion M does not own or lease any real estate, office space or significant tangible assets other than a 1959 Cadillac valued at approximately $53,000. Operating mostly virtually, Legion M has coworking conference room space in Century City, CA.

9

# FINANCIAL DISCUSSION

## Financial statements

The interim financial statements for the periods ending June 30, 2022 and 2021 have not been audited. Our financial statements for the fiscal years ending December 31, 2021 and 2020 were audited by Artesian CPA, LLC. The following discussion should be read in conjunction with our interim and audited financial statements and the related notes included in this offering memorandum. The following discussion also includes information based on our unaudited operating data for 2022 and is subject to change once we complete our fiscal year, prepare our financial statements and our accountant completes a financial audit of those statements.

## Overview

Legion M was incorporated in Delaware on March 4, 2016, as a C corporation. We are an entertainment company that partners with creators and other entertainment companies -- from independent filmmakers to large Hollywood studios and distributors -- to develop, produce, distribute, market and monetize entertainment content including movies, television shows, virtual reality, digital content, events, and more.

## Going Concern Statement

Legion M is not yet profitable, which means that we rely upon funds from investors (along with any profits we make from our business) to pay for our operations. This is common for most startups, and the reason those startups raise money. Over time we hope to grow our revenue and manage our spending to become profitable, but until that happens our ability to stay in business is reliant upon our ability to raise money from investors.

As described in Note 2 to our unaudited financial statements, the accompanying financial statements have been prepared on a 'going concern' basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has no profit since inception, incurred negative operating cash flows, and has sustained net losses of $1,016,109 and $848,969 for the for the periods ended June 30, 2022 and 2021, respectively. As of June 30, 2022, the Company has an accumulated deficit of $15,432,813. The Company expects near-term revenue from various projects and investment proceeds. However, the Company's ability to continue as a going concern for the next twelve months is dependent upon its plan to raise more capital from investors. No assurance can be given that the Company will be successful in these efforts. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time without raising additional funding.

The purpose of this 'Going Concern' statements is to alert investors to the fact that the company does not have enough cash on hand to fund operations for the next 12 months. As such, the Company's ability to stay in business (i.e., remain a 'going concern') relies on our ability to raise more money from investors. Over the past 6 years, the Company has raised over $16 million and generated over $3 million in revenue. During this time, we've had 'Going Concern' statements attached to every one of our financial reports. While the company has successfully managed our fundraising, revenue, and spending to remain a going concern for the past 6 years, there is no guarantee we'll be able to do so in the future.

## June 30, 2022 Operating Results

Our revenue for the six months ended June 30, 2022 ('Interim 2022') was $232,709, a 52% decrease over our revenue of $480,513 during the six months ended June 30, 2021 ('Interim 2021').

At this point in the company's development, we expect our revenue to fluctuate from period to period due to the release patterns of our projects. For example, a significant portion of our revenue in Interim 2021 came from our investment in the film *Archenemy*. We made the *Archenemy* investment in 2019, the film released in 2020, and we received the bulk of the revenues (so far) in 2021. Legion M didn't make any large investments in movies in 2020

10

(due largely to the pandemic), and we didn't have any projects release in 2021. That said, as of this writing (September 2022) we currently have stakes in 4 films (The Man in the White Van, This is Not Financial Advice, Nandor Fodor and the Talking Mongoose, and a currently untitled William Shatner documentary) in post-production, with releases expected in 2023.

As we explain in our offering document, Legion M is not currently focused on short-term revenue growth. Instead, we're focused on growth of our community and development of capabilities we believe could become long-term competitive advantages. As a result of this fact, along with the variety of business models we employ and the inherent "lumpiness" of entertainment project revenue, we expect Legion M's revenue, and the sources that produce that revenue, to be volatile from year to year.

While Legion M receives revenue from a wide variety of sources, it can be broken down into two major categories:

- Project Revenue. Revenue directly related to our contracts for the projects outlined in the "Active Projects," "Development Projects" and "Completed Projects" sections of this document.
- Non-Project Revenue. All other revenue, including sales of non-licensed merchandise, ticket and sponsorship income for Legion M community events (e.g., the "Legion M Lounge" at Sundance), and revenue attributable to shipping and handling fees, including when those fees are associated with project-related merchandise

Project Revenue decreased 52% to approximately $195,188 in Interim 2022 from approximately $402,467 in Interim 2021, and represented approximately 84% of our total revenue in Interim 2022 compared to approximately 90% in Interim 2021. As mentioned above, the primary reason for this drop was the fact that in Interim 2021 we received revenue from a film that had recently released but in Interim 2022 we did not. Our largest revenue contributions in Interim 2022 came from earlier releases including Mandy, The Field Guide to Evil, and Memory: The Origins of Alien.

Non-Project Revenue decreased 18% to approximately $37,521 in Interim 2022 from approximately $45,842 in 2021, and represented approximately 16% of our total revenue in Interim 2022 compared to approximately 10% in Interim 2021. The decrease in non-project revenue was primarily attributable to normal fluctuation in sales.

In addition, Legion M's revenue can also be broken out by revenue received from consumer products and media, which is defined as revenue earned from sales and shipping of merchandise (e.g. clothing, accessories, props, consumables, etc.) and media (e.g. DVDs, Blu-Rays, comic-books and books) via:

- direct-to-consumer sales (e.g., via shop.legionm.com, amazon.com, in-venue activations, etc.);
- wholesale sales to 3rd party vendors (e.g., Hot Topic, comic book shops, etc.); and
- licensing agreements (e.g., sublicensing to 3rd parties who handle manufacturing and sales and pay us a royalty).

It's worth noting that Consumer Products and Media Revenue related to Legion M Projects represents Project Revenue that Legion M collects and participates in before it feeds into the project waterfall (i.e., the distribution of funds amongst all the stakeholders of a project as dictated by the applicable contracts between all the parties). Project Revenue from other sources (e.g., distribution, financing, etc.) is collected by others and comes to us (when applicable) via our position in the project waterfall. For projects in which Legion M has a position in the waterfall, it's possible that a portion of the Consumer Products and Media Revenue we contribute into the waterfall could come back to us.

Consumer Products and Media Revenue was relatively flat, decreasing 4% to approximately $178,556 or 77% of our revenue in Interim 2022, compared to approximately $186,735 or 42% of our revenue in Interim 2021. In

11

Interim 2022, our top revenue drivers in this category were the same as Interim 2021 -- products related to the film *Mandy*. As with our project revenue, we expect that our Consumer Products and Media revenue will vary significantly from year to year based on the release cycles of our projects and the unique products we develop for them.

Costs of net revenue in Interim 2022 was $201,197, a 40% decrease compared to $333,566 costs of net revenue in Interim 2021. The costs did not decrease as much as revenue, yielding a gross profit of $31,512 in Interim 2022, which was a 79% decrease compared to our gross profit of $146,947 in Interim 2021. Our gross profit margin decreased to 14% in Interim 2022 from 31% in Interim 2021. This decrease was the result of a greater concentration of revenue from lower margin sources (e.g. investments with capitalized costs in Interim 2022 compared to producer's fees and licensing revenue in Interim 2021). As stated above, at this stage in the Company's development we expect our revenue and margins to be volatile as we release new projects and develop new revenue streams.

For Interim 2022, operating expenses were relatively flat $1,156,194 compared to Interim 2021 operating expenses of $1,150,797, a 0.5% increase. Our operating expenses consist of employee compensation and benefits, sales and marketing, independent contractors, professional fees (e.g., legal, accounting, etc.), travel expenses, general and administrative, and depreciation. While our overall operating expenses were flat, there were some subcategories where expenses grew (e.g. compensation and benefits) that were offset by other subcategories where expenses were reduced (e.g. sales and marketing).

Our sales and marketing expenses were $278,354 in Interim 2022 compared to $413,555 in Interim 2021. This was due to a reduction in the amount of marketing money required for fundraising. Fundraising and growth of the Legion were the primary drivers of marketing spend in Interim 2021, though we also spent money to market Legion M projects and merchandise.

Our costs of compensation and benefits increased to $607,883 in Interim 2022, compared to $536,290 in Interim 2021. This increase was primarily due to the rollback of voluntary pay cuts that were enacted for many employees at the beginning of the pandemic. These costs include not only cash expenses (e.g., the money we pay for salaries, wages, taxes and benefits) but also the value (according to GAAP accounting standards) of stock options vesting to employees and advisors. Note that where appropriate under GAAP accounting standards, costs of project-specific labor expenses are capitalized and appear as 'Investments in productions' on our Balance Sheet instead of the 'Compensation and Benefits' line of the Statements of Operations.

Our cost of independent contractors increased to $51,888 in Interim 2022 from $5,810 in Interim 2021 as a result of increased utilization of independent contractors. Our cost of professional fees decreased to $96,348 in Interim 2022 from $113,062 in Interim 2021 due to a decrease in legal and accounting fees.

Travel expenses increased to $27,710 in Interim 2022 from $5,142 in Interim 2021 due to increased travel as the pandemic subsided. Our general and administrative costs increased to $90,611 in Interim 2022 from $73,337 in Interim 2021.

Legion M follows GAAP standards for capitalizing costs on projects where we expect a financial return over time. As such, we periodically evaluate the anticipated returns of the 'Investments in productions' that are included on our Balance Sheet. In Interim 2022 there were no asset impairments related to our projects.

In Interim 2022, some of our Project Revenue was associated with costs that were previously capitalized on our Balance Sheet. This resulted in $56,261 of previously capitalized costs being recognized on the Statements of Operations as cost of net revenue in Interim 2022. In addition, we had $516,708 in project-related costs that were capitalized during Interim 2022. As a result of all the factors mentioned above, as of June 30, 2022, we had $1,046,702 of capitalized 'Investments in productions, net' on our Balance Sheet, compared to $586,255 as of December 31, 2021.

12

These capitalized costs represent “bets we still have on the table.” It’s impossible to predict with certainty what the financial return of a project will be. For example, the return on a feature film is typically dependent upon the success of the film, while the return on a TV project is often dependent upon the series being sold. Some returns can be realized in a matter of months, while others may take decades (e.g., our distribution rights for Memory: The Origins of Alien last for 20 years, and backend rights for many of our other projects last in perpetuity). In accordance with GAAP standards, production costs are stated at the lower of unamortized cost or estimated fair value on a production basis. Therefore, the asset balances on our balance sheet are estimates that may not be realizable in the future.

The cost of depreciation was relatively unchanged between Interim 2022 and Interim 2021 ($1,239 vs. $3,148, respectively).

In Interim 2022 we had a PPP loan of $108,573 forgiven. In Interim 2021, we had a PPP loan of $139,868 forgiven and state grants of $15,013.

As a result of the foregoing factors, as well as other expenses, our net loss for Interim 2022 was $1,016,109, a 20% increase compared to our loss of $848,969 in Interim 2021.

## 2021 Operating Results

Our revenue for the year ended December 31, 2021 (“Fiscal 2021”) was $1,062,732, a 14% increase over our revenue of $933,570 during the year ended December 31, 2020 (“Fiscal 2020”).

While Legion M receives revenue from a wide variety of sources, it can be broken down into two major categories:

- Project Revenue. Revenue directly related to our contracts for the projects outlined in the “Active Projects,” “Development Projects” and “Completed Projects” sections of this document.
- Non-Project Revenue. All other revenue, including sales of non-licensed merchandise, ticket and sponsorship income for Legion M community events (e.g., the “Legion M Lounge” at Sundance), and revenue attributable to shipping and handling fees, including when those fees are associated with project-related merchandise

Project Revenue increased 29% to approximately $929,232 in Fiscal 2021 from approximately $718,108 in Fiscal 2020, and represented approximately 87% of our total revenue in Fiscal 2021 compared to approximately 77% in Fiscal 2020. Project Revenue in 2021 came from 15 unique projects (up from 10 in Fiscal 2020), including 7 (up from 4 in Fiscal 2020) that generated at least $10,000 in revenue. The largest revenue contributions in Fiscal 2021 came from Archenemy, Mandy, and The Man in the White Van.

The projects and products that contribute revenue for Legion M vary from year to year. Given the variety of business models that Legion M engages in (see the section “How We Make Money”) and the inherent “lumpiness” of many entertainment projects (e.g., the revenue from each project often varies wildly over time depending upon where the project is in its release cycle), we expect Legion M revenue, and the combination of projects that produce that revenue, to be volatile from year to year.

Non-Project Revenue decreased 37% to approximately $133,499 in Fiscal 2021 from approximately $215,462 in 2020, and represented approximately 13% of our total revenue in Fiscal 2021 compared to approximately 23% in Fiscal 2020. The decrease in non-project revenue was primarily attributable to sales of cloth/covid facemasks in the Legion M storefront that were available in Fiscal 2020, but were not sold in Fiscal 2021.

In addition, Legion M’s revenue can also be broken out by revenue received from consumer products and media, which is defined as revenue earned from sales and shipping of merchandise (e.g. clothing, accessories, props, consumables, etc.) and media (e.g. DVDs, Blu-Rays, comic-books and books) via:

13

- direct-to-consumer sales (e.g., via shop.legionm.com, amazon.com, in-venue activations, etc.);
- wholesale sales to 3rd party vendors (e.g., Hot Topic, comic book shops, etc.); and
- licensing agreements (e.g., sublicensing to 3rd parties who handle manufacturing and sales and pay us a royalty).

It's worth noting that Consumer Products and Media Revenue related to Legion M Projects represents Project Revenue that Legion M collects and participates in before it feeds into the project waterfall (i.e., the distribution of funds amongst all the stakeholders of a project as dictated by the applicable contracts between all the parties). Project Revenue from other sources (e.g., distribution, financing, etc.) is collected by others and comes to us (when applicable) via our position in the project waterfall. For projects in which Legion M has a position in the waterfall, it's possible that a portion of the Consumer Products and Media Revenue we contribute into the waterfall could come back to us.

Consumer Products and Media Revenue decreased 22% to approximately $524,887 or 49% of our revenue in Fiscal 2021, compared to approximately $673,928 or 72% of our revenue in Fiscal 2020. As with our project revenue, the products that generate Consumer Products and Media revenue often vary greatly from year to year. In Fiscal 2020, some of our top revenue drivers in this category were direct sales of DVDs/Blu-rays for the Jay and Silent Bob Reboot and Memory: The Origins of Alien (both of which were released to theaters in late 2019 and on DVDs/Blu-ray in early 2020), direct sales of cloth facemasks (benefitting the Actors Fund), and wholesale sales of products related to the Jay and Silent Bob Reboot. In 2021 our top Consumer Products and Media revenue streams came from direct sales of Funko Pops (including the exclusive Funko Pop that could only be purchased from Legion M), direct sales of products related to the likeness of Nicolas Cage, and licensing revenue (including Funko Pops sold by other retailers) related to the film Mandy. As with our project revenue, we expect that our Consumer Products and Media revenue will vary significantly from year to year based on the release cycles of our projects and the unique products we develop for them.

Costs of net revenue in Fiscal 2021 was $726,772, a 14% decrease compared to $849,564 costs of net revenue in Fiscal 2020. The decrease in costs came despite an increase in revenue, yielding a gross profit of $335,959 in Fiscal 2021, which was a 300% increase compared to our gross profit of $84,006 in Fiscal 2020. Our gross profit margin increased to 32% in Fiscal 2021 from 9% in Fiscal 2020. This increase was the result of a greater concentration of revenue from higher margin sources (e.g., producer's fees and licensing revenue in 2021 compared to low margin facemasks benefiting a charity in 2020). As stated above, at this stage in the Company's development we expect our revenue and margins to be volatile as we release new projects and develop new revenue streams.

For Fiscal 2021, operating expenses were $3,429,046 compared to Fiscal 2020 operating expenses of $2,319,404, a 48% increase. Our operating expenses consist of employee compensation and benefits, sales and marketing, independent contractors, professional fees (e.g., legal, accounting, etc.), travel expenses, general and administrative, and depreciation.

The increase in spending was driven almost entirely by sales and marketing, as Legion M returned to the spending levels employed prior to the onset of the COVID-19 pandemic. Our sales and marketing expenses were $1,738,695 in Fiscal 2021 compared to $574,857 in Fiscal 2020 and $1,989,641 in Fiscal 2019. This reflects increased bullishness on Legion M's part after the severe reduction of spending triggered by uncertainty at the onset of the pandemic in 2020. Fundraising and growth of the Legion were the primary drivers of marketing spend in 2021, though we also spent money to market Legion M projects and merchandise. We successfully closed Round 7 in April of 2021 and launched Round 8 in October of 2021. Through all rounds, we raised $3,318,054 in Fiscal 2021 compared to $1,153,080 during Fiscal 2020.

Our costs of compensation and benefits fell slightly to $1,128,550 in Fiscal 2021, compared to $1,274,320 in Fiscal 2020. These costs include not only cash expenses (e.g., the money we pay for salaries, wages, taxes and benefits) but also the value (according to GAAP accounting standards) of stock options vesting to employees and advisors. Note that where appropriate under GAAP accounting standards, costs of project-specific labor expenses are

14

capitalized and appear as “Investments in productions” on our Balance Sheet instead of the “Compensation and Benefits” line of the Statements of Operations.

Our cost of independent contractors decreased to $13,310 in Fiscal 2021 from $93,188 in Fiscal 2020 as a result of decreased utilization of independent contractors. Our cost of professional fees increased to $189,717 in Fiscal 2021 from $168,193 in Fiscal 2020 due to an increase in legal and accounting fees.

Travel expenses increased to $44,529 in Fiscal 2021 from $22,580 in Fiscal 2020 due to increased travel as the pandemic subsided. Our general and administrative costs were fairly consistent, decreasing to $169,205 in Fiscal 2021 from $176,939 in Fiscal 2020.

Legion M follows GAAP standards for capitalizing costs on projects where we expect a financial return over time. As such, we periodically evaluate the anticipated returns of the “Investments in productions” that are included on our Balance Sheet. In Fiscal 2021 we had $140,556 in asset impairments related to our projects. Over $100K of this impairment came from costs associated with our Stan Lee ICONS shoot (see the “Projects” section below). Legion M still owns the footage from this shoot and hopes to someday exploit it, but given the time that has elapsed since it was captured (over 5 years) and uncertainty around if/when/how we’ll be able to monetize it, we felt it was best to remove the capitalized costs from the balance sheet. The remainder of the impairment (~$40K) came from adjustments to expected revenue from 3 different projects.

In Fiscal 2021, some of our Project Revenue was associated with costs that were previously capitalized on our Balance Sheet. This resulted in $199,519 of previously capitalized costs being recognized on the Statements of Operations as cost of net revenue in Fiscal 2021. In addition, we had $29,911 in costs that were capitalized during Fiscal 2021. As a result of all the factors mentioned above, as of December 31, 2021, we had $586,255 of capitalized “Investments in productions” on our Balance Sheet, compared to $896,419 as of December 31, 2020.

The cost of depreciation was relatively unchanged between Fiscal 2021 and Fiscal 2020 ($4,484 vs. $9,327, respectively).

In Fiscal 2021 we had a PPP loan of $139,868 forgiven, and state grants of $15,013. In Fiscal 2020, we had an EIDL grant of $10,000.

As a result of the foregoing factors, as well as other expenses, our net loss for Fiscal 2021 was $2,939,564, a 32% increase compared to our loss of $2,225,398 in Fiscal 2020.

## MANAGEMENT EVALUATION OF OPERATING RESULTS

In terms of financing, Legion M is a relatively early-stage company. We believe the amount of money we’ve raised (over $16 million as of September 2022) puts us squarely in the startup realm - about the equivalent of a VC backed startup that completed a series A and is working on a series B funding.

We believe the once-in-a-lifetime disruption of the JOBS Act has created an opportunity for us to build a new type of company with sustainable competitive advantages in multi-trillion-dollar global industry. Our founders Paul Scanlan and Jeff Annison have a track record of success - in 1999 they founded (along with one other cofounder) a company called MobiTV, which was one of the first companies in the world to launch live streaming television on mobile phones. While Paul and Jeff were at MobiTV (Jeff left in 2009, Paul in 2015), the company grew from 3 founders working out of a spare room to an Emmy Award-winning worldwide leader in streaming television with hundreds of employees and offices around the world.

Doing something new is always a risk, but we’ve done this before and believe we can do it again. After all, we’re investing in Legion M alongside you - we’re risking our money, our reputations, and our careers that we can make this company a success.

15

## Key Performance Metrics

As a startup, our primary focus is growth. We consider three primary metrics when evaluating projects and initiatives.

**Growth** - We believe that growth of our community is the single most important determinant of our long-term success. A Legion of one is insignificant, but a Legion of one million could be invaluable. As such, the ability of any project or initiative to help us grow the Legion is one of the most important considerations.

**Strategic Benefit** - Each project Legion M completes becomes a stepping-stone to the next. We actively seek projects and initiatives that allow us to “level up” by forming strategic relationships and developing new capabilities that create long-term value for the Company.

**Revenue** - Like any other company, the goal of Legion M is to make money. Financial success is the key to the long-term viability and success of our Company, and the potential for financial return is an important consideration when we evaluate projects. That said, at these early stages of the company’s development we’re not focused on revenue, and are often willing to forgo short-term revenue when we believe the growth or strategic benefit of a project or initiative will provide greater long-term value for the company.

## Effects of Scale on Legion M Projects

In calculating the expenses of our projects, we account for both the money (i.e. cash investments and money spent on marketing, travel, etc.) and time (e.g. the proportional cost of staff salaries who are working on the project) spent on them. It’s important to note that at this stage in our development, the financial investments we make in projects are often relatively small in relation to the amount of time we spend on them. However, it’s also important to note that these two expense categories scale very differently. The best way to illustrate this is to use a simplified hypothetical example:

Legion M makes an investment of $100,000 in a feature film, with a return based on the success of the film. As part of the deal, we agree to host opening weekend meetups around the country, which cost us $5,000 worth of man hours to support and $5,000 worth of travel expenses. We also have $5,000 worth of legal, business development and management expenses associated with the project. In total, we’ve invested $115,000 in the project.

The film is released and provides Legion M a 15% ROI on our $100,000 investment. When the final numbers are tallied, we invested $115,000 and received $115,000 in return, making the project break-even.

While the example above is both fictional and simplified, it is representative of some of the deals Legion M has engaged in. We provide it to illustrate a point we believe is important to keep in mind when evaluating our company at this stage:

As we grow, we expect the amount of money we invest in projects to get larger, whereas we expect the time we spend supporting them to stay relatively fixed (or in some cases go down due to the development of processes and infrastructure). In the example above, if we’d invested $1 million in the film instead of $100,000 and spent the same amount of money on time, travel, legal, etc. we’d end up with $135,000 in net profit instead of break-even. As we grow our investor base and have more access to capital, we hope to be able to take larger positions in projects, reducing the financial significance of the costs we spend supporting them, and improving our chances of profitability when a project is successful.

This point applies to more than just the model outlined above. In fact, most business models Legion M has engaged in scale in similar ways. For example:

16

o The fees a company receives for producing a film typically scale with the budget of the film.
o Consumer products and licensing revenue generally scales with the size of the IP involved.
o Fees charged for marketing and release partnerships typically scale with the size of the marketing budget, which typically scales with the budget of the film.
o Revenue earned from distribution scales with the size of the release, which often scales with the budget of the film and the stars involved

In short, while our financial position to date has limited Legion M's activities to relatively small (by Hollywood standards) independent films, our hope is that over time we'll be able to scale our activities to larger and larger projects. We view most of the projects we've engaged in so far as experiments that allow us to better understand how we can leverage the power of our community to improve our chances of success. We expect some of our projects will be financially successful and others will not, but over time we hope to grow the Legion and "level up" to bigger and better opportunities. Today, while our investments are relatively small, we believe the financial success of the project is often secondary to the other benefits it may provide.

### Traction and Milestones

What Legion M is attempting was never possible before advent of the JOBS Act. When we started the Company in 2016, we had little more than an idea. Since then, we've focused on building a foundation that proves (to ourselves, to our investors, and to Hollywood) what a fan-owned company is capable of:

- One of the most successful equity crowdfunded companies in JOBS Act history, with over 35,000 investors (as of September, 2022) and over $16M raised.
- Demonstrated ability to build a community, with over 150,000 investors, members and followers.
- Demonstrated ability to grow revenue: Our 2021 revenue is up 14% from 2020, 65% from 2019 and 491% from 2018.
- Demonstrated ability to develop, package, and finance a movie (see *The Man in the White Van* in the "Active Projects" section).
- Demonstrated ability to work on projects with top tier talent, including Anne Hathaway, Nicolas Cage, Stan Lee, Kevin Smith, Jason Sudeikis, Joe Manganiello, Sunita Mani, Sean Astin, Simon Pegg, Minnie Driver, Christopher Lloyd, and more.
- Demonstrated ability to partner with top tier companies (with notable credits), including NEON (*Parasite*, *I Tonya*, *Palm Springs*), Bleecker Street (*The Assistant*, *Trumbo*, *Beasts of No Nation*), Searchlight (*JoJo Rabbit*, *The Shape of Water*, *Birdman*), SpectreVision (*No Man of God*, *Color out of Space*) and Nederlander Worldwide Productions (live theater presentations including *Hamilton*, *Wicked*, and *The Lion King*).
- Powerful advisory board of industry luminaries including legendary actor/producer/writer William Shatner, billion dollar producer Dean Devlin (*Stargate*, *Independence Day*, "Leverage," "The Librarians"), renowned author Eric Ries (*The Lean Startup*), legendary movie critic Leonard Maltin ("Entertainment Tonight"), Actor/Producer/Director Bill Duke (*Commando*, *Predator*, *X-Men: The Last Stand*) and current/former executives and creatives from Netflix, Sony, Lucasfilm, Epic Games, MGM, NEON, Alamo Drafthouse, Comedy Central, Walt Disney Imagineering, Universal Studios, Paramount, Nerdist, Trailer Park, Endgame Entertainment, Meltdown Comics, NTWRK, POW!, Audible, Fangoria, & more.

17

- Diversified revenue streams with demonstrated ability to generate revenue from multiple business models, including development, financing, production, distribution, marketing, consumer products, licensing, sponsorships and live events.
- Demonstrated ability to activate fans, with hundreds of volunteer meetups all over the country to support the opening of our films and social media campaigns with tens and even hundreds of thousands of reactions, comments, and shares.
- Positive references from producers we've worked with including Dean Devlin (creator of *Stargate* and *Independence Day*) and actor/producer Elijah Wood of SpectreVision (producer of *Mandy*), as well as the teams at Fox Searchlight (a division of Disney), RLJ Entertainment, and Bleecker Street.
- Demonstrated ability to monetize new IP, including generating over $125,000 in Kickstarter pre-release sales for *Girl with No Name*, setting a record (at the time) for the most backed project in the history of Kickstarter's comic book category.
- Demonstrated ability to develop tools and technology (e.g., Film Scout, M-Pulse, Meetup Maker) that allow us to harness the power of a Legion of fans.
- Demonstrated value for studios, including a 2019 marketing partnership with Fox Searchlight (a division of Disney) where we received revenue, comarketing, and fan-exclusives for our members to promote the film *Tolkien*.
- Demonstrated ability to harness the "wisdom of the crowd", with hundreds of thousands of votes cast on the Legion M FILM SCOUT app, leading to a 2019 partnership with Screen Media to purchase the North American distribution rights for *Memory: The Origins of Alien* and a 2020 partnership with Bleecker Street Media for the release of *Save Yourselves!*
- Demonstrated ability to "Open the Gates of Hollywood" for our shareholders, providing exclusives like red carpet premiere tickets, set visits, spots as extras, walk-on-rolls, lounges at Sundance Film Festival and Comic Cons, special events like the Stan Lee Handprint Ceremony and 2019 Saturn Awards, and online livestream Q&A with creators.

In the time we've been operating we have seen dramatic improvement in not only our access to opportunities, but also our ability to execute on them and our ability to negotiate favorable terms. For example, in the early days of the company we had to invest in projects in order to get a seat at the table. As we grew, we started to earn our seat at the table through sweat equity and "in-kind investments." Today, we've gotten to the point where some projects allow us to get paid (in the form of producer's fees) to sit at the table. As we grow, we hope these trends will continue.

### Legion M Projects

Legion M classifies our projects to fall into one of three categories:

1. "Active Projects" are projects that have made it into production or have already been released.
2. "Completed Projects" are Active Projects that have reached a point where we don't expect them to generate significant additional revenue.
3. "Development Projects" are projects in development that have yet to (and may not) secure a release.

### Active Projects

18

Legion M defines “Active Projects” as projects that are either in production or have secured a release. Any revenue generated by an Active Project is included as Project Revenue during the appropriate reporting period. If an Active Project reaches a point where we don’t expect it to generate significant additional revenue, we consider it a “Completed Project.”

As of September 2022, Legion M has the following publicly announced Active Projects:

*UNTITLED WILLIAM SHATNER DOCUMENTARY* is a full-length documentary produced in partnership between Legion M, Exhibit A Pictures, and William Shatner. The film is expected to be financed via an equity crowdfunding offering tied specifically to revenue generated by the movie, which is expected to release in 2023. As a producer of the film, Legion M has the potential to earn revenue based on the success of the film.

*THIS IS NOT FINANCIAL ADVICE* is a feature-length documentary produced by Optimist. The film is expected to release in 2023. As an equity investor and executive producer on the film, Legion M has the potential to earn revenue based on the success of the film and will also receive some revenue for marketing the film.

*NANDOR FODOR AND THE TALKING MONGOOSE* is a feature film directed by Adam Sigal starring Simon Pegg, Minnie Driver, and Christopher Lloyd. The film is expected to release in 2023. As an equity investor and executive producer on the film, Legion M has the potential to earn revenue based on the success of the film and will also receive some revenue for marketing the film.

*THE MAN IN THE WHITE VAN* is a feature film directed by Warren Skeels starring Madison Wolfe, Sean Astin, Ali Larter, Brec Bassinger and Skai Jackson. The film is expected to release in 2023. As a producer on the project, Legion M has earned fees from the production budget, and also has a stake in any back-end profits the film generates (if applicable).

*ARCHENEMY* is a feature film directed by Adam Egypt Mortimer starring Joe Manganiello, Zolee Griggs, and Skylan Brooks. The film was released by RLJ Entertainment in 2020. As executive producers and equity investors in the project, Legion M has potential to earn revenue based on the success of the film. We also financed the soundtrack, providing an additional source of potential revenue, and secured a merchandising license that has allowed us to produce a line of consumer products tied to the film.

*SAVE YOURSELVES!* is a feature film directed by Alex Huston Fischer and Eleanor Wilson starring Sunita Mann and John Paul Reynolds. It was released by Bleecker Street Media in 2020. As a release partner with Bleecker Street, Legion M’s return on this project will be based on the success of the film in the first 2 years of release. In addition, we secured a merchandising license that has allowed us to produce a line of consumer products tied to the film.

*MEMORY: THE ORIGINS OF ALIEN* is a feature-length documentary directed by Alexandre O. Philippe. The film was released by Legion M and Screen Media in 2019. As the distributor of the film (in partnership with Screen Media), Legion M earns a portion of revenue from all sources associated with the film, including theatrical ticket sales, DVD sales, VOD sales/rentals, licensing/advertising fees paid by streamers, consumer products sales, etc. It’s worth noting that the film was released in 2019, which was the 40-year anniversary of *Alien*. We (in partnership with Screen Media) own distribution rights for the next 20 years, which means we will still own the rights to this film when the 50$^{th}$ and 60$^{th}$ anniversaries of the film roll around in 2029 and 2039. In addition, Legion M secured licenses from the Dan O’Bannon and H.R. Giger estates that allow us to sell a limited line of merchandise and media tied to the film.

*JAY AND SILENT BOB REBOOT* is a feature film directed by Kevin Smith starring Kevin Smith and Jason Mews. The film was released by Saban Films in 2019. As an equity investor in the film, Legion M’s return is tied to the success of both the movie and Kevin Smith’s “Reboot Roadshow”. In addition, Legion M secured a *Jay and Silent Bob Reboot* merchandise license that has allowed us to produce a line of consumer products tied to the film.

19

*MANDY* is a feature film directed by Panos Cosmatos starring Nicolas Cage, Andrea Riseborough, and Linus Roache. The film was released by RLI Entertainment in 2018. As an equity investor in the film, Legion M’s return on investment comes from revenue generated by both the film and the soundtrack. In addition, Legion M secured a merchandise license for *Mandy* (as well as likeness rights for Nicolas Cage, making us one of the few companies in the world to offer officially licensed Nicolas Cage merchandise), and offers a robust array of consumer products including t-shirts, props, plush, Funko Pops and Cheddar Goblin brand macaroni and cheese.

*THE FIELD GUIDE TO EVIL* is a feature film anthology produced by Ant Timpson and Tim League. The film was released in 2018. As an equity investor in the film, Legion M has earned revenue based on the success of the film.

## Development Projects

In addition to the Active Projects listed above, Legion M also has many development projects. Development generally refers to the earliest stages of the content production cycle, when production companies invest time, money, and “sweat equity” to create, develop, package, and sell movies, TV series and other entertainment projects. The goal of development is typically to finance or sell a project so it can be produced.

Development is one of the most speculative stages in the entertainment business because the odds of success for any given project are very low. There are millions of scripts and ideas in Hollywood, and while only a very small percentage get made, the potential value of a successful project can be quite large. At one point, *Game of Thrones* was just a series of books, and shows like “American Idol” were nothing more than a glimmer in the eye of producers. Every project we develop is a risk we take in the hopes of launching a new movie, series, or franchise.

Legion M has successfully generated revenue from some of our development projects by selling merchandise, media, and experiences related to those projects. This revenue helps offset our development costs and can build buzz that may increase the odds of success for the project. Ultimately, the goal of all our development projects is to reach production -- the revenue generated during the development phase is intended to reduce our costs and hopefully improve the project’s odds of success.

While many of Legion M’s development projects have not been announced, some of those that have been publicly announced are listed below:

### *MARY’S MONSTER*

In May of 2022, Legion M announced a partnership with Fullwell 73 and Rose Pictures for the development of the feature film *Mary’s Monster*. Farren Blackburn is attached to direct, and Clara Rugaard, Ferdia Walsh-Peelo, and Sebastian de Souza are attached as stars. Legion M has invested money into the development of the film with a potential for return if the project secures production. In addition, Legion M is serving as an executive producer with a stake in any back-end profits the film generates (if applicable).

### *TALES OF THE MOONLIGHT CUTTER*

In June of 2022, Legion M announced a partnership with Powerhouse Animation, New York Times bestselling author Jeff Yang, and David Uslan (*Constantine*) to develop Dale W. Berry’s comic *Tales of the Moonlight Cutter* into a scripted television series.

### *UNNAMED TV SERIES*

In August of 2021 Legion M signed a deal with a major streaming company for the sale of two seasons of an adult animated series developed by Legion M. Due to confidentiality agreements, we have not revealed the name of the project or the streaming partner. Between August 2021 and June 2022 the streamer hired a writing staff and produced outlines for 2 full seasons of episodes and scripts for 1 full season of episodes, however in June of 2022 the streamer told us that they had cut the series from their slate. They told us the series had not been cut due to

20

any creative issues/concerns, but because a change of strategic mandate for the streamer. As of September 2022 Legion M is negotiating a “turnaround agreement” with the streamer that would allow us to continue forward and attempt to sell the project to another buyer.

### DARKNIGHTS AND DAYDREAMS

In June of 2021, Legion M announced a partnership with Michael Uslan (producer of the *Batman* motion picture franchise) and Nederlander Worldwide Productions (a leading Broadway production company responsible for productions of shows that include *Hamilton*, *Lion King*, *Wicked*, etc.) for *Darknights and Daydreams*, a live theatrical production that tells the story of how a blue-collar comic book nerd in his 20’s ended up acquiring the movie rights for the Batman franchise and persevered for over 10 years to produce Tim Burton’s seminal 1989 release of *Batman* (Michael Keaton, Jack Nicholson, Kim Bassinger).

Credited as an Associate Producer for the project, Legion M contributed development money in exchange for revenue generating rights related to the production. In June of 2021, Legion M launched an IndieGoGo campaign giving fans an opportunity to “come along for the ride” in developing the play and generated $28.5K worth of revenue to help offset our contribution of development money.

### CALCULATED

In June of 2021, Legion M announced a partnership with OneDoor Studios for the development of a film based on Nova McBee’s novel *Calculated*. The OneDoor team, led by Executive Chairman John Lee Jr. (author of *The Producer’s Business Handbook*), Jason Brents, and Stephen Wollwerth, is developing the novel by equity crowdfunding the funds required to attach a writer and director to the project. As part of our partnership, Legion made a small cash investment in OneDoor’s equity crowdfunding campaign and agreed to support the project with promotion and development support in exchange for a stake in the project.

### DEFIANT

On March 10, 2021, Legion M announced *Defiant*, a new feature film project that is *Glory* meets *Ocean’s 11* in the thrilling TRUE story of the most audacious heist in US history. The project was brought to Legion M’s attention by fans in the company’s Facebook group and its screenplay was written by a Legion M member. The script received positive coverage from Endeavor Content, and we partnered with the Wolper Organization (producers of “Roots”), legendary actor, director, producer & Legion M advisor Bill Duke (*Mandy*, *Predator*, “Black Lightning”) and Marvin ‘Krondon’ Jones III to develop and produce the film.

### THE GRAY AREA

On March 26, 2021, Legion M announced a paranormal cop project that received high ratings in our M-Pulse survey; the graphic novel created by John Romita, Jr. (*Kick-Ass*) and Glen Brunswick (*Frequency*), written by Glen Brunswick, illustrated by John Romita, Jr. called *The Gray Area*. Legion M has attached producers Michael Uslan (*Batman*) and David Uslan (*Constantine*), as well as an unannounced “A-list” writer to the project to adapt it as a feature film or television series.

### THE BOOK

On April 8, 2021, Legion M announced *The Book*, a graphic novel from Arcana Comics co-created by Erik Hendrix and Michael David Nelsen. The story tracks a group of young friends backpacking through Italy who come upon a travel guide called “The Book,” which promises unique off-the-beaten-path adventures. However, they get more than they bargained for when The Book leads them into the clutches of a demonic cult. A thematic mashup of *The Da Vinci Code*, *Hostel*, *The Ninth Gate*, and *Final Destination*, the storyline leaves room to develop a franchise in which different travelers around the globe discover pages that lead them on strange and possibly dangerous adventures. Our producing partners on this project include Arcana Comics and David Uslan.

21

### DESTINATION FANTASTIC

On April 13, 2021, Legion M introduced 'Destination Fantastic,' a travelogue show in which the audience journeys to the exotic destinations behind some of the fantasy/sci-fi genre's greatest works of art, literature, music, and film. When possible, the series will talk directly with the creators of the world's greatest fantasy and genre works. We describe it as 'Anthony Bourdain: Parts Unknown' but for geek culture, hosted by famed game master and fine artist Stefan Pokorny and co-produced by game master, author, and illustrator Satine Phoenix.

### THE EMPEROR'S BLADES

On December 16, 2019, Legion M announced it had acquired rights to develop Brian Staveley's epic fantasy trilogy *Chronicle of the Unhewn Throne* as a television series titled after its first novel, *The Emperor's Blades*. *The Lord of the Rings* trilogy co-producer and second unit director Rick Porras (*Forrest Gump, Contact*) and writer/producer Robbie Silverman (*Hero*) joined as executive producers. Legion M attached two unannounced showrunners, and in 2020, we attached Powerhouse Animation ('Castlevania,' 'Blood of Zeus,' 'Seis Manos,' etc.) to develop the project.

### GIRL WITH NO NAME

In October of 2018, Legion M announced a partnership with Co-Op Entertainment's Laura Ivey (*Walking Out, Ithaca*) and Tanya Wexler (*Jolt, Hysteria, Buffaloed*) to develop *Girl with No Name*, a feature film and comic book based on Alex Ranarivelo's Slamdance award-winning screenplay.

In March of 2019, Legion M launched a Kickstarter for presale packages of a one-shot comic book that used select scenes from the screenplay to tell the origin story of the protagonist. In April 2019, the Kickstarter ended with over $135,000 in presales from 2,827 backers, making it the most-backed Kickstarter project for the single-issue comic book category at that time.

### ICONS: FACE TO FACE

'ICONS: Face to Face' is a virtual reality interview series that allows fans to stand face to face with the luminaries, titans, and leaders of our time. Created using state-of-the-art virtual reality recording technology, these 'virtual time capsules' allow fans to get as close as technologically possible to the people who shape our world. In January 2017, Legion M filmed a pilot episode of the 'ICONS' series featuring the legendary Stan Lee and his wife, Joan Lee. The two were interviewed in their home by actor/writer/director Kevin Smith.

The costs associated with filming the Stan Lee pilot were impaired (removed from our balance sheet) in 2021, however Legion M is continuing to develop the ICONS series, and still hopes to release the Stan Lee footage, as we believe it to be one of the last comprehensive interviews before Stan passed away.

### EVERMOR

In March of 2018, Legion M announced the development of a one-hour sci-fi/fantasy series 'Evermor,' created by Legion M members Perry Covington and Erik Figi. In February of 2019, Legion M announced that Andrew Cosby (writer of the 2019 *Hellboy* movie and co-creator of SyFy's hit series 'Eureka') has attached to the series as showrunner.

### AIRSHIP COWBOYS

In March of 2018, Legion M announced 'Airship Cowboys,' a half-hour adult animated comedy created by Legion M members Adam Beason and Jed Rigney.

22

## *PITCH ELEVATOR*

In October of 2016, Legion M built a full-size elevator set on the show floor of Stan Lee's Los Angeles Comic Con. Inside were a cameraman and a countdown timer. Guests were invited to step inside and give a two-minute pitch for their movie, television show, or virtual reality idea. We then built an online game that allowed members of the Legion to evaluate the pitches (over 400 of them) and narrow them down to the top 33. Once that was complete, we created a treatment for a digital series that would allow us to narrow the field to one champion who would win a development deal with Legion M.

## **Completed Projects**

Once an Active Project has reached a point where we don't expect it to earn significant additional revenue, we consider it completed. As of September 2022, Legion M has the following completed projects.

### *THE LEFT RIGHT GAME*

In May of 2020, Legion M announced a partnership with QCODE Media for the limited audio podcast series 'The Left Right Game' co-produced by and starring Tessa Thompson. Note that Legion M got involved with the podcast after the series had already been released and the rights to a television series (which are not included in our deal) had already been secured by Amazon Studios. Legion M made a small 'in-kind' investment for a potential cash return based on the success of the podcast. We also secured merchandising rights for the podcast as part of the deal and carry a line of products for 'The Left Right Game' in the Legion M store.

### *TOLKIEN*

In March of 2019, Legion M announced a partnership with Fox Searchlight (now owned by Disney) for the feature film *Tolkien*, which opened on May 10th in the US and May 3rd in the UK. Legion M supported the movie with meetups and online promotions in the US and UK in exchange for revenue, co-marketing, and other exclusives related to the film.

### *EXCELSIOR! A CELEBRATION OF THE AMAZING, FANTASTIC, INCREDIBLE & UNCANNY LIFE OF STAN LEE*

On January 30, 2019, Legion M partnered with Stan Lee's POW! Entertainment, Kevin Smith's Smodco, and Agents of Mayhem to produce the official public memorial service for Stan Lee, who passed away in late 2018. Held in the TCL Chinese Theatre IMAX in Hollywood, California, the event brought fans and talent together to celebrate the life of a man who inspired so many. In addition to courtyard ceremonies with a veteran color guard and press interviews, there were eulogies, poetry readings and panels with such luminaries as Mark Hamill, Lawrence Fishburne and Seth Green. The entire evening was hosted by Kevin Smith, and the event was used to raise awareness and funds for Stan Lee's charity of choice, The Hero Initiative. Legion M underwrote a significant cost of the production, which was partially reimbursed through sponsorships and tickets sales. As a memorial and tribute benefiting a non-profit foundation, this project was not intended to make money for the Company, but to generate marketing and awareness of Legion M by 'giving back' to Stan and the community of fans who loved him.

### *BAD SAMARITAN*

In 2018, we partnered with Dean Devlin's production and distribution company Electric Entertainment, Inc., forging an innovative P&A investment for the release of their feature film *Bad Samaritan* starring David Tennant and Robert Sheehan.

### *STAN LEE CELEBRATION*

23

On July 18, 2017, Legion M united fans around the world to give comic book icon Stan Lee a once-in-a-lifetime gift-an imprint ceremony at the TCL Chinese Theatre IMAX. This was the first time in history that fans united to present such an honor, and industry luminaries such as Marvel president Kevin Feige, comedian/director Kevin Smith, *Spawn* creator Todd McFarlane, “S.H.I.E.L.D.” star Clark Gregg and *Black Panther* star Chadwick Boseman presented speeches during the ceremony, followed by press interviews and meet and greet with Stan for fans and sponsors.

After the hand and footprint ceremony, Legion M hosted a “Tony Stark House Party” at a 9,000 square foot mansion in the Hollywood Hills for Stan and his 500 biggest fans, which was captured by a professional livestream production crew and broadcast to over 100,000 people watching live on Twitch. We monetized both the ceremony and after party with sponsorships, tickets and merchandise sales.

We had exceptional media coverage of the event, with dozens of outlets covering the ceremony (including a feature story in Variety Magazine), generating an estimated 11+ million media impressions, and creating a terrific PR moment for Legion M and our investors. As the producer of this event, Legion M covered all the costs associated with the handprint ceremony and party, and monetized the events with sales of sponsorships, tickets, and merchandise.

#### COLOSSAL

In early 2017, we partnered with distribution company NEON for the theatrical release and marketing of the feature film *Colossal* starring Anne Hathaway and Jason Sudeikis.

#### LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2022, Legion M had approximately $685,623 cash on hand, and approximately $108,604 of investor funds from Round 8 in escrow at StartEngine.

In May of 2020, we received an initial COVID related emergency grant of $10,000 from the low interest Economic Injury Disaster Loan (“EIDL”) program administered by the SBA.

In March of 2021 the Company received a second PPP loan for an amount of $108,573, which was completely forgiven by the SBA on February 14, 2022.

In January of 2021 the Company received an EIDL loan in the amount of $48,200. This loan has an interest rate of 3.75% and a repayment period of 30 years. Payments for this loan are began August 2022 and is $236 per month. The Company requested and was granted an increase to the existing EIDL loan. On April 4, 2022, the Company received an additional $101,700. The incremental monthly repayment is $516.

We do not currently have any other loans. We have not committed to make any capital expenditures. We have no bank line of credit or other financings arranged aside from a corporate American Express credit card that we typically pay off each month.

Over time, we expect to launch many more additional rounds of funding. Our long-term goal is to have one million shareholders as owners of the Company. That said, we cannot guarantee that we will have sufficient capital to finance our growth and planned business operations in the future or that such capital will be available to us on terms that are favorable to us. We are currently incurring operating deficits that are expected to continue for the foreseeable future. We’ve had multiple successful rounds of equity crowdfunding so far, but that does not guarantee that future rounds will also be successful. If we fail to raise adequate funds from future rounds, our plan would be to reduce operating expenses and conserve cash while seeking additional funding and finance partners.

#### TRENDS

24

The following sections contain a discussion of some of our planned activities in the coming months. There's no guarantee that we'll follow this plan or be able to execute it successfully. As a startup, we're constantly changing and evolving our plans as we react to current opportunities and market conditions.

### **Growing Our Community**

We believe that the size of our community is the single most important factor in the company's long-term chances of success. That's because we believe the strength, power, and value of our company depends on the size and strength of our community. A Legion of 1 is worthless, but a Legion of 1,000,000 could be invaluable. We also believe that as our community grows, so will our access to high quality entertainment projects and our ability to market, support, and monetize them.

After the uncertainty and disruptions caused by the pandemic, Legion M is hoping to expand our community in 2022 and 2023. Round 8, which closed in April of 2022, was our largest round ever with over $3.85MM worth of investments. We hope to break that record with our upcoming Round 9, which is expected to open in Q4 2022 and has a much larger cap ($20MM) and much larger marketing budget -- including marketing that will be partially subsidized by our partners at StartEngine. We're also working on projects with a number of high-profile actors (including William Shatner, Simon Pegg, Minnie Driver, Sean Astin, Ali Larter, Christopher Lloyd, etc.) that we believe can help us grow our community.

After ending Round 8 with over 35,000 shareholders, much of our focus will be pushing this number higher in 2023.

### **Projects**

Due largely to disruptions caused by the pandemic, Legion M did not have any major projects release in 2021, nor do we have any expected to release in 2022. That said, as of this writing (September 2022) we have stakes in 4 major films, all of which are currently in post-production with anticipated release dates in 2023. This includes:

- *The Man in the White Van* (produced by Legion M and Garrison Film)
- *This is Not Financial Advice* (equity investment by Legion M)
- *Nandor Fodor and the Talking Mongoose* (equity investment by Legion M)
- Untitled William Shatner documentary (produced by Legion M and Exhibit A Pictures, with a plan to raise equity investment directly from fans).

In addition to these films, we also have dozens of development projects for both film and TV (many of which are described above in the "Projects" section) that we hope to move forward, and we are continually in discussions regarding new projects to add to our slate. Over time, we've seen that the larger the company gets, the more access we have to higher quality opportunities. We expect this trend will continue.

### **Revenue**

At this stage in the company's development, we are not focused on short-term revenue, but instead on growing the size of our community and developing what we believe could become a significant long-term competitive advantage for the company. In addition, much of our revenue is project-based, which can be very "lumpy," with big chunks that come in all at once combined with smaller streams that can steadily accumulate over time. As a result of these factors, we expect that our near-term revenue will continue to be volatile as we develop and grow our community and our business.

25

# RIGHTS OF THE OTHER SECURITIES OF THE COMPANY

*The following descriptions summarize important terms of our capital stock. This summary reflects Legion M's Certificate of Amendment to the Amended and Restated Certificate of Incorporation and does not purport to be complete and is qualified in its entirety by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation and its Bylaws. For a complete description the company's capital stock, you should refer to our Certificate of Incorporation and our Bylaws and applicable provisions of the Delaware General Corporation Law.*

## General

Legion M's authorized capital stock consists of 200,000,000 shares of Common Stock, at $0.0001 par value, of which 170,000,000 shares are Class A Common Stock and the remaining 30,000,000 shares are Class B Common Stock. Class A Common Stock has the same rights and powers of, ranks equally to, shares ratably with and is identical in all respects, and as to all matters to Class B Common Stock; except that (i) each holder of Class B Common Stock is entitled to 10 votes per share of Class B Common Stock whereas each holder of Class A Common Stock is entitled to only 1 vote per share of Class A Common Stock, and (ii) there are certain restrictions to transfer of the Class B Common Stock that do not apply to the Class A Common Stock.

## Class A Common Stock

### Voting Rights

Each holder of Legion M's Class A Common Stock is entitled to one vote for each share on all matters submitted to a vote of the shareholders. Holders of Class A Common Stock at all times shall vote together with the holders of Class B Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of Legion M.

The holders of Class A Common Stock in this offering are subject to a drag-along provision as set forth in the Subscription Agreement, pursuant to which each holder of Class A Common Stock purchased in this offering agrees that, in the event the company's board and the holders of a majority of the votes of the outstanding shares of the company's Class A Common Stock and Class B Common Stock (taking into account the 10 votes per share voting of the Class B Common Stock) vote in favor of a sale of the company, then such holder of Class A Common Stock will vote in favor of the transaction if such vote is solicited, refrain from exercising dissenters' rights with respect to such sale of the company, and deliver any documentation or take other actions reasonably required, amongst other covenants. The enforceability of such provision as it relates to appraisal rights will be subject to the provisions of Delaware law.

### Dividends

Subject to preferences (of which, currently there are none) that may be applicable to any then outstanding class of capital stock having prior rights to dividends, shareholders of Legion M's Class A Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally-available funds. However, no dividend shall be declared or paid on shares of the Class A Common Stock unless the same dividend with the same record date shall be declared or paid on the shares of Legion M's Class B Common Stock. Legion M has never declared nor paid cash dividends on any of its capital stock and currently does not anticipate paying any cash dividends after this offering or in the foreseeable future.

26

## **Class B Common Stock**

### ***Voting Rights***

Each holder of Legion M's Class B Common Stock is entitled to ten votes for each share on all matters submitted to a vote of the shareholders. Holders of Class B Common Stock at all times shall vote together with the holders of Class A Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of Legion M.

### ***Dividends***

Subject to preferences (of which, currently there are none) that may be applicable to any then outstanding class of capital stock having prior rights to dividends, holders of Legion M's Class B Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally-available funds. However, no dividend shall be declared or paid on shares of the Class B Common Stock unless the same dividend with the same record date shall be declared or paid on the shares of Legion M's Class A Common Stock. Legion M has never declared nor paid cash dividends on any of its capital stock and currently does not anticipate paying any cash dividends after this offering or in the foreseeable future.

### ***Restrictions on Transfer***

No holder of Legion M's Class B Common Stock may sell, transfer, assign, pledge or otherwise dispose of or encumber any Class B Common Stock (or any Class A Common Stock into which it is converted) without Legion M's prior written consent. Legion M may withhold consent for any legitimate corporate purpose.

### ***Conversion Rights***

Each share of Class B Common Stock is convertible into one share of Class A Common Stock at the option of the holder at any time upon written notice to Legion M. Except for certain permitted transfers, each share of Class B Common Stock shall be automatically, without further action by its holder, converted into one share of Class A Common Stock, upon sale or assignment.

## **All Classes of Common Stock**

### ***Liquidation Rights***

In the event of Legion M's liquidation, dissolution or winding up, holders of Legion M's Class A and Class B Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of Legion M's debts and other liabilities and the satisfaction of any liquidation preference (of which, currently there are none) granted to the holders of any then outstanding class of capital stock having prior liquidation rights.

### ***Other Rights***

Holders of Legion M's Class A and Class B Common Stock have no preemptive, subscription or other rights, and there are no redemption or sinking fund provisions applicable to Legion M's Class A or Class B Common Stock.

### ***Forum Selection Provisions***

Section XI of our Amended and Restated Certificate of Incorporation and Section 48 of our Amended and Restated Bylaws contain exclusive forum provisions. With a few exceptions, the Court of Chancery in the State of Delaware will be the sole and exclusive forum for any holder of Legion M's Class A and Class B Common Stock (including a beneficial owner) to bring (i) any derivative action or proceeding brought on the company's behalf, (ii) any action

27

asserting a claim of breach of fiduciary duty owed by any director, officer or other employee, (iii) any action asserting a claim against the company, its directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law or the Corporation's certificate of incorporation or bylaws or (iv) any action asserting a claim against the company, its directors, officers or employees governed by the internal affairs doctrine. These sections shall not apply to actions arising under the federal securities laws.

Section 7 of our subscription agreement (which appears as an exhibit to the offering statement of which this offering circular forms a part) provides that the Court of Chancery in the State of Delaware is the exclusive forum for all actions or proceedings relating to the subscription agreement. However, this exclusive forum provision does not apply to actions arising under the federal securities laws.

## RECENT OFFERINGS OF SECURITIES

The Company has engaged in the following exempt offerings during the past three years:

- The company had Regulation Crowdfunding and Regulation A Funding rounds open during the year ended December 31, 2019 and during that period investors were able to purchase shares of Class A Common Stock. During the year ended December 31, 2019, 463,411 shares were sold generating $4,386,442. The company used the proceeds from that offering for project investments, general and administrative, compensation and benefits, sales and marketing, independent contractors, professional fees, cost of goods sold, and travel.
- The company had Regulation Crowdfunding and Regulation A Funding rounds open during the year ended December 31, 2020, and during that period investors were able to purchase shares of Class A Common Stock. During the year ended December 31, 2020, 98,790 shares were sold generating $1,188,839. The company used the proceeds from that offering for Legion M projects, general and administrative, compensation and benefits, sales and marketing, independent contractors, professional fees, cost of goods sold, and travel.
- The company had a Regulation CF offering open in 2021, which closed on April 29, 2021. 125,635 shares were sold in this offering during Fiscal 2021, generating $1,794,068. The company used and intends to use the proceeds from that offering for projects, general and administrative, compensation and benefits, sales and marketing, independent contractors, professional fees, cost of goods sold, and travel.
- The company had a Regulation CF offering opened on October 5th, 2021. As of February 2022, approximately 213,827 shares have been sold in this offering, generating approximately $2,840,310. The Company used and intends to use the proceeds from this offering for projects, general and administrative, compensation and benefits, sales and marketing, independent contractors, professional fees, cost of goods sold, and travel. See "Use of Proceeds," for details.
- The company has a Regulation A offering that opened October 12, 2022. As of Jan 11, 2023, the company has sold 987,206 shares (inclusive of Bonus Shares granted for free) of Class A Common Stock at a per share price of $1.65 for total gross proceeds of $1,509,179. The company intends to use the proceeds from this offering for expenses related to Round Rewards (gift cards, merchandise and other perks); development, project and operating expenses; and our marketing fund (money used for discretionary costs of marketing Legion M projects and fundraising, including money spent to promote our Regulation A offering).

28

# **OWNERSHIP AND CAPITAL STRUCTURE of LEGION M ENTERTAINMENT, INC.**

# **Ownership**

The following table shows who owns more than 20% of company's voting securities as of December 31, 2022:

| Name of Beneficial owner | Amount and class of securities held (1) | Percent of voting power prior to the Offering (2) |
| --- | --- | --- |
| Paul Scanlan | 7,333,310 shares of Class B Common Stock 1,440 shares of Class A Common Stock | 40.4% |
| Jeff Annison | 5,982,510 shares of Class B Common Stock 560 shares of Class A Common Stock | 32.9% |

(1) All shares are directly held.

(2) Based on a total of 16,492,620 shares of Class B Common Stock and 16,929,228 shares of Class A Common Stock, which are issued and outstanding as of December 31, 2022.

The following table describes our capital structure as of December 31, 2022:

| Class of Equity | Authorized Limit | Issued and Outstanding | Committed, Not-issued | Available |
| --- | --- | --- | --- | --- |
| Class A Common Stock | 170,000,000 | 16,929,228 | 0 | 153,070,772 |
| Class B Common Stock | 30,000,000 | 16,492,620 | 8,109,600 | 5,397,780 |
| Equity Derivatives | Authorized Limit (if any) | Issued and Outstanding | Committed, Not Issued | Available |
| 2016 Equity Incentive Plan | 7,539,600 | 4,411,880 |  | 3,127,720 |
| Warrants | 570,000 | 570,000 |  | 0 |
| Convertible Notes | Principal Amount | Interest Rate |  |  |
| N/A |  |  |  |  |

# **INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS**

None.

29

# Legion M Entertainment, Inc.

A Delaware Corporation

Financial Statements

June 30, 2022 and December 31, 2021

Legion M Entertainment, Inc.

# TABLE OF CONTENTS

|  | Page |
| --- | --- |
| FINANCIAL STATEMENTS AS OF JUNE 30, 2022 AND DECEMBER 31, 2021, FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND JUNE 30, 2021: |  |
| Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 (audited) | F-3 |
| Unaudited Statements of Operations for the six months ended June 30, 2022 and 2021 | F-4 |
| Unaudited Statements of Changes in Stockholders' Equity for the six months ended June 30, 2022 and December 31, 2021 | F-5 |
| Unaudited Statements of Cash Flows for the six months ended June 30, 2022 and 2021 | F-6 |
| Notes to Financial Statements | F-7-18 |

# **Legion M Entertainment, Inc.**  
 **Balance Sheets**  
 **As of June 30, 2022 and December 31, 2021**

|  | As of June 30, 2022 | As of December 31, 2021 |
| --- | --- | --- |
| ASSETS |  |  |
| Current assets: |  |  |
| Cash | $685,623 | $1,227,661 |
| Subscriptions receivable in escrow | 108,604 | 571,112 |
| Other receivable | 13,685 | 7,003 |
| Inventory | 245,358 | 146,501 |
| Accounts receivable | 59,169 | 30,817 |
| Prepaid expenses | 123,806 | 55,588 |
| Total current assets | 1,236,245 | 2,038,682 |
| Non-current assets: |  |  |
| Property and equipment, net | 5,587 | 4,158 |
| Investments in productions, net | 1,046,702 | 586,255 |
| Total non-current assets | 1,052,289 | 590,413 |
| TOTAL ASSETS | $2,288,534 | $2,629,095 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| Current liabilities: |  |  |
| Accounts payable | $89,627 | $414,655 |
| Deferred revenue | 286,506 | 246,612 |
| Note payable | - | 108,573 |
| Accrued expenses | 15,765 | 61,116 |
| Total current liabilities | 391,898 | 830,956 |
| Long-term liabilities: |  |  |
| Loan payable | 149,900 | 48,200 |
| Total long-term liabilities | 149,900 | 48,200 |
| Total liabilities | 541,798 | 879,156 |
| Stockholders' equity: |  |  |
| Class A common stock, $0.0001 par, 170,000,000 authorized, 16,221,700 and 15,417,830 issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 1,622 | 1,541 |
| Class B common stock, $0.0001 par, 30,000,000 authorized, 16,492,620 issued and outstanding, 16,465,900 vested at June 30, 2022 and 16,492,620 issued and outstanding, 16,465,900 vested at December 31, 2021 | 1,649 | 1,649 |
| Additional paid-in capital | 17,176,278 | 16,163,453 |
| Accumulated deficit | (15,432,813) | (14,416,704) |
| Total stockholders' equity | 1,746,736 | 1,749,939 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $2,288,534 | $2,629,095 |

See the accompanying notes, which are an integral part of these unaudited financial statements.

F-3

# **Legion M Entertainment, Inc.**  
 **Unaudited Statements of Operations**  
 **For the six months ended June 30, 2022 and 2021**

|  | For the six months ended June 30, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Revenue | $232,709 | $480,513 |
| Costs of net revenues | 201,197 | 333,566 |
| Gross profit | 31,512 | 146,947 |
| Operating expenses: |  |  |
| Compensation and benefits | 607,883 | 536,290 |
| Sales and marketing | 278,354 | 413,555 |
| Independent contractors | 51,888 | 5,810 |
| Professional fees | 96,348 | 113,062 |
| Travel expenses | 27,710 | 5,142 |
| General and administrative | 90,611 | 73,337 |
| Depreciation | 1,239 | 3,148 |
| Interest expense | 2,161 | 453 |
| Total operating expenses | 1,156,194 | 1,150,797 |
| Loss from operations | (1,124,682) | (1,003,850) |
| Other Income: |  |  |
| Grant | 108,573 | 154,881 |
| Total other income | 106,412 | 154,428 |
| Net loss | $(1,016,109) | $(848,969) |
| Weighted average common shares: |  |  |
| Basic and Diluted | 32,408,720 | 29,179,460 |
| Earnings per share: |  |  |
| Basic and Diluted | $(0.31) | $(0.29) |

*In the opinion of management all adjustments necessary in order to make the interim financial statements not misleading have been included.*

See the accompanying notes, which are an integral part of these unaudited financial statements.

F-4

# **Legion M Entertainment, Inc.**  
 **Unaudited Statements of Changes in Stockholders' Equity**  
 **For the periods ended June 30, 2022 and December 31, 2021**

|  | Class A Common Stock |  | Class B Common Stock |  | Additional Paid-in-Capital | Accumulated Deficit | Total Stockholders' Equity |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | Number of Shares | Amount | Number of Shares | Amount |  |  |  |
| Balance at December 31, 2020 | 12,589,170 | $1,238 | 16,372,430 | $1,637 | $12,405,603 | $(11,477,140) | $931,338 |
| Common stock issuances: |  |  |  |  |  |  |  |
| Class A ($0.0001 par, $1.43 issue) | 866,350 | 87 | - | - | 1,237,061 | - | 1,237,148 |
| Conversion of Class A to Class B | (120,190) | (12) | 120,190 | 12 | - | - | - |
| Stock based compensation | - | - | - | - | 119,412 | - | 119,412 |
| Offering costs | - | - | - | - | (76,486) | - | (76,486) |
| Share bonuses | - | - | - | - | (247,430) | - | (247,430) |
| Net loss | - | - | - | - | - | (848,969) | (848,969) |
| Balance at June 30, 2021 | 13,135,330 | $1,313 | 16,492,620 | $1,649 | $13,438,160 | $(12,326,109) | $1,115,013 |
| Common stock issuances: |  |  |  |  |  |  |  |
| Class A ($0.00001 par, $1.50 issue) | 1,804,560 | 180 | - | - | 2,706,660 | - | 2,706,840 |
| Bonus Shares | 477,940 | 48 | - | - | 699,323 | - | 699,371 |
| Stock based compensation | - | - | - | - | 102,612 | - | 102,612 |
| Offering costs | - | - | - | - | (181,813) | - | (181,813) |
| Share bonuses | - | - | - | - | (601,489) | - | (601,489) |
| Net loss | - | - | - | - | - | (2,090,595) | (2,090,595) |
| Balance at December 31, 2021 | 15,417,830 | $1,541 | 16,492,620 | $1,649 | $16,163,455 | $(14,416,704) | $1,749,939 |
| Common stock issuances: |  |  |  |  |  |  |  |
| Class A ($0.00001 par, $1.50 issue) | 745,290 | 75 | - | - | 1,117,860 | - | 1,117,935 |
| Bonus Shares | 58,580 | 6 | - | - | 87,864 | - | 87,870 |
| Stock based compensation | - | - | - | - | 135,504 | - | 135,504 |
| Offering costs | - | - | - | - | (195,433) | - | (195,433) |
| Share bonuses | - | - | - | - | (132,970) | - | (132,970) |
| Net loss | - | - | - | - | - | (1,016,109) | (1,016,109) |
| Balance at June 30, 2022 | 16,221,700 | $1,622 | 16,492,620 | $1,649 | $17,176,278 | $(15,432,813) | $1,746,736 |

See the accompanying notes, which are an integral part of these unaudited financial statements.

F-5

# **Legion M Entertainment, Inc.**  
 **Unaudited Statements of Cash Flows**  
 **For the six months ended June 30, 2022 and 2021**

|  | For the six months ended June 30, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Cash flows from operating activities |  |  |
| Net loss | $(1,016,109) | $(848,969) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Production costs charged to cost of net revenues | 56,261 | 167,213 |
| Depreciation | 1,239 | 3,148 |
| Stock compensation expense | 92,317 | 119,412 |
| Note forgiveness | (108,573) | (139,868) |
| Changes in operating assets and liabilities: |  |  |
| (Increase)/decrease in other receivables | (6,682) | (1,139) |
| (Increase)/decrease in inventory | (98,857) | (16,220) |
| (Increase)/decrease in accounts receivable | (28,352) | (4,480) |
| (Increase)/decrease in accrued revenue | - | 22,804 |
| (Increase)/decrease in prepaid expenses | (68,218) | (12,536) |
| Increase/(decrease) in accounts payable | (325,028) | (10,253) |
| Increase/(decrease) in deferred revenue | 39,894 | 25,786 |
| Increase/(decrease) in accrued expenses | (45,351) | 223,073 |
| Net cash used in operating activities | (1,507,459) | (472,029) |
| Cash flows from investing activities |  |  |
| Purchase of property and equipment | (2,668) | (2,790) |
| Investments in productions | (516,708) | (17,154) |
| Net cash provided by (used in) investing activities | (519,376) | (19,944) |
| Cash flows from financing activities |  |  |
| Proceeds from issuance of Class A common stock | 1,578,530 | 967,646 |
| Note payable | 101,700 | 156,773 |
| Offering costs | (195,433) | (76,486) |
| Net cash provided by financing activities | 1,484,797 | 1,047,933 |
| Net change in cash | (542,038) | 555,960 |
| Cash at beginning of period | 1,227,661 | 158,871 |
| Cash at end of period | $685,623 | $714,831 |
| Supplemental disclosure of cash flow information |  |  |
| Cash paid for interest | $ - | $ - |
| Cash paid for income taxes | $ - | $ - |

See the accompanying notes, which are an integral part of these unaudited financial statements.

F-6

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

# **NOTE 1: NATURE OF OPERATIONS**

Legion M Entertainment, Inc. (the “Company” or “Legion M”), is a corporation organized March 4, 2016 under the laws of Delaware. The Company was formed as a fan-owned entertainment company. The Company partners with creators and other entertainment companies -- from independent filmmakers to large Hollywood studios and distributors -- to develop, produce, distribute, market and monetize entertainment content including movies, television shows, virtual reality, digital content, events, and more.

Revenue totaled $232,709 and $480,513 for the six-month periods ended June 30, 2022 and 2021, respectively. The Company’s activities since inception have consisted of formation activities; research and development; raising capital; business development; developing, financing, producing, marketing, and releasing entertainment projects; establishing and growing the Legion M community and culture; building infrastructure to support the community; and marketing for principal operations. The Company remains dependent upon additional capital resources and is subject to significant risks and uncertainties; including failing to secure additional funding.

# **NOTE 2: GOING CONCERN**

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a business that is in early growth phase and therefore has just started generating revenues from principal operations. Consistent with this early phase, the Company has no profit since inception, incurred negative operating cash flows, and has sustained net losses of $1,016,109 and $848,969 for the for the periods ended June 30, 2022 and 2021, respectively. As of June 30, 2022, the Company has current assets that exceed current liabilities by $844,346. The Company expects near-term revenue from various projects and investment proceeds. However, the Company’s ability to continue as a going concern for the next twelve months is dependent upon its plan to raise more capital from investors. The company has successfully raised more than $15,000,000 over eight rounds of funding, and expects to open a ninth round later this year. No assurance can be given that the Company will be successful in these efforts. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time without raising additional funding. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

# **NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

# Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).

The Company adopted the calendar year as its basis of reporting.

# Stock Split

From December 27, 2021 through January 7, 2022 Legion M held a special stockholders’ meeting during which a 10-for-1 stock split was passed by the outstanding Class A Common Stock and Class B Common Stock.

On July 15, 2022, the Company effected a 10-for-1 forward stock split of its authorized, designated, issued and outstanding shares of common stock. Accordingly, all share and per share amounts of the Company for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. The amended and restated articles of incorporation increased the authorized stock from 100,000,000 shares (post stock split) of common stock with a par value of $0.0001 to 200,000,000 shares (post stock split) of common stock with a par value of $0.0001 with 170,000,000 shares of the authorized common stock designated as Class A Common Stock and 30,000,000 shares of the common stock designated as Class B Common Stock.

---

F-7

# **Legion M Entertainment, Inc.**  
**NOTES TO UNAUDITED FINANCIAL STATEMENTS**  
**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**---

### Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

### Cash Equivalents

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less. As of June 30, 2022, the cash balance exceeded the FDIC insured limits by $435,623.

### Receivable and Allowance for Doubtful Accounts

Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability based on past credit history with clients and other factors. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions. As of June 30, 2022 and December 31, 2021, no associated allowances for doubtful accounts were established.

### Subscription Receivable

The Company records stock issuances at the effective date. If the contribution is not funded upon issuance, the Company records a subscription receivable as an asset on a balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under FASB ASC 505-10-45-2, the contributed capital is reclassified as a contra account to stockholders’ equity on the balance sheet.

### Other Receivables

Other receivables are primarily due from payment processors and gateways (e.g. Paypal, Stripe, Wefunder).

### Inventory

Inventories are comprised of merchandise (t-shirts, lapel pins, hats, etc.) that are used for marketing and/or for sale in the Legion M store (www.legionm.com/store). Inventories are stated at the lower of cost or market value. Cost is determined using the average costing method. Inventory balances as of June 30, 2022 and December 31, 2021 were $245,358 and $146,501, respectively. The Company periodically reviews inventory quantities and values and adjusts for obsolete or impaired inventory based primarily on management’s estimated forecast of product demand. As a result of that review, no impairment losses were recorded during the periods ended June 30, 2022 or 2021. The fair value of the inventory was reduced and $32,222 was recorded as an impairment loss during the year ended December 31, 2021.

### Production Investments

The Company has cost investments in productions. The fair value of these investments is dependent on the performance of the investee productions as well as volatility inherent in the external markets for these investments. In assessing the potential impairment of these investments, we consider these factors as well as the forecasted financial performance of the investee production and market values, where available. If these forecasts are not met or market values indicate an other-than-temporary decline in value, impairment charges may be required.

### Filmed Entertainment and Production Costs

In accordance with ASC 926, “Entertainment-Films” (“ASC 926”), Filmed Entertainment costs include capitalized production costs, development costs, overhead and capitalized interest costs, net of any amounts received from outside investors. These costs, as well as participations, are recognized as operating expenses for each individual production based on the ratio that the current period’s gross revenues for such production bear to management’s estimate of its total remaining ultimate gross revenues. Marketing, distribution and general and administrative costs are expensed as incurred. The Company has set a minimum threshold of $10,000 before capitalizing the costs. Management bases its estimates of ultimate revenue for each production on a variety of factors, including: historical performance of similar productions, market research and the existence of future firm commitments. Management regularly reviews, and revises when necessary, its total revenue estimates on a title-by-title basis, which may result in a change in the rate of amortization and/or a write-down of the asset to fair value amount. Costs for productions not produced are written-off at the time the decision is made not to develop the story or after ten years.

---

F-8

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

Production costs are stated at the lower of unamortized cost or estimated fair value on a production basis. Revenue forecasts for productions are continually reviewed by management and revised when warranted by changing conditions. Results of operations in future years are dependent upon the amortization of production costs and may be significantly affected by periodic adjustments in amortization rates. As a result, the Company's financial results fluctuate from period to period.

If estimates of ultimate revenues change with respect to a production, causing reductions in fair values, the Company may be required to write down all or a portion of the related unamortized costs of the production to its estimated fair value. No assurance can be given that unfavorable changes to revenue and cost estimates will not occur, which may result in significant write-downs affecting our results of operations and financial condition.

Consistent with this guidance, at the end of 2021, the Company reduced the expectations on certain projects. As of December 31, 2021, the fair value of the investments was reduced by $140,556. No reductions or impairments were recorded for the period ended June 30, 2022.

# **Property and Equipment**

The Company has a policy to capitalize expenditures with useful lives in excess of one year and costs exceeding $1,000. Property and equipment is stated at cost. The cost of additions and substantial improvements to property and equipment is capitalized. The cost of maintenance and repairs of property and equipment is charged to operating expenses. Property and equipment is depreciated using straight-line methods over their estimated economic lives. Property and equipment is reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No assets were impaired as of June 30, 2022 or December 31, 2021. There were $2,668 and $2,790 of Property and equipment additions during the periods ended June 30, 2022 and 2021, respectively. Depreciation expense totaled $1,239 and $3,148 for the periods ended June 30, 2022 and 2021, respectively.

|  | As of June 30, 2022 | As of December 31, 2021 |
| --- | --- | --- |
| Original Cost | $55,513 | $52,845 |
| Accumulated Depreciation | (49,926) | (48,687) |
| Book Value | $5,587 | $4,158 |

# **Emergency Relief**

The Coronavirus Aid, Relief, and Economic Security Act ('CARES Act') was signed into law on March 27, 2020 to provide fiscal relief to U.S. individuals and businesses as a result of the economic hardship caused by the COVID-19 pandemic. One of the main components of the CARES Act is the Paycheck Protection Program ('PPP'), a loan program designed to provide a direct incentive for small businesses to keep their employees on payroll. The Small Business Administration ('SBA'), which administers the PPP, will forgive loans to PPP recipients if all employees are kept on payroll at their current compensation levels after the loan is made and the money is used for payroll, rent, mortgage interest, or utilities. Guidance for the treatment and forgiveness of CARES act funds is still being finalized.

In May 2020, the Company was approved for a PPP loan of $139,868. The Company applied for and was granted complete forgiveness for the $139,868 PPP Round 1 loan. The SBA completely forgave this loan in March 2021 and the amount is recorded on the statement of operations as other income

F-9

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

The Company applied for and was granted relief from California and North Carolina state programs totaling $15,013. This amount has been recorded as other income on the statement of operations for the period ended June 30, 2021.

An EIDL Loan of $48,200 was granted to the Company on January 20, 2021. The terms provide for 3.75% interest and require monthly payments of $236 per month commencing in July 2022 for 30 years. The Company recognized $2,161 and $453 of accrued interest expense related to this loan during the periods ended June 30, 2022 and 2021, respectively. The outstanding principal balance of the EIDL Loan was $48,200 as of June 30, 2022 and December 31, 2021.

| Year | Principal Payments |
| --- | --- |
| 2021 | $ - |
| 2022 | - |
| 2023 | - |
| 2024 | - |
| 2025 | 780 |
| 2026 | 1,068 |
| Thereafter | 46,351 |
|  | $48,200 |

The Company also applied for and was approved for PPP Round 2 loan of $108,573 on March 15, 2021. As of December 31, 2021 the Company had not yet applied for forgiveness of this loan. The Company applied for and was granted complete forgiveness for the $108,573 PPP Round 2 loan on February 14, 2022.

# **Fair Value of Financial Instruments**

The Company discloses fair value information about financial instruments based upon certain market assumptions and pertinent information available to management. Financial Accounting Standards Board ('FASB') guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the balance sheet approximate fair value.

# **Concentrations of Credit Risks**

The Company's financial instruments that are exposed to concentrations of credit risk consist of its cash. The Company will place its cash and cash equivalents with financial institutions of high credit worthiness. The Company's management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

F-10

Legion M Entertainment, Inc.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021---

### Revenue Recognition

ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.

Revenue totaled $232,709 and $480,513 for the six-month periods ended June 30, 2022 and 2021, respectively. Revenue for both periods includes revenue from Legion M projects (including fees for services, consumer products sales and licensing related to those projects), ticket-sales and sponsorships related to Legion M events, and sales of Legion M branded merchandise. Revenue attributable to Legion M projects will be recognized over multiple months or years.

### Stock-Based Compensation

The Company measures employee stock-based awards at grant-date fair value and recognizes employee compensation expense on a straight-line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and expected stock price volatility. The Company used the Black-Scholes option pricing model to value its stock option awards and warrants. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The expected life of stock options was estimated using the “simplified method,” which is the midpoint between the vesting start date and the end of the contractual term, as the Company has limited historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock options grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of options grants. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. The estimation of the number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts are recognized as an adjustment in the period in which estimates are revised.

### Offering Costs

The Company complies with the requirements of FASB ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized as deferred offering costs on the balance sheet. The deferred offering costs are charged to stockholders’ equity upon the completion of an offering or to expense if the offering is not completed.

---

F-11

Legion M Entertainment, Inc.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021

# Income Taxes

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, *Income Taxes*. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will be realized. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. The Company has determined that there are no material uncertain tax positions.

The Company files income tax returns in the United States and is subject to income tax examinations for its U.S. federal income taxes for the preceding three years and, in general, is subject to state and local income tax examinations for the preceding three years. Tax returns for 2019 have been filed. Tax returns for 2020 will be filed with an approved extension. The Company is not presently subject to any income tax audit in any taxing jurisdiction.

The Company accounts for income taxes with the recognition of estimated income taxes payable or refundable on income tax returns for the current period and for the estimated future tax effect attributable to temporary differences and carryforwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized in the immediate future. As of June 30, 2022 and December 31, 2021, the Company had total taxable net operating loss carryforwards of approximately $14,340,376 and $13,262,222, respectively. The Company is expected to pay Federal and California income taxes at rates of approximately 21% and 8.8%, respectively for the period ended June 30, 2022 and for the period ended December 31, 2021 and has used an effective blended rate of 28.0% to derive a net tax asset as of June 30, 2022 and December 31, 2021 of approximately $4,502,931 and $4,167,809, respectively. The Company cannot presently anticipate the realization of a tax benefit on its net operating loss carryforward. Accordingly, the Company recorded a full valuation allowance against its deferred tax assets as of June 30, 2022 and December 31, 2021. Deferred tax assets and liabilities resulted from net operating losses, depreciation/amortization, organizational costs, deferred revenue and stock-based compensation.

The following table reconciles the statutory income tax rates to actual rates based on income or loss before income taxes as of June 30, 2022 and December 31, 2021.

|  | As of June 30, 2022 (unaudited) | As of December 31, 2021 (audited) |
| --- | --- | --- |
| Federal income tax rate | 21.0% | 21.0% |
| State income tax rate, net of federal benefit | 7.0% | 7.0% |
| Valuation allowance | -28.0% | -28.0% |
| Effective tax rate | 0.0% | 0.0% |

F-12

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

|  | As of June 30, 2022 (unaudited) | As of December 31, 2021 (audited) |
| --- | --- | --- |
| Deferred tax assets: |  |  |
| Stock based compensation | $489,977 | $456,562 |
| Net operating loss carryforward | 4,012,954 | 3,711,247 |
| Net deferred tax assets | 4,502,931 | 4,167,809 |
| Less: Valuation allowance | (4,502,931) | (4,167,809) |
| Net deferred tax asset | $ - | $ - |

# **Net Earnings or Loss per Share**

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net earnings or loss per share if their inclusion would be anti-dilutive.

|  | As of June 30, 2022 | As of December 31, 2021 |
| --- | --- | --- |
| Warrants | 570,000 | 570,000 |
| Options | 4,411,880 | 4,366,880 |
| Total dilutive securities | 4,981,880 | 4,936,880 |

As all potentially dilutive securities are anti-dilutive as of June 30, 2022 and December 31, 2021, diluted net loss per share is the same as basic net loss per share for each year.

# **NOTE 4: STOCKHOLDERS' EQUITY**

The Company's articles of incorporation, as amended and restated, authorize 200,000,000 shares common stock (post stock split) with a par value of $0.0001, and authorize the creation of two classes of common stock, 'Class A Common Stock' and 'Class B Common Stock,' with 170,000,000 shares of the authorized common stock designated as Class A Common Stock and 30,000,000 shares of the common stock designated as Class B Common Stock. The Class B Common Stock contains a voting rights preference of 10 votes per share and is convertible into Class A Common Stock at the option of the holder.

In 2016, the Company converted $501,281 of convertible notes and related interest outstanding to 976,480 shares of Class B Common Stock. All of the shares vested immediately upon conversion.

During the period from March 4, 2016 (inception) to December 31, 2016, 15,460,400 shares of Class B Common Stock were issued at prices ranging from $0.00001 to $0.0001 per share, yielding proceeds of $1,501. This amount was recorded as an expense for services rendered by the stockholders.

These shares of Class B Common Stock are subject to vesting over periods from immediate to 48 months with vesting contingent upon continued service with the Company. The Company considered its negative book value and limited operating activity as of these share issuances and determined the issuance prices approximated the fair value of the shares issued. As of June 30, 2022 and December 31, 2021, 16,465,900 and 16,465,900 of these outstanding Class B Common Stock have vested, respectively. As of June 30, 2022 and December 31, 2021, the 26,720 unvested shares will either vest or expire by April 2026.

F-13

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

In September 2016, the Company completed an equity offering through Regulation Crowdfunding and raised gross proceeds of $999,999 for the issuance of 1,428,570 shares of Class A Common Stock. The offering price for this offering was $0.70 per share.

During the period from March 4, 2016 (inception) to December 31, 2016, the Company completed equity investments outside of the crowdfunding campaign providing proceeds of $193,522 for the issuance of 276,460 shares of Class A Common Stock. The offering price for this offering was $0.70 per share.

The Company had a Regulation Crowdfunding and a Regulation A funding round open during the year ended December 31, 2017 and during that period investors were able to purchase shares of Class A Common Stock. The share price for these offerings were $0.75 per share. During the year ended December 31, 2017, 2,728,700 shares were sold generating $2,038,339.

The Company had a Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2018 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $0.75 per share through May 14, 2018, $0.83 per share through October 3, 2018 and $0.89 per share for the remainder of the year. During the year ended December 31, 2018, 2,268,980 shares were sold generating $1,923,652.

The Company had Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2019 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $0.89 per share through July 15, 2019, $1.00 per share through November 6, 2019 and $1.07 per share for the remainder of the year. During the year ended December 31, 2019, 4,634,110 shares were sold generating $4,386,442.

The Company had Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2020 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $1.07 per share through April 29, 2020, and $1.43 per share for the remainder of the year. During the year ended December 31, 2020, 987,900 shares were sold generating $1,188,839.

The Company had Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2021 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $1.43 per share through April 30, 2021, and $1.50 per share for the remainder of the year. During the year ended December 31, 2021, 2,670,910 shares were sold generating $3,943,988.

For the rounds that were active as of December 31, 2021 and 2020, investors had the opportunity to choose a reward (e.g. gift card, bonus shares (defined below), tickets to an event, etc.) based on amount of money they invest.

One of those rewards are bonus shares, which was granted to investors for free once their investment closes. The company issued 243,600 bonus shares related to this round. When factoring in bonus shares, the effective share price paid by each investor was approximately $1.20 for 2020 and 2021.

For the round that was active as of December 31, 2021 and during the six-month period ended June 30, 2022, with a per share price of $1.50 paid by investors for shares of Class A Common Stock, investors have the opportunity to choose a reward (e.g. gift card, bonus shares (defined below), etc.) based on amount of money they invest.

One of those rewards are bonus shares, which are granted to investors for free once their investment closes. The company issued 58,580 and 234,340 bonus shares related to this round during the periods ended June 30, 2022 and December 31, 2021, respectively. When factoring in bonus shares, the effective share price paid by each investor was approximately $1.34.

As of 2020, the total reward value owed for the shares sold in the year was undeterminable as not all reward choices had not been made. The Company made an estimate for the maximum gift card reward owed of $111,384 as being the largest cash amount required and recorded a liability for such to accrued expenses in the balance sheet as of December 31, 2020 and as a reduction to additional paid-in capital for the year ended December 31, 2020. As of December 31, 2021, all applicable awards for shares issued and outstanding had been determined. As many rewards were bonus shares and not gift cards, the total reduction to additional paid-in capital for the year ended December 31, 2021 was $848,919.

---

F-14

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

The Company received partial proceeds disbursement of funds committed from these equity offerings during the periods ended June 30, 2022 and the year ended December 31, 2021 of $967,646 and $3,318,054, respectively. As part of the normal process of investors purchasing stock, those purchases are held in escrow by Wefunder and StartEngine, the Company's funding portals. At the end of each month, there is a balance of funds held by Wefunder and Start Engine for future distribution to the Company. The escrow balance as of June 30, 2022 and December 31, 2021 was $108,604 and $571,112, respectively.

In October 2018, the Company received a prepayment totaling $100,000 for a future investment in the Company from one of the Company's largest investors. As the funds had been received but the investment contracts not finalized, the $100,000 prepayment was included on the balance sheet as a 'Pending investment' liability as of December 31, 2018. That investment was finalized in 2019 and the Company issued shares to this investor at $0.83 per share, consistent with other investors at that time and included in the 2019 issuances discussed above. During 2021, it was determined that this investor should have received Class B shares. Therefore, 120,190 shares were converted from Class A shares to Class B shares.

As of June 30, 2022 and December 31, 2021, the Company had 16,221,700 and 15,417,830 shares of Class A Common Stock and 16,492,620 and 16,492,620 shares of Class B Common Stock issued and outstanding, all respectively.

# **NOTE 5: SHARE-BASED PAYMENTS**

# **Stock Plan**

On April 12, 2016, the Company adopted its 2016 Equity Incentive Plan (the 'Plan'). The Plan authorizes options to purchase up to 2,539,600 shares of Class B Common Stock. On November 3, 2016, the Company amended its 2016 Equity Incentive Plan to authorize an additional 5,000,000 options to purchase Class B Common Stock. As of June 30, 2022 and December 31, 2021, there were 3,127,720 and 3,172,720 options available for issuance, respectively.

As of June 30, 2022 and December 31, 2021, the Company had issued and outstanding 4,411,880 and 4,366,880 options to purchase Class B Common Stock under the Plan, respectively.

|  | June 30, 2022 |  | December 31, 2021 |  |
| --- | --- | --- | --- | --- |
|  | Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price |
| Outstanding - beginning of period | 4,366,880 | $0.71 | 3,914,260 | $0.66 |
| Granted | 45,000 | $1.25 | 452,620 | $1.14 |
| Exercised | - |  | - |  |
| Forfeited | - |  | - |  |
| Outstanding - end of period | 4,411,880 | $0.72 | 4,366,880 | $0.71 |
| Exercisable at end of period | 3,854,090 | $0.74 | 3,691,770 | $0.72 |
| Intrinsic value of options outstanding at year-end | $3,441,266 |  | $3,440,665 |  |
| Weighted average grant date fair value of options granted during period | $0.69 |  | $0.63 |  |
| Weighted average duration (years) to expiration of outstanding options at period-end | 5.6 |  | 6.1 |  |

F-15

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

These options vest over different schedules with some vesting immediately and others vesting over periods from 1 to 10 years. The maximum term for stock options granted under the Plan may not exceed ten years from the date of grant. The options expire 10 years after the date of grant. The remaining outstanding options will vest over a weighted average period of 31 months.

The assumptions utilized for valuing stock-based grants for compensation and marketing expense during the periods ended June 30, 2022 and December 31, 2021:

|  | June 30, 2022 | December 31, 2021 |
| --- | --- | --- |
| Risk Free Interest Rate | 2.00% | 0.64%-1.07% |
| Expected Dividend Yield | 0.00% | 0.00% |
| Expected Volatility | 60.00% | 60.00% |
| Expected Life (years) | 6.0 | 5.6 - 7.0 |
| Fair Value per Stock Option | $0.71 | $0.61-$0.67 |

The Company recognizes stock-based compensation on a straight-line basis over the options' vesting periods. Based on the issue dates, the per share value and the vesting period, the Company determined total stock-based compensation and additional paid-in capital to be to be $76,224 and $92,317 for the periods ended June 30, 2022 and 2021, respectively.

Unrecognized share-based compensation expense was $358,301 and $419,523 as of June 30, 2022 and December 31, 2021, respectively. This unrecognized compensation expense expected to be recognized over a weighted-average period of approximately 31 months and 38 months as of June 30, 2022 and December 31, 2021, respectively.

# **Warrants**

In April 2016, the Company issued 270,000 warrants to purchase Class B shares of common stock. The shares available under this warrant vest pro-rata over two years on a monthly basis (1/24 vest per month). The stock purchase warrants expire at the earliest of: ten years after their date of issuance (2026), any change in control, or an initial public offering. The exercise price for the common stock warrants is $0.001 per share. The number of shares or exercise price will be adjusted in the event of any stock dividend, stock splits or recapitalization of the Company. As of December 31, 2021 and 2020, 270,000 and 270,000 of these warrants had vested, respectively. The Company determined the grant date fair value of these warrants under a Black-Scholes calculation to be $188,759, and recognized $0 of such to additional paid-in capital and as marketing expense during the years ended December 31, 2021 and 2020. All associated expense was recorded in prior periods, commensurate with the vesting of the warrants. The assumptions and inputs for the Black-Scholes calculation for the warrants are the same terms as used for valuing the options issued on April 12, 2016.

In June 2017, the Company issued 50,000 warrants to purchase Class B shares of common stock. The shares available under this warrant vested immediately on issuance. The stock purchase warrants expire at the earliest of: ten years after their date of issuance (2027), any change in control, or an initial public offering. The exercise price for the common stock warrants is $0.75 per share. The number of shares or exercise price will be adjusted in the event of any stock dividend, stock splits or recapitalization of the Company. The Company determined the fair value of these warrants under a Black-Scholes calculation to be $19,400 and recorded that value as an adjustment to additional paid-in capital and as an investment in a project in 2017. The assumptions and inputs for the Black-Scholes calculation for the warrants are the same terms as used for valuing the options issued on June 9, 2017.

In October 2021, the Company issued 250,000 warrants to purchase Class B shares of common stock. The shares available under this warrant vest pro-rata over two years on a monthly basis (1/24 vest per month). The stock purchase warrants expire at the earliest of: ten years after their date of issuance (2031), any change in control, or an initial public offering. The exercise price for the common stock warrants is $1.25 per share. The number of shares or exercise price will be adjusted in the event of any stock dividend, stock splits or recapitalization of the Company. As of June 30, 2022 and December 31, 2021, 83,333 and 20,830 of these warrants had vested, respectively. The Company determined the grant date fair value of these warrants under a Black-Scholes calculation to be $172,750, and recognized $43,188 of such to additional paid-in capital and as stock-based compensation during the period ended June 30, 2022.

F-16

# **Legion M Entertainment, Inc.**

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021**

The assumptions utilized for valuing these warrants in the period ended December 31, 2021 are as follows:

|  | 2021 |
| --- | --- |
| Risk Free Interest Rate | 1.11% |
| Expected Dividend Yield | 0.00% |
| Expected Volatility | 60.00% |
| Expected Life (years) | 6.0 |
| Fair Value per Warrant | $0.69 |

As of June 30, 2022 and December 31, 2021, there was $115,167 and $158,354 of unrecognized share-based compensation expense, respectively.

As of June 30, 2022 and December 31, 2021, there were 570,000 and 570,000 warrants outstanding with weighted average exercise price per share of $0.61 and $0.61, and 403,330 and 340,830 warrants vested with weighted average exercise price per share of $0.35 and $0.19, all respectively.

# **NOTE 6: RECENT ACCOUNTING PRONOUNCEMENTS**

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of ASU 2016-02 has had no material impact on the Company's financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

# **NOTE 7: SUBSEQUENT EVENTS**

# Next Step Financing Offering

Legion M is expecting to have one or more additional rounds of equity crowdfunding under the JOBS Act in 2021. We expect that many successive rounds of funding will be needed to achieve the Company's long-term goals.

# Stock Split

From December 27, 2021 through January 7, 2022 Legion M held a special stockholders' meeting during which a 10-for-1 stock split was passed by the outstanding Class A Common Stock and Class B Common Stock.

On July 15, 2022, the Company effected a 10-for-1 forward stock split of its authorized, designated, issued and outstanding shares of common stock. Accordingly, all share and per share amounts of the Company for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. The amended and restated articles of incorporation increased the authorized stock from 100,000,000 shares (post stock split) of common stock with a par value of $0.0001 to 200,000,000 shares (post stock split) of common stock with a par value of $0.0001 with 170,000,000 shares of the authorized common stock designated as Class A Common Stock and 30,000,000 shares of the common stock designated as Class B Common Stock.

F-17

Legion M Entertainment, Inc.

# **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

As of June 30, 2022 and December 31, 2021, and for the six-month periods ended June 30, 2022 and 2021

# Management's Evaluation

Management has evaluated subsequent events through September 27, 2021, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in these financial statements.

F-18---

# Legion M Entertainment, Inc.

## A Delaware Corporation

Financial Statements and Independent Auditor's Report

December 31, 2021 and 2020

# Legion M Entertainment, Inc.

## TABLE OF CONTENTS

|  | Page |
| --- | --- |
| INDEPENDENT AUDITOR'S REPORT | 1-2 |
| FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2020 AND FOR THE YEARS THEN ENDED: |  |
| Balance Sheets | 3 |
| Statements of Operations | 4 |
| Statements of Changes in Stockholders' Equity | 5 |
| Statements of Cash Flows | 6 |
| Notes to Financial Statements | 7-18 |

![img-0.jpeg](img-0.jpeg)

To the Board of Directors of  
Legion M Entertainment, Inc.  
Emeryville, California

# INDEPENDENT AUDITOR'S REPORT

## Opinion

We have audited the accompanying financial statements of Legion M Entertainment, Inc. (the “Company”) which comprise the balance sheets as of December 31, 2021 and 2020, and the related statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

## Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

## Substantial Doubt About the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements, the Company has no profits since inception, incurred negative operating cash flows, and has sustained net losses of $2,939,564 and $2,225,398 for the years ended December 31, 2021 and 2020, respectively. The Company has an accumulated deficit of $14,416,704 as of December 31, 2021. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

## Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.

## Artesian CPA, LLC

1624 Market Street, Suite 202 | Denver, CO 80202  
p: 877.968.3330 f: 720.634.0905  
info@ArtesianCPA.com | www.ArtesianCPA.com

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

### Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit 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 Company's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ Artesian CPA, LLC

Denver, Colorado

April 23, 2022, except for the stock split described in Notes 3 and 7, for which the date is July 27, 2022

### Artesian CPA, LLC

1624 Market Street, Suite 202 | Denver, CO 80202

p: 877.968.3330 f: 720.634.0905

info@ArtesianCPA.com | www.ArtesianCPA.com

# **Legion M Entertainment, Inc.**  
 **Balance Sheets**  
 **As of December 31, 2021 and 2020**

|  | As of December 31, 2021 | As of December 31, 2020 |
| --- | --- | --- |
| ASSETS |  |  |
| Current assets: |  |  |
| Cash | $1,227,661 | $158,871 |
| Subscriptions receivable in escrow | 571,112 | 94,726 |
| Other receivable | 7,003 | 7,070 |
| Inventory | 146,501 | 133,668 |
| Accounts receivable | 30,817 | 9,922 |
| Accrued revenue | - | 22,804 |
| Prepaid expenses | 55,588 | 52,323 |
| Total current assets | 2,038,682 | 479,384 |
| Non-current assets: |  |  |
| Property and equipment, net | 4,158 | 5,486 |
| Investments in productions, net | 586,255 | 896,419 |
| Total non-current assets | 590,413 | 901,905 |
| TOTAL ASSETS | $2,629,095 | $1,381,289 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| Current liabilities: |  |  |
| Accounts payable | $414,655 | $139,434 |
| Deferred revenue | 246,612 | 25,144 |
| Note payable | 108,573 | 139,868 |
| Accrued expenses | 61,116 | 145,505 |
| Total current liabilities | 830,956 | 449,951 |
| Long-term liabilities: |  |  |
| Loan payable | 48,200 | - |
| Total long-term liabilities | 48,200 | - |
| Total liabilities | 879,156 | 449,951 |
| Stockholders' equity: |  |  |
| Class A common stock, $0.0001 par, 170,000,000 authorized, 15,417,830 and 12,389,170 issued and outstanding at December 31, 2021 and 2020, respectively | 1,541 | 1,238 |
| Class B common stock, $0.0001 par, 30,000,000 authorized, 16,492,620 issued and outstanding, 16,465,900 vested at December 31, 2021 and 16,372,430 issued and outstanding, 16,345,710 vested at December 31, 2020 | 1,649 | 1,637 |
| Additional paid-in capital | 16,163,453 | 12,405,603 |
| Accumulated deficit | (14,416,704) | (11,477,140) |
| Total stockholders' equity | 1,749,939 | 931,338 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $2,629,095 | $1,381,289 |

See Independent Auditor's Report and accompanying notes, which are an integral part of these financial statements.

-3-

# **Legion M Entertainment, Inc.**  
 **Statements of Operations**  
 **For the years ended December 31, 2021 and 2020**---

|  | For the year ended December 31, 2021 | For the year ended December 31, 2020 |
| --- | --- | --- |
| Revenue | $1,062,732 | $933,570 |
| Costs of net revenues | 726,773 | 849,564 |
| Gross profit | 335,959 | 84,006 |
| Operating expenses: |  |  |
| Compensation and benefits | 1,128,550 | 1,274,320 |
| Sales and marketing | 1,738,695 | 574,857 |
| Independent contractors | 13,310 | 93,188 |
| Professional fees | 189,717 | 168,193 |
| Travel expenses | 44,529 | 22,580 |
| General and administrative | 169,205 | 176,939 |
| Depreciation | 4,484 | 9,327 |
| Asset impairment | 140,556 | - |
| Total operating expenses | 3,429,046 | 2,319,404 |
| Loss from operations | (3,093,087) | (2,235,398) |
| Other income: |  |  |
| Gain on loan forgiveness | 139,868 | - |
| Grant | 15,013 | 10,000 |
| Total other income | 154,881 | 10,000 |
| Other expense: |  |  |
| Interest expense | 1,358 | - |
| Total other expense | 1,358 | - |
| Other income/(expense), net | 153,523 | - |
| Net loss | $(2,939,564) | $(2,225,398) |
| Weighted average common shares: |  |  |
| Basic and Diluted | 29,890,570 | 28,381,740 |
| Net earnings/(loss) per share: |  |  |
| Basic and Diluted | $(0.10) | $(0.08) |

See Independent Auditor’s Report and accompanying notes, which are an integral part of these financial statements.

-4-

# **Legion M Entertainment, Inc.**  
 **Statements of Changes in Stockholders' Equity**  
 **For the years ended December 31, 2021 and 2020**

|  | Class A Common Stock |  | Class B Common Stock |  | Additional Paid-in-Capital | Accumulated Deficit | Total Stockholders' Equity |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | Number of Shares | Amount | Number of Shares | Amount |  |  |  |
| Balance at December 31, 2019 | 11,401,270 | $1,140 | 16,372,430 | $1,637 | $11,099,437 | $(9,251,742) | $1,850,472 |
| Common stock issuances: |  |  |  |  |  |  |  |
| Class A ($0.0001 par, $0.83 issue) | 240 | - | - | - | 200 | - | 200 |
| Class A ($0.0001 par, $1.00 issue) | 73,680 | 7 | - | - | 73,673 | - | 73,680 |
| Class A ($0.0001 par, $1.07 issue) | 523,980 | 52 | - | - | 557,987 | - | 558,039 |
| Class A ($0.0001 par, $1.43 issue) | 390,000 | 39 | - | - | 556,881 | - | 556,920 |
| Stock based compensation | - | - | - | - | 303,731 | - | 303,731 |
| Offering costs | - | - | - | - | (74,922) | - | (74,922) |
| Share bonuses | - | - | - | - | (111,384) | - | (111,384) |
| Net loss | - | - | - | - | - | (2,225,398) | (2,225,398) |
| Balance at December 31, 2020 | 12,389,170 | $1,238 | 16,372,430 | $1,637 | $12,405,603 | $(11,477,140) | $931,338 |
| Common stock issuances: |  |  |  |  |  |  |  |
| Class A ($0.0001 par, $1.43 issue) | 866,350 | 87 | - | - | 1,237,061 | - | 1,237,148 |
| Class A ($0.0001 par, $1.50 issue) | 1,804,560 | 180 | - | - | 2,706,660 | - | 2,706,840 |
| Conversion of Class A to Class B | (120,190) | (12) | 120,190 | 12 | - | - | - |
| Bonus Shares | 477,940 | 48 | - | - | 699,323 | - | 699,371 |
| Stock based compensation | - | - | - | - | 222,024 | - | 222,024 |
| Offering costs | - | - | - | - | (258,299) | - | (258,299) |
| Share bonuses | - | - | - | - | (848,919) | - | (848,919) |
| Net loss | - | - | - | - | - | (2,939,564) | (2,939,564) |
| Balance at December 31, 2021 | 15,417,830 | $1,541 | 16,492,620 | $1,649 | $16,163,453 | $(14,416,704) | $1,749,939 |

See Independent Auditor’s Report and accompanying notes, which are an integral part of these financial statements.

-5-

# **Legion M Entertainment, Inc.**  
 **Statements of Cash Flows**  
 **For the years ended December 31, 2021 and 2020**

|  | For the year ended December 31, 2021 | For the year ended December 31, 2020 |
| --- | --- | --- |
| Cash flows from operating activities |  |  |
| Net loss | $(2,939,564) | $(2,225,398) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Inventory impairment | 32,222 | 8,429 |
| Investments impairment | 140,556 | - |
| Production costs charged to cost of net revenues | 199,519 | 217,803 |
| Bad debt | - | 5,000 |
| Depreciation | 4,484 | 9,327 |
| Stock compensation expense | 222,024 | 303,731 |
| Gain on loan forgiveness | (139,868) | - |
| Changes in operating assets and liabilities: |  |  |
| (Increase)/decrease in other receivables | 67 | 4,137 |
| (Increase)/decrease in inventory | (45,055) | (80,961) |
| (Increase)/decrease in accounts receivable | (20,895) | 6,661 |
| (Increase)/decrease in accrued revenue | 22,804 | (22,804) |
| (Increase)/decrease in prepaid expenses | (3,265) | (39,967) |
| Increase/(decrease) in accounts payable | 275,221 | (9,295) |
| Increase/(decrease) in deferred revenue | 221,468 | (123,246) |
| Increase/(decrease) in accrued expenses | (84,389) | 114,229 |
| Net cash used in operating activities | (2,114,671) | (1,832,354) |
| Cash flows from investing activities |  |  |
| Purchase of property and equipment | (3,156) | (3,754) |
| Loans to production | - | (140,802) |
| Repayment of loans to production | - | 240,802 |
| Investments in productions | (29,911) | (58,609) |
| Net cash provided by (used in) investing activities | (33,067) | 37,637 |
| Cash flows from financing activities |  |  |
| Proceeds from issuance of Class A common stock | 3,318,054 | 1,153,080 |
| Proceeds from notes payable | 156,773 | 139,868 |
| Offering costs | (258,299) | (74,922) |
| Net cash provided by financing activities | 3,216,528 | 1,218,026 |
| Net change in cash | 1,068,790 | (576,691) |
| Cash at beginning of period | 158,871 | 735,562 |
| Cash at end of period | $1,227,661 | $158,871 |
| Supplemental disclosure of cash flow information |  |  |
| Cash paid for interest | $ - | $ - |
| Cash paid for income taxes | $ - | $ - |

See Independent Auditor’s Report and accompanying notes, which are an integral part of these financial statements.

-6-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

# **NOTE 1: NATURE OF OPERATIONS**

Legion M Entertainment, Inc. (the “Company” or “Legion M”), is a corporation organized March 4, 2016 under the laws of Delaware. The Company was formed as a fan-owned entertainment company. The Company partners with creators and other entertainment companies -- from independent filmmakers to large Hollywood studios and distributors -- to develop, produce, distribute, market and monetize entertainment content including movies, television shows, virtual reality, digital content, events, and more.

Revenue totaled $1,062,732 and $933,570 for the years ended December 31, 2021 and 2020, respectively. The Company’s activities since inception have consisted of formation activities; research and development; raising capital; business development; developing, financing, producing, marketing, and releasing entertainment projects; establishing and growing the Legion M community and culture; building infrastructure to support the community; and marketing for principal operations. The Company remains dependent upon additional capital resources and is subject to significant risks and uncertainties; including failing to secure additional funding.

# **NOTE 2: GOING CONCERN**

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a business that is in early growth phase and therefore has just started generating revenues from principal operations. Consistent with this early phase, the Company has no profit since inception, incurred negative operating cash flows, and has sustained net losses of $2,939,564 and $2,225,398 for the years ended December 31, 2021 and 2020, respectively. The Company has accumulated deficit of $14,416,704 as of December 31, 2021. The Company expects near-term revenue from various projects and investment proceeds. However, the Company’s ability to continue as a going concern for the next twelve months is dependent upon its plan to raise more capital from investors. The company has successfully raised more than $15,000,000 over eight rounds of funding, and expects to open a ninth round later this year. No assurance can be given that the Company will be successful in these future fundraising efforts. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time without raising additional funding. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

# **NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

# Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).

The Company adopted the calendar year as its basis of reporting.

# Stock Split

From December 27, 2021 through January 7, 2022 Legion M held a special stockholders’ meeting during which a 10-for-1 stock split was passed by the outstanding Class A Common Stock and Class B Common Stock.

On July 15, 2022, the Company effected a 10-for-1 forward stock split of its authorized, designated, issued and outstanding shares of common stock. Accordingly, all share and per share amounts of the Company for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. The amended and restated articles of incorporation increased the authorized stock from 100,000,000 shares (post stock split) of common stock with a par value of $0.0001 to 200,000,000 shares (post stock split) of common stock with a par value of $0.0001 with 170,000,000 shares of the authorized common stock designated as Class A Common Stock and 30,000,000 shares of the common stock designated as Class B Common Stock.

# Use of Estimates

See Independent Auditor's Report

-7-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

#### Cash Equivalents

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less. As of December 31, 2021 the cash balance exceeded the FDIC insured limits by $958,604.

#### Receivable and Allowance for Doubtful Accounts

Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability based on past credit history with clients and other factors. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions. As of December 31, 2021 and 2020, allowances of $0 and $5,000 for doubtful accounts were established, respectively.

#### Subscription Receivable

The Company records stock issuances at the effective date. If the contribution is not funded upon issuance, the Company records a subscription receivable as an asset on a balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under FASB ASC 505-10-45-2, the contributed capital is reclassified as a contra account to stockholders’ equity on the balance sheet.

#### Other Receivables

Other receivables are primarily due from payment processors and gateways (e.g. Paypal, Stripe).

#### Inventory

Inventories are comprised of merchandise (t-shirts, lapel pins, hats, etc.) that are used for marketing and/or for sale in the Legion M store (https://shop.legionm.com). Inventories are stated at the lower of cost or market value. Cost is determined using the average costing method. Inventory balances as of December 31, 2021 and 2020 were $146,501 and $133,668, respectively. The Company periodically reviews inventory quantities and values and adjusts for obsolete or impaired inventory based primarily on management’s estimated forecast of product demand. As a result of that review, the fair value of the inventory has been reduced and $32,222 and $8,429 was recorded as costs of net revenues on the statement of operations as an asset impairment during the years ended December 31, 2021 and 2020, respectively.

#### Production Investments

The Company has cost investments in productions. The fair value of these investments is dependent on the performance of the investee productions as well as volatility inherent in the external markets for these investments. In assessing the potential impairment of these investments, the Company considers these factors as well as the forecasted financial performance of the investees and market values, where available. If these forecasts are not met or market values indicate an other-than-temporary decline in value, impairment charges may be required.

#### Filmed Entertainment and Production Costs

In accordance with ASC 926, “Entertainment-Films” (“ASC 926”), Filmed Entertainment costs include capitalized production costs, development costs, overhead and capitalized interest costs, net of any amounts received from outside investors. These costs, as well as participations, are recognized as operating expenses for each individual production based on the ratio that the current period’s gross revenues for such production bear to management’s estimate of its estimate.

See Independent Auditor's Report

-8-

# **Legion M Entertainment, Inc.**  
 **NOTES TO FINANCIAL STATEMENTS**  
 **As of December 31, 2021 and 2020 and for the years then ended**---

total remaining ultimate gross revenues. Marketing, distribution and general and administrative costs are expensed as incurred. The Company has set a minimum threshold of $10,000 before capitalizing the costs. Management bases its estimates of ultimate revenue for each production on a variety of factors, including: historical performance of similar productions, market research and the existence of future firm commitments. Management regularly reviews, and revises when necessary, its total revenue estimates on a title-by-title basis, which may result in a change in the rate of amortization and/or a write-down of the asset to fair value amount. Costs for productions not produced are written-off at the time the decision is made not to develop the story or after ten years.

Production costs are stated at the lower of unamortized cost or estimated fair value on a production basis. Revenue forecasts for productions are continually reviewed by management and revised when warranted by changing conditions. Results of operations in future years are dependent upon the amortization of production costs and may be significantly affected by periodic adjustments in amortization rates. As a result, the Company's financial results fluctuate from period to period.

If estimates of ultimate revenues change with respect to a production, causing reductions in fair values, the Company may be required to write down all or a portion of the related unamortized costs of the production to its estimated fair value. No assurance can be given that unfavorable changes to revenue and cost estimates will not occur, which may result in significant write-downs affecting our results of operations and financial condition.

Consistent with this guidance, at the end of 2021, the Company reduced the expectations on certain projects. The fair value of the investments was reduced and $140,556 was recorded as an impairment loss on the statement of operations as an asset impairment during the year ended December 31, 2021. No reductions or impairments were recorded for the year ended December 31, 2020.

# Property and Equipment

The Company has a policy to capitalize expenditures with useful lives in excess of one year and costs exceeding $1,000. Property and equipment is stated at cost. The cost of additions and substantial improvements to property and equipment is capitalized. The cost of maintenance and repairs of property and equipment is charged to operating expenses. Property and equipment is depreciated using straight-line methods over their estimated economic lives, ranging from three to five years. Property and equipment is reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No assets were impaired as of December 31, 2021 and 2020. Property and equipment additions totaled $3,156 and $3,754 for the years ended December 31, 2021 and 2020, respectively. Depreciation expense totaled $4,484 and $9,327 for the years ended December 31, 2021 and 2020, respectively.

|  | As of December 31, 2021 | As of December 31, 2020 |
| --- | --- | --- |
| Original Cost | $52,845 | $49,689 |
| Accumulated Depreciation | (48,687) | (44,203) |
| Property and equipment, net | $4,158 | $5,486 |

# Loan Receivable

During 2019 and 2020, the Company made various loans to a production in which the Company is an equity investor (which is recorded as Investments in production, net). The loans were used to cover working capital requirements. These loans were each repaid in fewer than three weeks. A loan outstanding as of December 31, 2019 with a balance of $100,000 was repaid to the Company on January 2, 2020. On January 17, 2020, the Company made another loan of $140,802. This loan was repaid in February 3, 2020. These loans did not earn any interest and no interest income was recorded. As of December 31, 2021 and 2020, there were no outstanding loan receivables.

See Independent Auditor's Report

-9-

# **Legion M Entertainment, Inc.**  
 **NOTES TO FINANCIAL STATEMENTS**  
 **As of December 31, 2021 and 2020 and for the years then ended**---

# Emergency Relief

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020 to provide fiscal relief to U.S. individuals and businesses as a result of the economic hardship caused by the COVID-19 pandemic. One of the main components of the CARES Act is the Paycheck Protection Program (“PPP”), a loan program designed to provide a direct incentive for small businesses to keep their employees on payroll. The Small Business Administration (“SBA”), which administers the PPP, will forgive loans to PPP recipients if all employees are kept on payroll at their current compensation levels after the loan is made and the money is used for payroll, rent, mortgage interest, or utilities. Guidance for the treatment and forgiveness of CARES act funds is still being finalized.

In May 2020, the Company was approved for a PPP loan of $139,868. As of December 31, 2020 the Company had not yet applied for forgiveness of this loan. The Company applied for and was granted complete forgiveness for the $139,868 PPP Round 1 loan. The SBA completely forgave this loan in March 2021 and the amount is recorded on the statement of operations as other income

The Company also applied for an Economic Injury Disaster Loan (“EIDL”) administered by the SBA. In May 2020, the Company was granted an Emergency EIDL grant of $10,000. Additionally, the Company applied for and was granted relief from California and North Carolina state programs totaling $15,013. These amounts have been recorded as other income on the statement of operations for the years ended December 31, 2020 and 2021, respectively.

An EIDL Loan of $48,200 was granted to the Company on January 20, 2021. The terms provide for 3.75% interest and require monthly payments of $236 per month commencing in July 2022 for 30 years. During the year ended December 31, 2021 the Company recognized $1,358 of accrued interest expense related to this loan. The outstanding principal balance of the EIDL Loan was $48,200 as of December 31, 2021.

| Year | Principal Payments |
| --- | --- |
| 2021 | $ - |
| 2022 | - |
| 2023 | - |
| 2024 | - |
| 2025 | 780 |
| 2026 | 1,068 |
| Thereafter | 46,351 |
|  | $48,200 |

The Company also applied for and was approved for PPP Round 2 loan of $108,573 on March 15, 2021. As of December 31, 2021 the Company had not yet applied for forgiveness of this loan. Based on the current guidance and expected use of funds, the Company expects to receive complete forgiveness of the loan.

# Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments based upon certain market assumptions and pertinent information available to management. Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

See Independent Auditor's Report

-10-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the balance sheets approximate fair value.

#### Concentrations of Credit Risks

The Company's financial instruments that are exposed to concentrations of credit risk consist of its cash. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company's management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

#### Revenue Recognition

ASC Topic 606, 'Revenue from Contracts with Customers' establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.

Revenue totaled $1,062,732 and $933,570 for the years ended December 31, 2021 and 2020, respectively. Each year includes revenue from Legion M projects (including fees for services, consumer products sales and licensing related to those projects), ticket-sales and sponsorships related to Legion M events, and sales of Legion M branded merchandise. Revenue attributable to Legion M projects will be recognized over multiple months or years.

#### Stock-Based Compensation

The Company measures employee stock-based awards at grant-date fair value and recognizes employee and consultant compensation expense on a straight-line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company's common stock, and for stock options, the expected life of the option, and expected stock price volatility. The Company used the Black-Scholes option pricing model to value its stock option awards and warrants. The assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The expected life of stock options was estimated using the 'simplified method,' which is the midpoint between the vesting start date and the end of the contractual term, as the Company has limited historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock options grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of options grants. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. The estimation of the number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company's current estimates, such amounts are recognized as an adjustment in the period in which estimates are revised.

See Independent Auditor's Report

-11-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

### Offering Costs

The Company complies with the requirements of FASB ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized as deferred offering costs on the balance sheet. The deferred offering costs are charged to stockholders' equity upon the completion of an offering or to expense if the offering is not completed.

### Income Taxes

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, *Income Taxes*. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will be realized. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. The Company has determined that there are no material uncertain tax positions.

The Company files income tax returns in the United States and is subject to income tax examinations for its U.S. federal income taxes for the preceding three years and, in general, is subject to state and local income tax examinations for the preceding three years. Tax returns through 2020 have been filed. The Company is not presently subject to any income tax audit in any taxing jurisdiction.

The Company accounts for income taxes with the recognition of estimated income taxes payable or refundable on income tax returns for the current period and for the estimated future tax effect attributable to temporary differences and carryforwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized in the immediate future. As of December 31, 2021 and 2020, the Company had total taxable net operating loss carryforwards of approximately $13,262,222 and $10,138,643, respectively. The Company pays Federal and California income taxes at rates of approximately 21.0% and 8.8%, respectively, and has used an effective blended rate of 28.0% to derive a net deferred tax assets of approximately $4,167,809 and $3,231,589 as of December 31, 2021 and 2020, respectively. The Company cannot presently anticipate the realization of a tax benefit on its net operating loss carryforward. Accordingly, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2021 and 2020. Deferred tax assets and liabilities resulted from net operating losses, depreciation/amortization, organizational costs, deferred revenue and stock-based compensation.

The following table reconciles the statutory income tax rates to actual rates based on income or loss before income taxes As of December 31, 2021 and 2020:

See Independent Auditor's Report

-12-

# **Legion M Entertainment, Inc.**  
 **NOTES TO FINANCIAL STATEMENTS**  
 **As of December 31, 2021 and 2020 and for the years then ended**---

|  | As of December 31, 2021 | As of December 31, 2020 |
| --- | --- | --- |
| Federal income tax rate | 21.0% | 21.0% |
| State income tax rate, net of federal benefit | 7.0% | 7.0% |
| Valuation allowance | (28.0%) | (28.0%) |
| Effective tax rate | 0% | 0% |

|  | As of December 31, 2021 | As of December 31, 2020 |
| --- | --- | --- |
| Deferred tax assets: |  |  |
| Stock based compensation | $456,562 | $394,432 |
| Net operating loss carryforward | 3,711,247 | 2,837,157 |
| Net deferred tax assets | 4,167,809 | 3,231,589 |
| Less: Valuation allowance | (4,167,809) | (3,231,589) |
| Net deferred tax asset | $ - | $ - |

The Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination resulting in an uncertain tax position. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2021 and 2020, the Company recognized no interest or penalties.

# Reclassifications of Prior Year Balances

Certain balances from the December 31, 2020 statement of operations were reclassified to conform to current year presentation. There was no change in the Company’s net loss from these reclassifications.

# Net Earnings or Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net earnings or loss per share if their inclusion would be anti-dilutive.

|  | As of December 31, 2021 | As of December 31, 2020 |
| --- | --- | --- |
| Warrants | 570,000 | 320,000 |
| Options | 4,366,880 | 3,914,260 |
| Total dilutive securities | 4,936,880 | 4,234,260 |

As all potentially dilutive securities are anti-dilutive as of December 31, 2021 and 2020, diluted net loss per share is the same as basic net loss per share for each year.

# **NOTE 4: STOCKHOLDERS' EQUITY**

The Company’s articles of incorporation, as amended and restated, authorize 200,000,000 shares common stock (post stock split) with a par value of $0.0001, and authorize the creation of two classes of common stock, “Class A Common Stock” and “Class B Common Stock,” with 170,000,000 shares of the authorized common stock designated as Class

See Independent Auditor's Report

-13-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

A Common Stock and 30,000,000 shares of the common stock designated as Class B Common Stock. The Class B Common Stock contains a voting rights preference of 10 votes per share and is convertible into Class A Common Stock at the option of the holder.

In 2016, the Company converted $501,281 of convertible notes and related interest outstanding to 976,480 shares of Class B Common Stock. All of the shares vested immediately upon conversion.

During the period from March 4, 2016 (inception) to December 31, 2016, 15,460,400 shares of Class B Common Stock were issued at prices ranging from $0.00001 to $0.0001 per share, yielding proceeds of $1,501. This amount was recorded as an expense for services rendered by the stockholders.

These shares of Class B Common Stock are subject to vesting over periods from immediate to 48 months with vesting contingent upon continued service with the Company. The Company considered its negative book value and limited operating activity as of these share issuances and determined the issuance prices approximated the fair value of the shares issued. As of December 31, 2021 and 2020, 16,465,900 and 16,345,710 of these outstanding Class B Common Stock have vested, respectively. As of December 31, 2021 and December 31, 2020, the 26,720 unvested shares will either vest or expire by April 2026.

In September 2016, the Company completed an equity offering through Regulation Crowdfunding and raised gross proceeds of $999,999 for the issuance of 1,428,570 shares of Class A Common Stock. The offering price for this offering was $0.70 per share.

During the period from March 4, 2016 (inception) to December 31, 2016, the Company completed equity investments outside of the crowdfunding campaign providing proceeds of $193,522 for the issuance of 276,460 shares of Class A Common Stock. The offering price for this offering was $0.70 per share.

The Company had a Regulation Crowdfunding and a Regulation A funding round open during the year ended December 31, 2017 and during that period investors were able to purchase shares of Class A Common Stock. The share price for these offerings were $0.75 per share. During the year ended December 31, 2017, 2,728,700 shares were sold generating $2,038,339.

The Company had a Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2018 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $0.75 per share through May 14, 2018, $0.83 per share through October 3, 2018 and $0.89 per share for the remainder of the year. During the year ended December 31, 2018, 2,268,980 shares were sold generating $1,923,652.

The Company had Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2019 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $0.89 per share through July 15, 2019, $1.00 per share through November 6, 2019 and $1.07 per share for the remainder of the year. During the year ended December 31, 2019, 4,634,110 shares were sold generating $4,386,442.

The Company had Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2020 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $1.07 per share through April 29, 2020, and $1.43 per share for the remainder of the year. During the year ended December 31, 2020, 987,900 shares were sold generating $1,188,839.

The Company had Regulation Crowdfunding and Regulation A funding rounds open during the year ended December 31, 2021 and during that period investors were able to purchase shares of Class A Common Stock. The share prices for these offerings were $1.43 per share through April 30, 2021, and $1.50 per share for the remainder of the year. During the year ended December 31, 2021, 2,670,910 shares were sold generating $3,943,988.

For the rounds that were active as of December 31, 2021 and 2020, investors had the opportunity to choose a reward (e.g. gift card, bonus shares (defined below), tickets to an event, etc.) based on amount of money they invest.

See Independent Auditor's Report

-14-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

One of those rewards are bonus shares, which was granted to investors for free once their investment closes. The company issued 243,600 bonus shares related to this round. When factoring in bonus shares, the effective share price paid by each investor was approximately $1.20 for 2020 and 2021.

For the round that was active as of December 31, 2021, with a per share price of $1.50 paid by investors for shares of Class A Common Stock, investors have the opportunity to choose a reward (e.g. gift card, bonus shares (defined below), etc.) based on amount of money they invest.

One of those rewards are bonus shares, which are granted to investors for free once their investment closes. The company issued 234,340 bonus shares related to this round. When factoring in bonus shares, the effective share price paid by each investor was approximately $1.33 for 2021.

As of 2020, the total reward value owed for the shares sold in the year was undeterminable as not all reward choices had not been made. The Company made an estimate for the maximum gift card reward owed of $111,384 as being the largest cash amount required and recorded a liability for such to accrued expenses in the balance sheet as of December 31, 2020 and as a reduction to additional paid-in capital for the year ended December 31, 2020. As of December 31, 2021, all applicable awards for shares issued and outstanding had been determined. As many rewards were bonus shares and not gift cards, the total reduction to additional paid-in-capital for the year ended December 31, 2021 was $848,919.

The Company received partial proceeds disbursement of funds committed from these equity offerings during the years ended December 31, 2021 and 2020 of $3,318,054 and $1,153,080, respectively. As part of the normal process of investors purchasing stock, those purchases are held in escrow by Wefunder and StartEngine, the Company's funding portals. At the end of each month, there is a balance of funds held by Wefunder and Start Engine for future distribution to the Company. The escrow balance as of December 31, 2021 and 2020 was $571,112 and $94,726, respectively.

In October 2018, the Company received a prepayment totaling $100,000 for a future investment in the Company from one of the Company's largest investors. As the funds had been received but the investment contracts not finalized, the $100,000 prepayment was included on the balance sheet as a 'Pending investment' liability as of December 31, 2018. That investment was finalized in 2019 and the Company issued shares to this investor at $0.83 per share, consistent with other investors at that time and included in the 2019 issuances discussed above. During 2021, it was determined that this investor should have received Class B shares. Therefore, 120,190 shares were converted from Class A shares to Class B shares.

As of December 31, 2021 and 2020, the Company had 15,417,830 and 12,389,170 shares of Class A Common Stock and 16,492,620 and 16,372,430 shares of Class B Common Stock issued and outstanding, all respectively.

## **NOTE 5: SHARE-BASED PAYMENTS**

### Stock Plan

On April 12, 2016, the Company adopted its 2016 Equity Incentive Plan (the 'Plan'). The Plan authorizes options to purchase up to 2,539,600 shares of Class B Common Stock. On November 3, 2016, the Company amended its 2016 Equity Incentive Plan to authorize an additional 5,000,000 options to purchase Class B Common Stock. As of December 31, 2021 and 2020, there were 3,172,720 and 3,605,340 options available for issuance, respectively.

As of December 31, 2021 and 2020, the Company had issued and outstanding 4,366,880 and 3,914,260 options to purchase Class B Common Stock under the Plan, respectively.

See Independent Auditor's Report

-15-

# **Legion M Entertainment, Inc.**  
 **NOTES TO FINANCIAL STATEMENTS**  
 **As of December 31, 2021 and 2020 and for the years then ended**---

|  | December 31, 2021 |  | December 31, 2020 |  |
| --- | --- | --- | --- | --- |
|  | Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price |
| Outstanding - beginning of year | 3,914,260 | $0.66 | 3,557,420 | $0.62 |
| Granted | 452,620 | $1.14 | 356,840 | $1.10 |
| Exercised | - |  | - |  |
| Forfeited | - |  | - |  |
| Outstanding - end of year | 4,366,880 | $0.71 | 3,914,260 | $0.66 |
| Exercisable at end of year | 3,691,770 | $0.72 | 3,321,010 | $0.69 |
| Intrinsic value of options outstanding at year-end | $3,440,665 |  | $2,994,409 |  |
| Weighted average grant date fair value of options granted during year | $0.63 |  | $0.55 |  |
| Weighted average duration (years) to expiration of outstanding options at year-end | 6.1 |  | 6.7 |  |

These options vest over different schedules with some vesting immediately and others vesting over periods from 1 to 10 years. The maximum term for stock options granted under the Plan may not exceed ten years from the date of grant. The options expire 10 years after the date of grant. The remaining outstanding options will vest over a weighted average period of 37 months.

The assumptions utilized for valuing stock-based grants for compensation and marketing expense during the years ended December 31, 2021 and 2020 are as follows:

|  | 2021 | 2020 |
| --- | --- | --- |
| Risk Free Interest Rate | 0.64%-1.07% | 0.29%-0.39% |
| Expected Dividend Yield | 0.00% | 0.00% |
| Expected Volatility | 60.00% | 60.00% |
| Expected Life (years) | 5.6 - 7.0 | 5.0 |
| Fair Value per Stock Option | $0.61-$0.67 | $0.53-$0.57 |

The Company recognizes stock-based compensation on a straight-line basis over the options’ vesting periods. Based on the issue dates, the per share value and the vesting period, the Company determined total stock-based compensation and additional paid-in capital to be to be $207,629 and $303,731 for the years ended December 31, 2021 and 2020, respectively.

Unrecognized share-based compensation expense was $419,523 and $352,741 as of December 31, 2021 and 2020, respectively. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately 38 and 42 months as of December 31, 2021 and 2020, respectively.

See Independent Auditor's Report

-16-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

# Warrants

In April 2016, the Company issued 270,000 warrants to purchase Class B shares of common stock. The shares available under this warrant vest pro-rata over two years on a monthly basis (1/24 vest per month). The stock purchase warrants expire at the earliest of: ten years after their date of issuance (2026), any change in control, or an initial public offering. The exercise price for the common stock warrants is $0.001 per share. The number of shares or exercise price will be adjusted in the event of any stock dividend, stock splits or recapitalization of the Company. As of December 31, 2021 and 2020, 270,000 and 270,000 of these warrants had vested, respectively. The Company determined the grant date fair value of these warrants under a Black-Scholes calculation to be $188,759, and recognized $0 of such to additional paid-in capital and as marketing expense during the years ended December 31, 2021 and 2020. All associated expense was recorded in prior periods, commensurate with the vesting of the warrants. The assumptions and inputs for the Black-Scholes calculation for the warrants are the same terms as used for valuing the options issued on April 12, 2016.

In June 2017, the Company issued 50,000 warrants to purchase Class B shares of common stock. The shares available under this warrant vested immediately on issuance. The stock purchase warrants expire at the earliest of: ten years after their date of issuance (2027), any change in control, or an initial public offering. The exercise price for the common stock warrants is $0.75 per share. The number of shares or exercise price will be adjusted in the event of any stock dividend, stock splits or recapitalization of the Company. The Company determined the fair value of these warrants under a Black-Scholes calculation to be $19,400 and recorded that value as an adjustment to additional paid-in capital and as an investment in a project in 2017. The assumptions and inputs for the Black-Scholes calculation for the warrants are the same terms as used for valuing the options issued on June 9, 2017.

In October 2021, the Company issued 250,000 warrants to purchase Class B shares of common stock. The shares available under this warrant vest pro-rata over two years on a monthly basis (1/24 vest per month). The stock purchase warrants expire at the earliest of: ten years after their date of issuance (2031), any change in control, or an initial public offering. The exercise price for the common stock warrants is $1.25 per share. The number of shares or exercise price will be adjusted in the event of any stock dividend, stock splits or recapitalization of the Company. As of December 31, 2021, 20,830 of these warrants had vested. The Company determined the grant date fair value of these warrants under a Black-Scholes calculation to be $172,750, and recognized $14,395 of such to additional paid-in capital and as stock-based compensation during the year ended December 31, 2021.

The assumptions utilized for valuing these warrants in the year ended December 31, 2021 are as follows:

|  | 2021 |
| --- | --- |
| Risk Free Interest Rate | 1.11% |
| Expected Dividend Yield | 0.00% |
| Expected Volatility | 60.00% |
| Expected Life (years) | 6.0 |
| Fair Value per Warrant | $0.69 |

As of December 31, 2021 and 2020, there was $158,354 and $0 of unrecognized share-based compensation expense, respectively.

As of December 31, 2021 and 2020, there were 570,000 and 320,000 warrants outstanding with weighted average exercise price per share of $0.61 and $0.12, and 340,830 and 320,000 warrants vested with weighted average exercise price per share of $0.19 and $0.12, all respectively.

See Independent Auditor's Report

-17-

# **Legion M Entertainment, Inc.**  
**NOTES TO FINANCIAL STATEMENTS**  
**As of December 31, 2021 and 2020 and for the years then ended**---

# **NOTE 6: RECENT ACCOUNTING PRONOUNCEMENTS**

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of ASU 2016-02 has had no material impact on the Company’s financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

# **NOTE 7: SUBSEQUENT EVENTS**

# PPP

The Company applied for and was granted complete forgiveness for the $108,573 PPP Round 2 loan on February 14, 2022.

# EIDL

The Company requested and was granted an increase to the existing EIDL Loan. On April 4, 2022, the Company received an additional $101,700. The terms are consistent with the existing loan.

# Stock Split

From December 27, 2021 through January 7, 2022 Legion M held a special stockholders’ meeting during which a 10-for-1 stock split was passed by the outstanding Class A Common Stock and Class B Common Stock.

On July 15, 2022, the Company effected a 10-for-1 forward stock split of its authorized, designated, issued and outstanding shares of common stock. Accordingly, all share and per share amounts of the Company for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. The amended and restated articles of incorporation increased the authorized stock from 100,000,000 shares (post stock split) of common stock with a par value of $0.0001 to 200,000,000 shares (post stock split) of common stock with a par value of $0.0001 with 170,000,000 shares of the authorized common stock designated as Class A Common Stock and 30,000,000 shares of the common stock designated as Class B Common Stock.

# Next Step Financing Offering

Legion M is expecting to have one or more additional rounds of equity crowdfunding under the JOBS Act in 2022. The Company expects that many successive rounds of funding will be needed to achieve the Company’s long-term goals.

# Management's Evaluation

Management has evaluated subsequent events through April 23, 2022, the date the financial statements were available to be issued. Based on the evaluation, no additional material events were identified which require adjustment or disclosure.

See Independent Auditor's Report

-18-

**Attachment 3:** `LegionMSubAgmt.pdf`

# FINANCING AGREEMENT

THIS INSTRUMENT AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE ACT. FOR ONE YEAR FROM THE DATE OF THIS INSTRUMENT, SECURITIES SOLD IN RELIANCE ON REGULATION CROWDFUNDING UNDER THE ACT MAY ONLY BE TRANSFERRED TO THE COMPANY, TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE ACT, AS PART OF AN OFFERING REGISTERED UNDER THE SECURITIES ACT WITH THE SEC, OR TO A MEMBER OF INVESTOR'S FAMILY OR THE EQUIVALENT, TO A TRUST CONTROLLED BY THE INVESTOR, TO A TRUST CREATED FOR THE BENEFIT OF A MEMBER OF THE FAMILY OF THE INVESTOR OR EQUIVALENT, OR IN CONNECTION WITH THE DEATH OR DIVORCE OF THE INVESTOR OR OTHER SIMILAR CIRCUMSTANCE. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO INVESTOR IN CONNECTION WITH THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

This Financing Agreement, comprising the Basic Terms and the attached Standard Terms (collectively, the "Agreement") is entered into as of ________________ ("Effective Date"), by and between ________________ ("Investor") and Legion M Entertainment, Inc. ("Legion M" or the "Company") through the Company's offering ("The Offering"), with respect to the financing, production and distribution of that certain motion picture currently entitled "You Can Call Me Bill" ("The Picture"), on the following terms and conditions:

# BASIC TERMS

1. DEFINITIONS. All defined terms used in this Agreement shall include all forms, variations and conjugations thereof. Defined terms used in these Basic Terms and not otherwise defined shall have the meaning ascribed to them in the Standard Terms.

2. WEFUNDER. Investor's investment in The Picture is being made pursuant to The Offering. In connection therewith, WeFunder Portal, LLC and/or its related entities (all of which, "Wefunder")(https://wefunder.com/) is the "intermediary" for purposes of the Regulation as it relates to Investor's investment in The Picture. Participation in this offering is subject to Wefunder's terms and conditions set forth at https://wefunder.com/terms.

3. INVESTOR'S OBLIGATION TO FINANCE. Investor shall invest the sum of ________________ (the "Principal Amount") in The Picture pursuant to the terms of this Agreement. For each $10 invested the investor shall be entitled to one "Shatner Share" (defined below). Company shall use the Principal Amount solely in connection with the development, production, marketing, Sale and delivery of The Picture as set forth herein and shall not commingle the Investment with any other funds of the Company that do not relate to The Picture. The Company shall deposit the Principal Amount in an interest bearing or non-interest bearing bank account (as determined by Company) established and administered by Company solely for the development, production, Sale and delivery of The Picture. Concurrently with Investor's execution of this Agreement, Investor shall execute and return to Company or Wefunder all documentation required by Company and Wefunder including, without limitation, an IRS form W-9 or W-8BEN, as applicable.

- 1 -

4. **FINANCIAL TERMS.** Investor shall be entitled to receive, pursuant to, and in accordance with, the terms of this Agreement a portion of Net Picture Revenue (defined below). Legion M will distribute Net Picture Revenue as follows:

a. Investors will receive their pro rata share (according to their Percentage Ownership) of one hundred percent (100%) of Net Picture Revenue until the Principal Amount of their investment has been received.

b. Thereafter, investors will receive their pro rata share (according to their Percentage Ownership) of thirty-three percent (33%) of the Net Picture Revenue, and the Producers (defined below) will receive the remaining sixty-sevent percent (67%).

c. Net Picture Revenue will be distributed on a semi-annual (or better) basis commencing approximately one year after commercial release of The Picture, provided there is at least $10,000 in Net Picture Revenue for distribution.

d. If there is less than $10,000 in Net Picture Revenue in any given distribution period, that amount will be held in reserve for distribution during the period in which at least $10,000 in Net Picture Revenue has accumulated.

e. If The Offering is not fully subscribed, investors will receive their pro rata interest as if the round was fully subscribed and Legion M will find one or more other investor(s), potentially including Legion M, to provide funding for the rest of the expenses required for The Picture.

f. If Legion M utilizes funds from one or more other investor(s) ("Other Investors"), including Legion M, to raise money for The Picture, such Other Investors will invest on the exact same financial terms as the Investors in The Offering, and shares of Net Revenue will be distributed pari-passu between Other Investors and Investors in The Offering.

The maximum amount of Shatner Shares available will be 75,000 or $750,000.

5. **ACCREDITED INVESTOR.** Investor represents and warrants that Investor:

a. Is an "accredited investor" (an "**Accredited Investor**") within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "**Securities Act**").

OR

b. Is not an Accredited Investor and is familiar with, and has, and shall, comply with all requirements of an investor who is not an Accredited Investor pursuant to 17 CFR 227.100(a)(2) (https://www.ecfr.gov/current/title-17/chapter-II/part-227#227.100)

6. **CONSTRUCTION.** In the event of any inconsistency between these Basic Terms and the attached Standard Terms, the attached Standard Terms shall govern.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first written above.

Legion M Entertainment, Inc.

INVESTOR

- 2 -

Signature

Signature

Paul Scanlan, CEO

Print Name

- 3 -

# STANDARD TERMS

1. **DEFINITIONS.** All defined terms used in this Agreement shall include all forms, variations and conjugations thereof. In addition to the other terms defined elsewhere herein, the following terms shall have the following meanings:

a. **“Budget”** shall have the meaning ascribed to it in paragraph 4 below.

b. **“Budgeted Cost”** shall mean Company’s good faith estimated cost of producing The Picture, delivering The Picture to the distributor(s) thereof, and the costs related to The Offering as reflected in the Budget.

c. **“Legion M Ticket Bundle”** shall mean any bundle that includes a ticket for a screening of the film (e.g., a bundle that includes a t-shirt and a ticket to The Picture, or a ticket to a screening of The Picture that also includes a meet-and-greet with William Shatner) that are sold directly to consumers from Legion M.

d. **“Final Cost”** shall mean one hundred percent (100%) of the total sums expended or incurred by the Company with respect to the Budget.

e. **“Financing”** shall mean one hundred percent (100%) of the sums received by Company from Investors to purchase Shatner Shares in The Offering.

f. **“Gross Picture Revenue”** shall have the meaning ascribed to it in Section 8 below.

g. **“Legion M Retail Sales”** shall mean any revenue generated by items derived from The Picture (e.g., DVDs, shirts, posters, etc.) that are sold directly to consumers from Legion M.

h. **“Legion M Ticket Bundle”** shall mean any bundle that includes a ticket for a screening of the film (e.g., a bundle that includes a t-shirt and a ticket to The Picture, or a ticket to a screening of The Picture that also includes a meet-and-greet with William Shatner) that are sold directly to consumers from Legion M.

i. **“Net Picture Revenue”** shall have the meaning ascribed to it in Section 9 below.

j. **“Other Investors”** shall mean any other person or entity, including Legion M, that provides financing for The Picture through a concurrent exempt offering of the Shatner Shares.

k. **“Principal Amount”** shall have the meaning ascribed to it in section 3 of the Basic Terms when used in connection with Investor.

l. **“Percentage Ownership”** shall mean, with respect to Investor or Other Investors, a fraction, expressed as a percentage, equal to the total number of the number of Shatner Shares by 75,000 (the maximum amount of Shatner Shares).

m. **“Producers”** shall mean the Company, William Shatner (“Mr. Shatner”) and Exhibit A.

n. **“Sale”** shall mean sale, license or other disposition of The Picture by Company.

- 4 -

o. **“Shatner Share”** means a unit representing an investment in the Picture of $10. For the avoidance of doubt, a Shatner Share does not represent a share of stock in Legion M, but a share of the revenue generated by The Picture as dictated by this agreement.

2. **THE PICTURE.** The Picture will be based on an outline and plan (the **“Screenplay”**) from Alexandre O. Philippe and, subject to the agreements between Company and the following individuals, will be directed by Alexandre O. Philippe and will be produced by Legion M Entertainment, Inc., Exhibit A, and William Shatner. The parties have completed principal photography of The Picture and intend to have a finished film ready in early 2023. For the avoidance of doubt, Investor does not have any claim on rights to the Picture itself other than as outlined in this Agreement, nor rights to future sequels, series, or derivative works related to the The Picture.

3. **COMPANY CONTROLS.** Company shall have the right to make all decisions regarding the development, production, completion, delivery and distribution of The Picture, including designating decision making and other authority to Exhibit A or other partners and subcontractors, subject to the rights of Investor as are specifically set forth in this Agreement. The Company shall have the right to designate and engage the cast, all crew members and all other production elements (equipment, laboratory and other facilities and third party services) of the production of The Picture as well as negotiate all terms and conditions of all agreements relating thereto, including determining all on-screen and paid advertising credits to all such parties. In addition, as between the parties, the Company shall have the sole and exclusive right to enter into all agreements with respect to the Sale, distribution and/or exploitation of The Picture.

4. **BUDGET.** The **“Budget”** shall be the final budget for the financing and production of The Picture, included as Exhibit 1, which includes Company’s anticipated cost of producing and delivering The Picture to the distributor(s) along with the costs of raising finance via equity crowdfunding. The Budgeted Cost is intended to be no more than $750,000.00. Company shall use its reasonable, good faith efforts to produce The Picture so that the Final Cost does not exceed the Budgeted Cost. The Budget is subject to change at the sole direction of the officers and directors of the Company based on the business needs of The Picture.

5. **TREATMENT OF INVESTMENT.** The Principal Amount will be repaid to the Investor in accordance with the basic terms of this Financing Agreement. The Investor will not have any other obligation to the Company for any other liabilities incurred by the Company or any capital calls initiated by the Company. Furthermore, the Investor will not be a stockholder of the Company and will not have the rights typically associated with capital stock.

6. **OWNERSHIP OF PICTURE AND LITERARY RIGHTS.** As between the Company and Investor, the Company shall be the sole and exclusive owner of The Picture, all physical and intellectual materials comprising The Picture, the Screenplay and all ancillary and underlying literary and other rights therein, including the copyright in The Picture and the Screenplay. All agreements with all third parties, including without limitation individuals or entities rendering services, providing equipment or providing facilities for the production of The Picture or parties distributing or assisting in the distribution of The Picture, shall be entered into by Company in its name or the name of any production entity designated by Company.

7. **COLLECTION AGENT.** Company may, at its option, appoint a collection agent (the **“Collection Agent”**) and, if so, shall enter into an agreement with the Collection Agent (the **“Collection Agreement”**) to act as the collection agent to collect all revenues derived from all sources of exploitation of The Picture and

- 5 -

all rights therein. Such Collection Agent shall receive all revenues from the distribution and exhibition of The Picture in all sources and media worldwide and pay out and apply such revenues to Company, Investor, the Other Investors and other applicable persons and entities having an interest in such manner as is provided in this Agreement or other agreements entered into by Company (net of all Collection Agent fees and expenses in accordance with the terms and conditions of the Collection Account Management Agreement). In the event that Company enters into the Collection Agreement, Company shall contractually obligate all distributors, sales agents or other third parties acquiring any distribution rights in The Picture to make payments of all revenues, including advances, to the Collection Agent. Such payments may be net of any and all distribution fees, recoupment of distribution expenses, payment of residuals, taxes payable at the point of collection or other costs, fees or expenses incurred by third-party sales agents or third-party distributor(s) of The Picture if permitted pursuant to agreements between such distributors and Company.

8. GROSS PICTURE REVENUE. Gross Picture Revenue is defined as all the money (in perpetuity) received by Legion M from exploitation of the Picture, excluding "off the top fees", as customary in the industry. Gross Picture Revenue includes direct revenues from the exploitation of the Picture itself, as well as any ancillary revenues, such as licensing fees from merchandise sales for products derived from The Picture, subject to the limitations and additions listed in sections 8(a) through 8(d) below:

a. For revenue generated by Legion M Retail Sales, Gross Picture Revenue will include only the portion of revenue equivalent to the portion of Gross Picture Revenue received from comparable sales at third party retail outlets.

1) For products that are produced by a third-party (e.g., DVDs or t-shirts purchased wholesale from a distributor) Gross Picture Revenue will only include the licensing fees paid by the distributor to Legion M, not the retail revenue paid by the end consumer to Legion M.
2) For products that are produced by Legion M, Gross Picture Revenue will include all revenue attributable to the items sold (not including taxes or shipping) after deductions for hard costs, chargebacks, payments to third-party vendors, and a thirty percent (30%) retail margin for Legion M.

b. If any revenue is generated by Legion M through sales of Legion M Ticket Bundles, Gross Picture Revenue shall include only the amount of revenue comparable to the amount of Gross Picture Revenue generated by a standard movie ticket to see The Picture, not the retail revenue paid by the end consumer to Legion M.

c. For the purposes of this Agreement, any unspent proceeds from The Offering (e.g., leftover contingency and/or savings from expenses that were lower than expected) will be treated as Gross Picture Revenue.

d. For the purpose of this Agreement, Gross Picture Revenue also includes any money received from a "buyout" or outright purchase of the copyrights of the Picture by a streaming platform, distributor, or other company.

4

- 6 -

e. For the avoidance of doubt, Gross Picture Revenue does not include revenue not generated directly by The Picture, including:

1) Any revenue generated from music rights to Mr. Shatner's songs used in the film.

2) Any fees charged by Mr. Shatner for autographs, appearances, photos, meet and greets, etc., even when performed at screenings of, or events related to, The Picture.

3) Any revenue earned by Legion M, Mr. Shatner, or Exhibit A from other projects other than The Picture.

9. **NET PICTURE REVENUE.** Net Picture Revenue is defined as Gross Picture Revenue less third party, out-of-pocket costs and expenses incurred by Legion M when collecting, auditing, and administering monies paid and/or owed to Legion M from distributors and/or other licensees of The Picture, including:

a. Payments (if any) made by the Company in connection with collection agent fees and expenses;

b. Payments (if any) made by Company, or a reserve for payments anticipated to be made in the future, to the extent required by the applicable unions or guilds, for sums reasonably anticipated to be due by Company to applicable unions or guilds having jurisdiction over the Picture for residuals,

c. Royalties, licensing fees or similar payments (if any) related to the exhibition or release of the Picture;

d. Third party accounting and auditing fees related to The Picture;

e. Insurance payments (if any) related to The Picture;

f. Payments (if any) made by Company to third parties for services in connection with SEC and other legal compliance requirements resulting from the equity crowdfunding of The Picture;

g. Payments (if any) made by Company to outside attorney(s) in connection with any legal fees, expenses, filing fees, or judgments related to The Picture;

h. Payment of taxes (but not income taxes) related to The Picture;

i. Payments (if any) made for third-party marketing expenses that have been mutually agreed upon by the Producers;

j. Reasonable costs (if any) associated with the delivery of The Picture to distributors and/or sales agents, and festival related expenses;

k. Payments (if any) made for any other third-party administrative expenses of the

- 7 -

Company in connection with The Picture; and

l. An amount necessary to provide an adequate reserve of funds reasonably anticipated to be needed by the Company for the future payment of expenses listed above.

m. For clarification purposes, it is acknowledged and agreed that administrative expenses herein shall not include any overhead or payments to Company personnel (other than reimbursement of any actual, verifiable out-of-pocket expenses incurred by such parties in connection with the foregoing).

10. CREDITS. All Investors in The Offering will be provided with a credit in The Picture correlated to the size of their investment:

a. $56,250+ or more affords a CO-EXECUTIVE PRODUCER credit in the end credits.

b. $18,750 - $56,249 affords a CONTRIBUTING PRODUCER credit.

c. $10,000 - $18,749 Investor’s name will be included in a PLATINUM FINANCIER portion of the FAN FINANCIER section of the end credits.

d. $1,000 - $9,999 Investor’s name will be included in a GOLD FINANCIER portion of the FAN FINANCIER section of the end credits.

e. $100 - $999 Investor’s name will be included in a FINANCIER portion of the FAN FINANCIER section of the end credits.

f. NO BREACH: The presentation of names in the credits is at the sole discretion of the Producers. Names that include profanity, gibberish, excessive length, or jokes will be removed. The Producers have final say on credits and can remove a name at their sole discretion. All decisions with respect to credit, including without limitation the position, size, prominence, style, placement and form of any and all credits shall be determined by the Producers in their sole discretion. No failure by Producers or its or their assignees or licensees to comply with the credit requirements hereof shall be deemed a breach of this Agreement.

11. REPORTING. Company shall, or, if applicable, shall cause the Collection Agent to, prepare and release publicly available accounting statements with respect to the distribution and exploitation of The Picture in accordance with GAAP accounting rules and principles. Such accounting statements shall reflect all sums received and all sums paid out by Company and/or the Collection Agent. Such statements shall be provided on a semi-annual basis following the initial release of The Picture in the United States provided, however, that in the event that no Gross Picture Revenues are earned during any accounting period, Company shall have no obligation to issue a statement to Investor with respect to such accounting period. Each accounting statement shall be rendered on a calendar basis and shall be sent out within 120 days following the close of each applicable period. All statements and other accounts rendered by Company or the Collection Agent will be

- 8 -

binding upon Investor and not subject to any objections by Investor for any reason whatsoever, unless such specific objection is made in writing, stating the basis thereof and delivered to Company or the Collection Agent within two years from the date such statement is received by Investor. Investor, along with the Other Investors and Producers as a group, will have the right upon giving Company or the Collection Agent 30 days prior written notice, by independent certified public accountants experienced in the books and records and methods of accounting utilized in the motion picture industry, who are not employed on a contingency basis, and who execute a non-disclosure agreement in form and substance reasonably acceptable to Company, to examine Company's or the Collection Agent's books and records insofar as they relate to this Agreement, at Company or the Collection Agent's regular place of business, as applicable, and during Company's or the Collection Agent's regular business hours. Such examination will be conducted in a manner that will not interfere with the normal operation of Company's or the Collection Agent's business. Investors, collectively, may make such an examination for a particular statement only once and only within the two year period after the date any such statement is rendered. Investor will not examine Company's or the Collection Agent's books and records more than once during any calendar year. Any suit commenced on such examination must be instituted at any time within two years following expiration of said two year period; otherwise, any claims Investor has with respect to the applicable statement shall be waived and forever released. If the result of Investor's audit indicates an undisputed underpayment, Company or the Collection Agent shall immediately pay to Investor the amount of such underpayment; moreover, should the underpayment be 10% or more (but no less than $10,000), the reasonable, actual, third-party, out-of-pocket costs associated with that specific audit also shall be reimbursed to Investor by Company or the Collection Agent (as appropriate). Company shall have the right to notify Other Investors and give such Other Investors the right to participate in such audit, in which event the participating Investors and Other Investors shall agree among themselves as to the sharing of the cost of any such audit. In no event will Company or the Collection Agent be required to submit to more than one audit per year. For the purpose of clarity and because a Collection Account Manager is not a party to this Agreement, Company will use commercially reasonable efforts to bind such agent (if applicable) to these terms, but failure to secure these exact terms from a collection account manager shall not be a breach of this Agreement so long as there are audit rights no less than one time per year.

12. **COMPANY'S REPRESENTATIONS AND WARRANTIES.** Company represents and warrants that:

a. It has the full right, power and authority to enter into this Agreement and do all acts required of it hereunder.

b. It is a valid corporation in good standing under its state of incorporation.

c. It has not entered into any agreement with any third-party in conflict with the promises made to Investor hereunder.

d. To the best of Company's current knowledge, The Picture and each and every element thereof (i) shall not violate or infringe upon the trademark, trade name, copyright, patent, or other

- 9 -

intellectual property right, and (ii) shall not violate or infringe upon any personal, civil or proprietary right, right of privacy or publicity, moral right of authors or any other right of any person and shall not constitute a defamation of any person.

e. Company shall comply with all applicable federal, state and local laws, rules, regulations, ordinances, guidelines and standards.

f. There are no outstanding claims or liens against the Screenplay or any rights therein which will impair the production or distribution of The Picture other than standard guild and/or laboratory liens.

g. All customary consents, licenses and other permissions have been or will be obtained by Company.

# 13. **INVESTOR'S REPRESENTATIONS AND WARRANTIES.** Investor represents and warrants that:

a. Investor has the full right, power and authority to enter into this Agreement and do all acts required of it hereunder.

b. Investor has not entered into any agreement with any third-party in conflict with the promises made to Company hereunder.

c. Investor is not a 'broker' or 'dealer' within the meaning of Section 3(a)(4) of the Securities Exchange Act of 1934, as amended (the '**1934 Act**') and is not required, nor by entering into this Agreement or performing hereunder shall be required, to register as a broker or dealer under Section 15 of the 1934 Act.

d. Investor is properly able to evaluate the proposed business of Company and the inherent risks therein.

e. Investor has reviewed with Investor's own tax advisor(s) and/or attorney(s), to the extent Investor considers it prudent or relevant, the consequences of the Investment and the transaction contemplated by this Agreement and is relying solely on such advisors and not on any statements or representations of Company in connection therewith, other than as provided for herein. Investor understands that Investor, and not Company, shall be solely responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement

f. Without waiver of any of Investor's rights, Investor is able to bear the substantial economic risks of the Investment and can afford to maintain the Investment for an indefinite period of time without realizing any direct or indirect cash return, and at the present time Investor could afford a complete loss of such investment.

g. Investor understands that this is a speculative investment and involves a high degree of risk (as further set forth the Company's Form C filed with the SEC). Investor has received and reviewed all information Investor considers necessary or appropriate for deciding whether to make the Investment. Investor has had an opportunity to ask questions and receive answers from Company, if any, regarding the terms and conditions of the Investment and regarding the business, financial affairs, and other aspects of Company and has further had the opportunity to obtain all information (to the extent Company possesses or can acquire such information without unreasonable effort or expense) which it deems necessary to

- 10 -

evaluate the investment and to verify the accuracy of information otherwise provided to Investor.

h. Investor is fully aware that in agreeing to enter into this Agreement, Company is relying upon the truth and accuracy of the representations and warranties of Investor made herein.

i. Investor acknowledges that this Investment has not been registered under the Securities Act, or qualified under any applicable blue sky laws in reliance, in part, on Investor's representations, warranties, and agreements herein. Investor further represents, warrants, and agrees that the Company is under no obligation to register or qualify the Investment under the Securities Act or under any state securities law, or to assist Investor in complying with any exemption from registration and qualification.

j. Investor has reviewed and understands all of the risks of the Investment as set forth in this Agreement.

14. **FORCE MAJEURE.** Company will not be deemed in default and will not be liable to Investor if Company is unable to complete production or Sale of The Picture by reason of one or more events of Force Majeure (as defined hereinbelow). In the event of the abandonment of The Picture as a result of any Force Majeure event, all unspent monies and insurance recoveries shall be returned to the Investors and Other Investors *pro rata* to each of their Percentage Ownership. In the event there is a Force Majeure event that results in a loss greater than or equal to 20% of the Budget, Company may require an abandonment of the production of The Picture.

An event of '**Force Majeure**' shall exist hereunder if Company's operations with respect to The Picture or the conduct of Company's business generally or the business of any of Company's partners, suppliers, vendors, licensors or distributors are impaired, hampered, interrupted, prevented, suspended, postponed or discontinued by reason of any armed conflict (whether or not there has been an official declaration of war or official statement as to the existence of a state of war); act of a public enemy; riot; civil disturbance; inclement weather; disease; epidemic; pandemic; fire; casualty; flood; explosion; earthquake; accident; boycott; labor controversy (including, without limitation, any lockout, walkout, strike or threat thereof); governmental statute, law, ordinance, policy, order, regulation, judgment or decree (whether legislative, executive or judicial and whether or not constitutional); act of God; failure of the producer, or any other production personnel or any principal member of the cast or director of The Picture to perform for any reason (including, without limitation, death, illness, incapacity, disfigurement, failure, refusal or neglect); embargo or delay of a common carrier; failure of technical facilities, material, power, transportation, fuel, personnel and/or other commodities which makes production in accordance with customary or established schedules and practices impractical; or direction of any municipal, county, state or national ordinance or law, any executive or judicial order, or any failure or delay of the laboratory processing The Picture's negatives, or other similar or dissimilar occurrence beyond Company's control; or if Company's business is in any way prevented or materially hampered because of the occurrence of events beyond the control of Company (whether foreseeable or unforeseeable) that make performance of Company's obligations materially more difficult, expensive, or dangerous than was reasonably anticipated by Company on the effective date of the Agreement.

15. **BUSINESS OPPORTUNITIES.** Each of the parties acknowledges that this Agreement relates only to The Picture and all rights related thereto and that none of the parties will in any way be restricted from any other business activity (including any motion picture activity), whether or not competitive to The Picture.

- 11 -

16. **INDEMNITY.** Investor shall indemnify and hold harmless the Company, Exhibit A, William Shatner, Melis Entertainment, and their affiliated entities, licensees, successors and assigns, and the directors, members, managers, officers, employees, attorneys, representatives, affiliates, and agents of the foregoing, harmless from any and all third-party demands, claims, causes of action, liabilities, suits, proceedings, investigations or inquiries, or any settlement thereof, and all related expenses including, but not limited, to all litigation expenses (including reasonable outside attorneys' fees and court costs) arising from any breach or alleged breach by Investor of any representation, warranty, covenant, obligation or agreement made by Investor hereunder.

17. **LIABILITY LIMITATION.** UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER FOR SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES INCLUDING LOSS OF REVENUE OR LOST PROFITS HEREUNDER (REGARDLESS OF THE FORM OF ACTION, WHETHER STATUTORY, OR IN CONTRACT, TORT OR OTHERWISE).

18. **ASSIGNMENT.** Investor shall not assign any of its rights or obligations pursuant to this Agreement to any third-party without the prior written approval of Company. Company may assign this Agreement to any third-party provided it assumes Company's obligations in writing.

19. **NOTICES.** Any notice, approval, consent, payment or other communication (any of which, a 'Notice') required or permitted to any Party under this Agreement shall be in writing to the addresses set forth herein or such other addresses as the Parties shall inform each other of, in writing, and shall be delivered personally, by courier, by FedEx, by UPS, by Express Mail, by US mail, return receipt requested or via email. Notices may also be delivered via email to the email address provided by the recipient to Wefunder. All Notices (other than those delivered via email) shall be deemed to have been duly given or made as of the date delivered or if delivery is refused, then as of the date presented. Any Notice delivered via email shall be deemed to have been duly given or made as of the date that the sender of the email receives a written confirmation of receipt from the intended recipient (which, if delivered via email, may only be in the form of a non-automated email response). Notices may also be delivered via any other method and shall be deemed duly given or made upon actual receipt by the intended recipient.

20. **ADDITIONAL DOCUMENTS.** The parties agree to execute, acknowledge and deliver to each other such additional documents, consistent herewith, as may be reasonably required in order to effectuate and carry out the intention of the parties.

21. **CONFIDENTIALITY.** The parties shall keep the Confidential Information (as defined hereinbelow) of the other party confidential and shall not disclose such terms other than as permitted herein or as authorized by the owner of such Confidential Information or as required pursuant to a valid law or court or governmental order provided that the party disclosing such information shall provide notice to the other party of such disclosure (to the extent not prohibited by such law or order) as soon as reasonably possible and shall cooperate with the other party in obtaining a protective order. Either party may disclose such Confidential Information as necessary to protect or enforce its rights hereunder or to its attorneys, bankers, accountants, agents and investors or as otherwise required to effectuate the purposes of this Agreement (including, without limitation disclosure of this Agreement to the SEC). 'Confidential Information' shall mean all non-public information of a party including, without limitation, a party's trade secrets, business and sales plans, customer lists, intellectual property, the identities of the Other Investors, Company's production techniques, documents, dealings and other information which a reasonable person would believe are confidential. The parties shall negotiate and execute a more formal confidentiality agreement

- 12 -

upon the request of either party.

22. **INJUNCTIVE RELIEF.** In the event of any breach of this Agreement by Company, Investor's sole remedy shall be an action at law for damages, if any, and Investor shall have no right to injunctive or other equitable relief or to terminate or rescind this Agreement or to interrupt or stop the development, production or distribution of The Picture.

23. **GOVERNING LAW; ARBITRATION.** This Agreement shall be governed by the laws of the State of California. Any dispute between the parties relating to their rights and obligations under this Agreement shall be resolved exclusively by arbitration conducted in accordance with the Arbitration Tribunal of the International Film and Television Association ('IFTA') or the American Arbitration Association ('AAA'), as Company shall elect as then in effect, except as provided below. Any such arbitration shall be held and conducted in Los Angeles, California, before one arbitrator who has at least 10 years of experience in entertainment law, who shall be selected by mutual agreement of the parties; if agreement is not reached on the selection of an arbitrator with in fifteen (15) days, then such arbitrator shall be appointed by the presiding judge of the Superior Court of the county in which the arbitration is to be conducted. The award or decision of the arbitrator or arbitrators, shall be final and judgment may be entered on it in accordance with applicable law in any court having jurisdiction over the matter. The arbitration shall be private and confidential. Each party hereby waives, to the fullest extent permitted by law, the right to institute, prosecute or join any class action case against Company or any affiliated entity or any of the officers, directors, employees, shareholders, members, agents or attorneys thereof, even if the rules of IFTA or the AAA (as applicable) would otherwise allow for such. Accordingly, the arbitrator may award money or injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party's individual claim. No class or representative or private attorney general theories of liability or prayers for relief may be maintained in any arbitration held under this Agreement. Any question regarding the enforceability or interpretation of this paragraph shall be decided by the arbitrator.

24. **MORALS CLAUSE.** As a material inducement to Company to enter into this Agreement, Investor has and shall conduct himself/herself/itself with due regard to social conventions, public morals, and decency and will not do or commit any act or become involved in any situation which shocks, insults, or offends the community or degrades Investor or brings Investor into public disrepute, contempt, scandal, or ridicule or reflects unfavorably upon Investor or Company or any exhibitor or distributor of The Picture or proscribed by the Morals Clause of a contract with a first run United States national television network. In the event of any breach of the preceding sentence then, notwithstanding anything to the contrary in this Agreement or elsewhere, Investor agrees that (i) Company shall have the right to withhold Investor's on-screen credit, if any; (ii) Investor shall not be included in, and Investor shall take no action nor authorize any action to include Investor in, any publicity, marketing materials, social media or other online sites; (iii) Investor shall neither make nor authorize any public statement about The Picture, Company or any person or entity associated with The Picture or Company. Investor agrees that Company shall be entitled to injunctive and equitable relief, without the necessity of posting a bond or other security, to enforce the provisions of this paragraph.

25. **MISCELLANEOUS.** The captions used in connection with the sections, paragraphs and subparagraphs of this Agreement are used only for purposes of reference and shall not be deemed to govern, limit, modify or in any manner effect the scope, meaning or intent of the provisions of this

- 13 -

Agreement or any part thereof, nor shall such captions be given any legal effect. This Agreement cancels and supersedes all prior agreements and understandings between the parties relating to the subject matter hereof, and contains all of the terms, conditions and promises of the parties hereto and no modification or amendment of any provision hereof shall be valid or binding unless made pursuant to a written agreement among the Producers and that does not adversely affect the Investor as determined in the sole discretion of the Company. Where any conflict arises between the provisions of any said amendment or modification and the provisions incorporated in earlier documents, the most recent provisions shall be controlling. Nothing herein contained shall be construed so as to require the commission of any act contrary to law and wherever there is any conflict between any provision of this Agreement and any present or future law, contrary to which the parties have no legal right to contract, the latter shall prevail, but in such event, the provision(s) of this Agreement effected shall be curtailed and limited only to the minimum extent necessary to bring it within the requirements of such law. This Agreement may be executed in one or more counterparts, each of which when taken together shall constitute one and the same agreement, and each of which shall constitute an original of this Agreement. In addition, this Agreement may be executed electronically (including via scans and facsimile) and such electronic versions shall constitute an original of this Agreement. No failure by either party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such covenant, duty, agreement, or condition, or any such breach. Notwithstanding anything to the contrary contained in this Agreement, there are no third-party beneficiaries to this Agreement. Submission of this Agreement for examination, negotiation, or signature does not constitute an offer, and this Agreement shall not be effective until it is duly executed and delivered, if at all, by each party hereto. Each party acknowledges that he/she/it has had an opportunity to consult with an independent attorney or other representative regarding the terms and conditions of this Agreement and that the drafting and negotiation of this Agreement has been fully participated in by all parties hereto and, for all purposes, this Agreement shall be conclusively deemed to be jointly drafted by all parties. Words importing the singular shall include the plural and vice versa, words importing any gender shall include all other genders, words importing persons shall include bodies corporate, unincorporated associations and partnerships and vice versa. References to the whole shall include the part and vice versa. Defined terms herein shall include all forms, variations and conjugations thereof. Whenever examples are used in this Agreement with the words “including,” “for example,” “e.g.,” “such as,” “etc.” or similar or any derivation thereof, such examples are intended to be illustrative and not in limitation thereof. All references to the words “and” or “or” shall be deemed to be “and/or”. All references to dollars herein shall mean United States dollars. Except as specifically set forth herein, nothing in this Agreement shall be construed as creating a partnership or joint venture of any kind between the parties or as constituting any party as the agent of the other parties for any purpose whatsoever and no party shall have the authority or power to bind the other parties or to contract in the name of or create a liability against any other party in any way or for any purpose. Each party undertakes with the other to do all things reasonably within its power which are necessary or desirable to give effect to the spirit and intent of this Agreement. Any provision of this Agreement that contemplates performance or observance subsequent to termination or expiration of this Agreement (including, without limitation, any terms governing confidentiality, limitation of liability, and/or indemnification herein) shall survive termination or expiration of this Agreement and shall continue in full force and effect.

#### END OF STANDARD TERMS

Please see “Risk Factors” in the Company’s Form C.

SIGNATURE PAGE

- 14 -

# **EXHIBIT 1**

# **BUDGET**

It is anticipated that money raised from this offering will be used as follows:

| Production Budget of Film | $565,101 | 75% |
| --- | --- | --- |
| 3rd Party Hard Costs | $415,101 | 55% |
| Fees to Exhibit A (For production, directing, writing, & cinematography) | $150,000 | 20% |
| Fees tp Legion M | $0 | 0% |
| Fees to William Shatner | $0 | 0% |
| Equity Crowdfunding Expenses | $118,750 | 16% |
| Wefunder Fees | $48,750 | 6.5%* |
| Legal and Accounting Costs | $20,000 | 3% |
| Marketing Costs | $50,000 | 7% |
| Contingency | $66,149 | 9% |
| TOTAL OFFERING AMOUNT RECEIVED FROM OFFERINGS | $750,000 | 100% |

*Wefunder fees are shown as a percentage of the combined offering. Wefunder charges 7.5% fees on investments made via Regulation CF, and 0% on investments made via Regulation D.*

The identified use of proceeds in this Budget are subject to change at the sole direction of the officers and directors of the Company based on the business needs of The Picture.

For more details see 'Use of Proceeds' in the Form C.

- 15 -

**Attachment 4:** `LegionMSPVSubAgmt2.pdf`

# Subscription Agreement

[INVESTMENT AMOUNT]

[INVESTMENT DATE]

William Shatner Documentary I (the "SPV"), a series of Wefunder SPV, LLC (the "LLC"), is a special purpose vehicle that will invest all of its assets in securities issued by Legion M Entertainment, Inc. (the "Company"). By making an investment in the SPV through the Wefunder website, I understand and agree to the representations set forth below.

I have reviewed the following information and documents in connection with this Subscription Agreement:

1. The information on the Wefunder website about the Company. I acknowledge that this information was prepared solely by either the Company or a third party whose work has been verified by the Company, and that none of Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC or Wefunder Advisors, LLC, nor any of their affiliates, employees or agents, are responsible for the adequacy, completeness, or accuracy of this information;
2. The Form C relating to this investment, which provides information about investment in the Company through the use of the SPV;
3. The Series Appendix, an appendix to the Wefunder SPV, LLC limited liability company agreement (the "LLC Agreement"), which sets forth certain specific terms of the SPV;
4. The Terms Appendix, which summarizes the terms of the Company securities to be purchased by the SPV;
5. The LLC Agreement, which sets forth other terms applicable to each SPV;
6. This Subscription Agreement, which sets forth the terms governing your investment in the SPV, and that sets forth certain representations you are making in connection with your investment in the SPV;
7. The Wefunder Investor Agreement; and
8. The Wefunder Terms of Service.

By making an investment in the SPV through the Wefunder website, I agree to be bound by this Subscription Agreement and the terms of the other agreements listed above with respect to my investment in the SPV.

# Subscription Agreement

# SCOPE OF AGREEMENT AND INVESTOR ELIGIBILITY
REPRESENTATIONS

A. This agreement ("Agreement") applies to each investment in a series ("SPV") of Wefunder SPV, LLC (the "LLC"). Each series is a separate pool of assets from every other series. Each SPV will invest all of its assets in securities issued by a single company ("Company") as set forth in the applicable series appendix ("Series Appendix") to the Wefunder SPV, LLC limited liability company agreement ("LLC Agreement"). The terms of the Company securities to be purchased by the SPV are summarized in an appendix ("Terms Appendix") attached to this Agreement.

B. Each SPV is formed by and operated by Wefunder Admin, LLC on behalf of the Company in whose securities that SPV invests.

C. Important information about the Company, about the related SPV, and more generally about investments through the Wefunder website, is available through the Wefunder website. The Investor should review that information, and all relevant Company Information (as defined below), carefully before making an investment in any SPV.

D. Each SPV will offer membership interests ("Interests") in that SPV pursuant to Regulation Crowdfunding under the U.S. Securities Act of 1933, as amended (the "Securities Act").

E. You hereby agree that each time you make an investment in any SPV, you will be deemed to have entered into this Agreement, and will be deemed to have made each representation and covenant contained in this Agreement.

F. Except as the context otherwise requires, any reference in this Subscription Agreement to:

1. a "SPV" shall mean "The LLC acting solely on behalf of and for the account of the SPV";

2. "Investor" and "you" shall mean a person (whether individually, jointly with another person, or through his or her individual retirement account) who has agreed to invest, or has invested, in any SPV; and

3. "Company Information" means:

   a. The information on the Wefunder website about the Company. I acknowledge that this information was prepared solely by either the Company or a third party whose work has been verified by the Company, and that neither Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC or Wefunder Advisors, LLC (together, the "Wefunder entities," nor any of their affiliates, employees or agents, are responsible for the adequacy, completeness, or accuracy of this information;

   b. The Form C relating to this investment, which provides information about investment in the Company through the use of the SPV;

   c. The Series Appendix, an appendix to the Wefunder SPV, LLC limited liability company agreement (the "LLC Agreement"), which sets forth certain specific terms of the SPV;

   d. The Terms Appendix, which summarizes the terms of the Company securities to be purchased by the SPV;

   e. The LLC Agreement, which sets forth other terms applicable to each SPV;

   f. This Subscription Agreement, which sets forth the terms governing your investment in the SPV, and that sets forth certain representations you are making in connection with your investment in the SPV;

   g. The Wefunder Investor Agreement; and

   h. The Wefunder Terms of Service.

INVESTOR'S REPRESENTATIONS AND COVENANTS

1. Investor's Review of Information and Investment Decision

1.1. The Investor has carefully read and understands the Company Information. The Investor acknowledges that it has made an independent decision to invest indirectly in the Company through the SPV and that, in making its decision to invest in a SPV, the Investor has relied solely upon the Company Information, any other relevant information on the Wefunder website, and independent investigations made by the Investor. The Investor understands that no representations or warranties have been made to the Investor by the LLC, the relevant SPV, any administrator appointed from time to time with respect to the SPV (the "Administrator"), any lead investor appointed from time to time with respect to the SPV (the "Lead Investor"), or any partner, member, officer, employee, agent, affiliate or subsidiary of any of them regarding the Company.

1.2. The Investor has been provided an opportunity to request additional information concerning the Company and the offering through the Ask A Question feature on wefunder.com.

1.3. The Investor understands and agrees that neither Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC, any of their affiliates, nor any director, manager, officer, shareholder, member, employee or agent of Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC or any of their affiliates (each, a "Wefunder Party," and collectively, "Wefunder Parties") shall be liable in connection with any information or omission of information contained in materials prepared or supplied by the Company. Such materials may include, but are not limited to, information provided by the Company in the Form C related to the offering, information available through the Wefunder website, and materials distributed to the Investor by the SPV on behalf of a Company.

1.4. The Investor represents and agrees that no Wefunder Party has recommended or suggested any investment in a SPV, or any investment related to a Company, to the Investor.

1.5. Investor understands that no Wefunder Party is an adviser to Investor, and that Investor is not an advisory or other client of any Wefunder Party.

1.6. The Investor is not relying on any Wefunder Party or any other person or entity with respect to the legal, accounting, business, investment, pension, tax or other economic considerations involved in this investment other than the Investor's own advisers that are not affiliated with any of the foregoing persons.

1.7. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the Investor's investment in the SPV and is able to bear such risks. The Investor has obtained, in the Investor's judgment, sufficient information to evaluate the merits and risks of such investment. The Investor has evaluated the risks of investing in the SPV, understands there are substantial risks of loss incidental to the purchase of an Interest and has determined that the Interest is a suitable investment for the Investor and consistent with the general investment objectives of the Investor.

## 2. Investor's Representations Related To Investment in a SPV.

2.1. The Investor is acquiring the Interest for its own account, for investment purposes only and not with an intent to resell or distribute the Interest (or any distributions received from the SPV in whole or in part), and the Investor agrees that it will not sell or otherwise transfer the Interest unless in compliance with Regulation Crowdfunding and other applicable securities laws, and with the terms and conditions of this Agreement.

2.2. The Investor's investment in the Interest is consistent with the investment purposes, objectives and cash flow requirements of the Investor and will not adversely affect the Investor's overall need for diversification and liquidity.

2.3. The Investor has all requisite power, authority and capacity to acquire and hold the Interest and to execute, deliver and comply with the terms of each of the instruments required to be executed and delivered by the Investor in connection with the Investor's subscription for the Interest, including without limitation this Subscription Agreement, and such execution, delivery and compliance does not conflict with, or constitute a default under, any instruments governing the Investor, any law, regulation or order, or any agreement or other undertaking to which the Investor is a party or by which the Investor may be bound. If the Investor is an entity, the person executing and delivering each of such instruments on behalf of the Investor has all requisite power, authority and capacity to execute and deliver such instruments, and, upon request by the SPV, will furnish to the SPV a true and correct copy of any instruments governing the Investor, including all amendments thereto. The signature on each of such instruments is genuine and each of such instruments constitutes a legal, valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms.

2.4. The Wefunder Parties are each hereby authorized and instructed to accept and execute any instructions in respect of the Interest given by the Investor in written or electronic form. The Wefunder Parties may rely conclusively upon and shall incur no liability in respect of any action taken upon any notice, consent, request, instructions or other instrument believed in good faith to be genuine or to be signed by properly authorized persons of the Investor.

2.5. Pursuant to the requirements of Treas. Reg. § 301.6109-1(c), the Investor has provided, or agrees to provide upon the earlier of (i) two years of an acquisition of an Interest or (ii) twenty (20) days before any distribution is to be made from the SPV, his, her or its taxpayer identification number (e.g., social security number or employer identification number) under penalties of perjury and has or will attest that the Internal Revenue Service has not notified the Investor that he, she or it is subject to backup withholding.

## 3. The Manager Has The Right To Reject Any Subscription, In Whole Or In Part.

3.1. The Investor understands that the SPV will not register as an investment company under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"), nor will it make a public offering of its securities within the United States.

3.2. The Investor understands that the value of all investments in any SPV made through individual retirement accounts ("IRAs") must be less than 25% of the value of the SPV's assets.

3.3. If the Investor is investing in a SPV through an employee benefit plan of any kind, including an individual retirement account (the "Plan"), and an individual or entity (the "Fiduciary") has entered into this Agreement on behalf of the Plan, the Fiduciary hereby makes the following representations, warranties, and covenants:

i. The Fiduciary is a fiduciary of the Plan who is authorized to invest Plan assets or is acting at the direction of a Plan fiduciary authorized to invest Plan assets. The Fiduciary has determined that an investment in the Fund is consistent with the Fiduciary's responsibilities to the Plan under Employee Retirement Income Security Act of 1974, as amended ("ERISA") or other applicable law, and is qualified to make such investment decision. The Fiduciary is authorized to make all representations, covenants and agreements set forth in this Agreement about and on behalf of the Investor, and the Fiduciary hereby agrees that, except for the representations, covenants and agreements contained in this section 3.3. all representations, covenants and agreements contained in this Agreement are made on behalf of the Investor who is investing through the Plan.

ii. The execution and delivery of this Subscription Agreement, and the investment contemplated hereby has been duly authorized by all appropriate and necessary parties pursuant to the provisions of the instrument or instruments governing the Plan and any related trust; and (B) will not violate, and is not otherwise inconsistent with, the terms of such instrument or instruments.

iii. The Fiduciary acknowledges that the assets of the Fund will be invested in accordance with the Company Information related to that Fund.

iv. The Plan's purchase and holding of an Interest will not constitute a non-exempt transaction prohibited under ERISA, Section 4975 of the Internal Revenue Code (the "Code"), or any similar laws or other federal, state, local, foreign or other laws or regulations applicable to the Plan and its investments. None of the Wefunder entities nor any of their affiliates, agents, or employees: (A) exercises any authority or control with respect to the management or disposition of assets of the Plan used to purchase an Interest, (B) renders investment advice for a fee (pursuant to an agreement or understanding that such advice will serve as a primary basis for investment decisions and that such advice will be based on the particular investment needs of the Plan), with respect to such assets of the Plan, or has the authority to do so, or (C) is an employer maintaining or contributing to, or any of whose employees are covered by, the Plan.

v. The Fiduciary understands and agrees to the fee arrangements described in the Company Information.

vi. The Fiduciary understands and agrees that, to prevent the assets of the SPV from being treated as "plan assets" for purposes of ERISA and Section 4975 of the Code, the Investor may be prohibited from purchasing or acquiring an Interest or may be required to redeem its Interest or a portion thereof.

3.4. The Investor acknowledges that the SPV and any Administrator, on the SPV's behalf, may not accept any investment from an Investor if the Investor cannot truthfully make the representations contained herein.

# **4. The Correctness And Accuracy Of All Information Provided By Investor To The LLC Or The SPV.**

4.1. The Investor confirms that all information and documentation provided to the LLC, the SPV, and any Administrator, including, but not limited to, all information regarding the Investor's identity, taxpayer identification number, the source of the funds to be invested in the SPV, and the Investor's eligibility to invest in offerings under Regulation Crowdfunding, is true, correct and complete. Should any such information change or no longer be accurate, the Investor agrees and covenants that they will promptly notify the Wefunder Parties of such changes via the wefunder.com platform. The Investor agrees and covenants that he, she or it will maintain accurate and up-to-date contact information (including email and mailing address) on the wefunder.com platform and will promptly update such information in the event it changes or is no longer accurate.

4.2. The representations, warranties, agreements, undertakings and acknowledgments made by the Investor in this Subscription Agreement will be relied upon by the LLC, the SPV, and any Administrator in determining the Fund's compliance with federal and state securities laws, and shall survive the Investor's admission as a Member of the SPV.

4.3. All information that the Investor has provided to the LLC, the SPV, and any Administrator concerning the knowledge and experience of financial, tax and business matters of the Investor is correct and complete.

## 5. The Wefunder Parties' Right To Use Investor Information.

5.1. The Investor agrees and consents to the Wefunder Parties, their delegates and their duly authorized agents and any of their respective related, associated or affiliated companies obtaining, holding, using, disclosing and processing the Investor's data:

a. to facilitate the acceptance, management and administration of the Investor's subscription for an interest on an on-going basis;

b. for any other specific purposes where the Investor has given specific consent to do so;

c. to carry out statistical analysis, market research, and tracking of investment performance over time;

d. to comply with legal or regulatory requirements applicable to the SPV and any Administrator or the Investor, including, but not limited to, in connection with anti-money laundering and similar laws;

e. for disclosure or transfer to third parties including the Investor's financial adviser (where appropriate), regulatory bodies, auditors, technology providers or to the SPV, any Administrator, any Lead Investor, and their delegates or their duly appointed agents and any of their respective related, associated or affiliated companies for the purposes specified above;

f. if the contents thereof are relevant to any issue in any action, suit or proceeding to which the LLC, the SPV, any Administrator, any Lead Investor, or their affiliates are a party or by which they are or may be bound;

g. for other legitimate business of the LLC, the SPV, any Administrator, or any Lead Investor.

5.2. The Investor acknowledges and agrees that it will provide additional information or take such other actions as may be necessary or advisable for the SPV or any Administrator (in the sole judgment of the SPV and/or any Administrator) to comply with any disclosure and compliance policies, related legal process or appropriate requests (whether formal or informal) or otherwise.

5.3. The Investor agrees and consents to disclosure by the LLC, the SPV and any of their agents, including any Administrator or any Lead Investor, to relevant third parties of information pertaining to the Investor in respect of disclosure and compliance policies or information requests related thereto. Without limiting the generality of the foregoing, the Investor agrees that information about the Investor may be provided to the Company in whose securities a SPV will or proposes to invest.

5.4. The Investor authorizes the LLC, the SPV, any Administrator, and each SPV service provider to disclose the Investor's nonpublic personal information to comply with regulatory and contractual requirements applicable to the SPV and its investments. Any such disclosure shall be permitted notwithstanding any privacy policy or similar restrictions regarding the disclosure of the Investor's nonpublic personal information.

## 6. Key Risk Factors

6.1. The Investor understands that investment in a SPV may involve a complete loss of the Investor's investment. In this regard, the Investor understands that such venture investments involve a high degree of risk, and that many or most venture company investments lose money. An Investor may ultimately receive cash, securities, or a combination of cash and securities (and in many cases nothing at all). If the Investor receives securities, the securities may not be publicly traded, and may not have any significant value.

6.2. The Investor understands and agrees that the Interests are subject to restrictions on transfer and cannot be redeemed. Instead, an Investor typically must hold his or her Interest in a SPV until the SPV has sold or otherwise disposed of its investments and the SPV distributes its investments to the investors in the SPV (a '**Liquidation Event**'). An Investor typically will not receive any distributions until such a Liquidation Event (and may not receive anything even upon a Liquidation Event), which may not occur for many years. The Investor must therefore bear the economic risk of holding their investment for an indefinite period of time.6.3. The Investor understands and agrees that the Interests: (a) have not been registered under the Securities Act or any other law of the United States, or under the securities laws of any state or other jurisdiction, and therefore an Interest cannot be resold, pledged, assigned or otherwise disposed of unless it is so registered or an exemption from registration is available; and (b) can only be transferred as permitted under Regulation Crowdfunding and subject to the terms and conditions of this Agreement.6.4. The Investor understands that no guarantees have been made to the Investor about future performance or financial results of the SPV, and an investment in the SPV may result in a gain or loss upon termination or liquidation of the SPV. It is possible that the investors in a SPV will have 'phantom income,' which could require them to pay taxes on their investment in a SPV even though the SPV does not distribute any income (or does not distribute sufficient income to pay the taxes).6.5. The Investor understands and agrees that the SPV was formed by and is operated by Wefunder Admin, LLC on behalf of the Company. Investors will have no right to manage or influence the management of any SPV or of the LLC.6.6. The Investor understands and agrees that the Company may appoint a Lead Investor and that, if appointed, pursuant to a power of attorney granted by the Investor in the Investor Agreement, the Lead Investor will exercise voting authority on behalf of the Investor with respect to the SPV securities the Investor owns.6.7. The Investor represents that he or she has read and understands the risk factors contained in the Company Information. The Investor understands and agrees that each Company is solely responsible for providing risk factors, conflicts of interest, and other disclosures that investors should consider when investing in securities issued by that Company (including through a SPV), and that the Wefunder Parties have no ability to assure, and have not in any way assured, that any or all such risk factors, conflicts of interest and other disclosures have been presented fully and fairly, or have been presented at all.6.8. The Investor understands that any privacy statements, reports or other communications regarding the SPV and the Investor's investment in the SPV (including annual and other updates, and tax documents) will be delivered via electronic means, including through wefunder.com. The Investor hereby consents to electronic delivery as described in the preceding sentence. In so consenting, the Investor acknowledges that email messages are not secure and may contain computer viruses or other defects, may not be accurately replicated on other systems, or may be intercepted, deleted or interfered with, with or without the knowledge of the sender or the intended recipient. The Investor also acknowledges that an email from the Wefunder Parties may be accessed by recipients other than the Investor and may be interfered with, may contain computer viruses or other defects and may not be successfully replicated on other systems. No Wefunder Party gives any warranties in relation to these matters.6.9. The Investor understands and agrees that if he, she or it does not provide a valid taxpayer identification number under penalties of perjury, and attest that the Investor has not been notified by the Internal Revenue Service that he, she or it is subject to backup withholding, the SPV will be required to withhold from any proceeds otherwise payable to the Investor an amount necessary to satisfy the SPV's backup withholding obligations.6.10. The Investor understands and agrees that if he, she or it does not provide a valid taxpayer identification number to the SPV, the SPV will withhold from any proceeds otherwise payable to the Investor an amount necessary for the SPV to satisfy its tax withholding obligations with respect to such amount. The SPV may also withhold any other amounts representing the SPV's reasonable estimation of penalties that may be charged by the Internal Revenue Service or any other taxing authority as a result of the Investor's failure to provide a valid taxpayer identification number.

## 7. Compliance With Anti-Money Laundering Laws.

7.1. The Investor represents and warrants that the Investor's investment was not directly or indirectly derived from illegal activities, including any activities that would violate U.S. Federal or State laws or any laws and regulations of other countries.

7.2. The Investor acknowledges that U.S. Federal law, regulations and Executive Orders administered by the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC") may prohibit the SPV, any Administrator, or any Lead Investor from, among other things, engaging in transactions with, and the provision of services to, persons on the list of Specially Designated Nationals and Blocked Persons and persons, foreign countries and territories that are the subject of U.S. sanctions administered by OFAC (collectively, the "OFAC Maintained Sanctions").

7.3. The Investor acknowledges that the SPV prohibits the investment of funds by any persons or entities that are (i) the subject of OFAC Maintained Sanctions, (ii) acting, directly or indirectly, in contravention of any applicable laws and regulations, including anti-money laundering regulations or conventions, or on behalf of persons or entities subject to an OFAC Maintained Sanction, (iii) acting, directly or indirectly, for a senior foreign political figure, any member of a senior foreign political figure's immediate family or any close associate of a senior foreign political figure, unless the SPV, after being specifically notified by the Investor in writing that it is such a person, conducts further due diligence, and determines that such investment shall be permitted, or (iv) acting, directly or indirectly, for a foreign shell bank (such persons or entities in (i) - (iv) are collectively referred to as "Prohibited Persons"). The Investor represents and warrants that it is not, and is not acting directly or indirectly on behalf of, a Prohibited Person.

7.4. To the extent the Investor has any beneficial owners, (i) it has carried out thorough due diligence to establish the identities of such beneficial owners, (ii) based on such due diligence, the Investor reasonably believes that no such beneficial owners are Prohibited Persons, (iii) it holds the evidence of such identities and status and will maintain all such evidence for at least five years from the date of the liquidation or termination of the SPV, and (iv) it will make available such information and any additional information requested by the SPV that is required under applicable regulations.

7.5. The Investor acknowledges and agrees that the SPV or any Administrator may "freeze the account" of the Investor, including, but not limited to, by suspending distributions from the SPV to which the Investor would otherwise be entitled, if necessary to comply with anti-money laundering statutes or regulations.

7.6. The Investor acknowledges and agrees that the SPV and/or any Administrator, in complying with anti-money laundering statutes, regulations and goals, may file voluntarily and/or as required by law suspicious activity reports ("SARs") or any other information with governmental and law enforcement agencies that identify transactions and activities that the SPV or any Administrator or their agents reasonably determine to be suspicious, or is otherwise required by law. The Investor acknowledges that the LLC, the SPV, and any Administrator are prohibited by law from disclosing to third parties, including the Investor, any filing or the substance of any SARs.

7.7. The Investor agrees that, upon the request of the LLC, the SPV, or any Administrator, it will provide such information as the LLC, the SPV, or any Administrator requires to satisfy applicable anti-money laundering laws and regulations, including, without limitation, background documentation about the Investor

## 8. Regulatory Provisions

8.1. The Investor understands that no federal or state agency has passed upon the Interests or made any findings or determination as to the fairness of this investment.

8.2. The Investor certifies that the information contained in the executed copy of Form W-9 submitted to the SPV (if any) and/or the taxpayer identification provided to the SPV is correct. The Investor agrees to provide such other documentation as the SPV determines may be necessary for the SPV to fulfill any tax reporting and/or withholding requirements.

8.3. The Investor understands and agrees that the Company may cause the SPV to make an election under Section 754 of the Internal Revenue Code (the "Code") or an election to be treated as an "electing investment partnership" for purposes of Section 743 of the Code. If the SPV elects to be treated as an electing investment partnership, the Investor shall cooperate with the SPV to maintain that status and shall not take any action that would be inconsistent with such election. Upon request, the Investor shall provide the SPV with any information necessary to allow the SPV to comply with (a) its obligations to make tax basis adjustments under Section 734 or 743 of the Code and (b) its obligations as an electing investment partnership.

8.4. The Investor consents to receive any Schedule K-1 (Partner's Share of Income, Deductions, Credits, etc.) from the SPV electronically via email, the Internet and/or another electronic reporting medium in lieu of paper copies. The Investor agrees that it will confirm this consent electronically at a future date in a manner set forth by the Company at such time and as required by the electronic receipt consent rules set forth by the Internal Revenue Service. The Investor may request a paper copy of the Investor's Schedule K-1 by contacting Wefunder Inc. at support@wefunder.com or such other email address as specified on the wefunder.com platform. Requesting a paper copy will not constitute a withdrawal of the Investor's consent to receive reports or other communications, including Schedule K-1, electronically. The Investor may withdraw its consent for electronic delivery or change its contact preferences for such delivery at any time by writing to support@wefunder.com or such other email address as specified on the wefunder.com platform. Such withdrawal will take effect promptly after receipt, unless otherwise agreed upon. Upon receipt of a withdrawal request, the SPV will confirm the withdrawal and the date on which it takes effect in writing (either electronically or on paper). A withdrawal of consent does not apply to a statement that was furnished electronically before the date on which the withdrawal of consent takes effect. The SPV will cease providing information electronically upon termination of the SPV. Notwithstanding the Investor's consent to receive materials electronically, the Investor still may be required to print and attach its Schedule K-1 to a federal, state or local tax return.

## 9. Miscellaneous Provisions

## 9.1. Indemnification

9.1.1. The Investor agrees to indemnify and hold harmless the LLC, the SPV, any Administrator, any Lead Investor, or any partner, member, officer, employee, agent, affiliate or subsidiary of any of them, and each other person, if any, who controls, is controlled by, or is under common control with, any of the foregoing, within the meaning of Section 15 of the Securities Act, and their respective officers, directors, partners, members, shareholders, owners, employees and agents (collectively, the "Indemnified Parties") against any and all loss, liability, claim, damage and expense whatsoever (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) arising out of or based upon (i) any false representation or warranty made by the Investor, or breach or failure by the Investor to comply with any covenant or agreement made by the Investor, in this Subscription Agreement or in any other document furnished by the Investor to any of the foregoing in connection with this transaction, or (ii) any action for securities law violations instituted by the Investor that is finally resolved by judgment against the Investor.

9.1.2. The Investor also agrees to indemnify each Indemnified Party for any and all costs, fees and expenses (including legal fees and disbursements) in connection with any damages resulting from the Investor's misrepresentation or misstatement contained herein, or the assertion of the Investor's lack of proper authorization from the beneficial owner to enter into this Subscription Agreement or perform the obligations hereof.

9.1.3. The Investor agrees to indemnify and hold harmless each Indemnified Party from and against any tax, interest, additions to tax, penalties, reasonable attorneys' and accountants' fees and disbursements, together with interest on the foregoing amounts at a rate determined by the SPV or any Administrator computed from the date of payment through the date of reimbursement, arising from the failure to withhold and pay over to the U.S. Internal Revenue Service or the taxing authority of any other jurisdiction any amounts computed, as required by applicable law, with respect to the income or gains allocated to or amounts distributed to the Investor with respect to its Interest during the period from the Investor's acquisition of the Interest until the Investor's transfer of the Interest in accordance with this Agreement, the LLC Agreement, and Regulation Crowdfunding.

9.1.4. If for any reason (other than the willful misfeasance or gross negligence of the entity that would otherwise be indemnified) the foregoing indemnification is unavailable to, or is insufficient to hold such Indemnified Party harmless, then the Investor shall contribute to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Investor on the one hand and the Indemnified Parties on the other but also the relative fault of the Investor and the Indemnified Parties, as well as any relevant equitable considerations.

9.1.5. The reimbursement, indemnity and contribution obligations of the Investor under this section shall be in addition to any liability that the Investor may otherwise have, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnified Parties.

9.2. **Limitation of Liability.** The LLC is a Delaware 'multi-series' limited liability company. As a multi-series limited liability company, the LLC may operate multiple series with the benefit of segregation of assets and liabilities among each of its series pursuant to the Delaware Limited Liability Company Act, as amended (the '**Delaware Act**'). Accordingly, the Investor hereby agrees that the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a series (including the SPV) shall be enforceable against the assets of that series only and not against the LLC generally or the assets of any other series. In addition, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the LLC generally, or any particular series, shall be enforceable against the assets of any other series.

9.3. **Counsel.** The Investor understands that Morrison & Foerster LLP serves as legal counsel on certain matters to Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC and Wefunder Advisors, LLC and not to the SPV or any Investor by virtue of its investment in the SPV, and that no independent counsel has been retained to represent the SPV or Investors in the SPV. The Investor also understands that Morrison & Foerster LLP has not independently verified any factual assertions made in the Company Information or on the Wefunder website and is not responsible for the SPV's compliance with its investment program or applicable law.

9.4. **Power of Attorney.** The Investor hereby appoints each of the Company and Wefunder Admin, LLC as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, acknowledge, swear to and file:

9.4.1. a Certificate of Formation of the LLC and any amendments required under the Delaware Act

9.4.2. the LLC Agreement and any duly adopted amendments;

9.4.3. any and all instruments, certificates and other documents that may be deemed necessary or desirable to effect the winding-up and termination of the LLC or the SPV (including a Certificate of Cancellation of the Certificate of Formation); and

9.4.4. any business certificate, fictitious name certificate, related amendment or other instrument or document of any kind necessary or desirable to accomplish the LLC's or the SPV's business, purpose and objectives or required by any applicable U.S., state, local or other law.

This power of attorney is coupled with an interest, is irrevocable, and shall survive and shall not be affected by the subsequent death, disability, incompetency, termination, bankruptcy, insolvency or dissolution of the Investor; provided, however, that this power of attorney will terminate upon the substitution of another SPV member for all of the Investor's investment in the LLC or the SPV or upon the liquidation or termination of the LLC or the SPV. The Investor hereby waives any and all defenses that may be available to contest, negate or disaffirm the actions of the LLC, the SPV, and any Administrator taken in good faith under this power of attorney.

## 9.5. Confidentiality.

9.5.1. The Investor agrees that the Company Information and all financial statements (if any), tax reports (if any), portfolio valuations (if any), private placement memoranda (if any), reviews or analyses of potential or actual investments (if any), reports or other materials prepared or produced by the SPV and/or any Administrator and all other documents and information concerning the affairs of the SPV and/or the Fund's investments, including, without limitation, information about the Company, and/or the persons directly or indirectly investing in the SPV (collectively, the "Confidential Information") that the Investor may receive pursuant to or in accordance with the use of the Wefunder website, an investment in one or more SPVs, or otherwise as a result of its ownership of an Interest in the SPV, constitute proprietary and confidential information about the SPV, any Administrator, and/or any Lead Investor (the "Affected Parties").

9.5.2. The Investor acknowledges that the Affected Parties derive independent economic value from the Confidential Information not being generally known and that the Confidential Information is the subject of reasonable efforts to maintain its secrecy. The Investor further acknowledges that the Confidential Information is a trade secret, the disclosure of which is likely to cause substantial and irreparable competitive harm to the Affected Companies or their respective businesses. The Investor shall not reproduce any of the Confidential Information or portion thereof or make the contents thereof available to any third party other than a disclosure on a need-to-know basis to the Investor's legal, accounting or investment advisers, auditors and representatives (collectively, "Advisers"), except to the extent compelled to do so in accordance with applicable law (in which case the Investor shall promptly notify the SPV of the Investor's obligation to disclose any Confidential Information) or with respect to Confidential Information that otherwise becomes publicly available other than through breach of this provision by the Investor.

9.5.3. To the fullest extent permitted by law, the Investor agrees not to request disclosure or inspection of any such information after the Investor is notified (whether in response to the Investor's request for information or otherwise) that the SPV has determined not to disclose such information.

9.5.4. The Investor agrees that the LLC, the SPV, and the SPV service providers would be subject to potentially irreparable injury as a result of any breach by the Investor of the covenants and agreements set forth in this Item 9.5, and that monetary damages would not be sufficient to compensate or make whole the LLC, the SPV, and the SPV services providers for any such breach. Accordingly the Investor agrees that the LLC, the SPV, and the SPV service providers shall be entitled to equitable and injunctive relief, on an emergency, temporary, preliminary and/or permanent basis, to prevent any such breach or the continuation thereof.

9.6. Amendments. Neither this Subscription Agreement nor any term hereof may be supplemented, changed, waived, discharged or terminated except with the written consent of the Investor and the Company on behalf of the relevant SPV. For the sake of clarity, the restriction on the Company in the preceding sentence applies solely to the form of this Subscription Agreement applicable to SPVs that have had a closing, and does not prevent the Company from changing the form and content of this Subscription Agreement for use in offerings of SPVs that have not had a closing.

9.7. **Assignability and Transferability.** This Subscription Agreement is not transferable or assignable by the Investor without the prior written consent of the Company on behalf of the SPV, and any transfer or assignment in violation of this provision shall be null and void. The Interests in the SPV being acquired by Investor herein may only be transferred by Investor in compliance with Regulation Crowdfunding and the terms and conditions of this Agreement. If Investor seeks to transfer the Interests, Investor shall first give written notice to the Company and Wefunder Admin, LLC, including the number of Interests that Investor desires to transfer, the proposed price, the name and contact information of the proposed buyer, and any other information that the Company or Wefunder Admin, LLC may reasonably request. To the extent possible, such notice shall be provided through the Wefunder.com website. Any transfer of Interests shall be subject to execution by Investor and the proposed transferee of appropriate documentation, as may be required by the Company or Wefunder Admin, LLC, in their discretion. Investor further acknowledges that pursuant to the LLC Agreement, Wefunder Admin, LLC (as Series Manager of the SPV), may impose additional restrictions on or prohibit the Transfer of Interests for any reason or no reason, in its sole discretion.

9.8. **Repurchase.** In the event that the SPV or any Administrator determines that it is likely that within twelve (12) months the securities of the SPV or the Company will be held of record by a number of persons that would require the SPV or the Company to register a class of its equity securities under the Securities Exchange Act of 1934, as amended ("Exchange Act"), as required by Section 12(g) or 15(d) thereof, the SPV shall have the option to repurchase the Interests from each Investor to the extent necessary to avoid the requirement to register a class of its securities under the Exchange Act. Such repurchase of Interests shall be for the greater of (i) the purchase price of the Interests, or (ii) the fair market value of the Interests, as determined by an independent appraiser of securities chosen by the Administrator. Any such repurchase may only occur with the consent of Wefunder Admin, LLC, as Series Manager of the SPV.

9.9. **Governing Law:** Consent to Jurisdiction. Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed under the laws of the State of Delaware. Any action or proceeding brought by the SPV or any SPV service provider against one or more investors in the SPV relating in any way to this Subscription Agreement or the LLC Agreement may, and any action or proceeding brought by any other party against the SPV or any SPV service provider relating in any way to this Subscription Agreement or the Company Information shall, be brought and enforced in the state courts of the State of Delaware located in Wilmington or (to the extent subject matter jurisdiction exists therefore) in the courts of the United States located in the District of Delaware; and the Investor and the SPV irrevocably submit to the jurisdiction of both such state and federal courts in respect of any such action or proceeding. The Investor and the SPV irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to laying the venue of any such action or proceeding in the courts of the State of Delaware located in Wilmington or in the courts of the United States located in the District of Delaware and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

9.10. **Severability.** If any provision of this Subscription Agreement is invalid or unenforceable under any applicable law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such applicable law. Any provision hereof that may be held invalid or unenforceable under any applicable law shall not affect the validity or enforceability of any other provisions hereof, and to this extent the provisions hereof shall be severable.

9.11. **Headings.** The headings in this Subscription Agreement are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof.

9.12. **General.** This Subscription Agreement shall be binding upon the Investor and the legal representatives, successors and assigns of the Investor, shall survive the admission of the Investor as a member of a SPV, and shall, if the Investor consists of more than one person, be the joint and several obligation of all such persons.

[Remainder of page intentionally left blank. Signature page follows.]

The undersigned have executed this instrument as of the date first above written.

SPV

William Shatner Documentary I, as series of Wefunder SPV, LLC
By: Wefunder Admin, LLC, its Manager

By: Founder Signature

Date:

Name: Nicholas Tommarello

Title: Chief Executive Officer

Investor

[INVESTOR NAME]

By: Investor Signature

Date:

CONTACT INFORMATION:

Name: [INVESTOR NAME]

Mailing Address:

City:

Country:

E-mail:

# TERMS APPENDIX FOR THE PURCHASE OF Legion M  
Entertainment, Inc. SECURITIES BY William Shatner  
Documentary I. A SERIES OF WEFUNDER SPV, LLC.  
A DELAWARE LIMITED LIABILITY COMPANY

**Type of Security:** Revenue Share Loan

**Terms** See Form C

To view a copy of the contract, please see **Appendix B, Investor Contracts** of the Form C. The latest Form C or C/A filing be found here:

**Attachment 5:** `LegionMLeadInvestorAgmt.pdf`

# Lead Investor Agreement

This Lead Investor Agreement (this 'Agreement') is made and entered into as of the date of electronic consent ('Effective Date') by and among the Lead Investor (as defined below), Wefunder Inc., a Delaware public benefit corporation ('Wefunder'), and the undersigned issuer ('Issuer').

WHEREAS, the lead investor identified and appointed by the Issuer on its campaign page on the Wefunder platform and approved by Wefunder (the 'Lead Investor') has been granted the power to make all voting determinations on behalf of its investors ('Investors') that hold interests in the uncertificated securities ('Securities') of one or more special purpose vehicles (each, an 'SPV') that holds uncertificated securities of the Issuer, which Securities are being or have been offered through Wefunder Portal LLC ('Portal');

NOW, THEREFORE, in consideration of the mutual promises herein made and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

## 1. Lead Investor

### 1.1 Appointment of Lead Investor

The Issuer hereby appoints the Lead Investor as the Lead Investor with respect to the SPV and Wefunder hereby approves such appointment.

### 1.2 Communication to Investors about the Lead Investor

#### 1.2.1 Initial Lead Investor

Issuer agrees to inform Investors about the identity of the Lead Investor by posting information about the Lead Investor on the Portal either prior to the filing by the Issuer and the SPV of the Form C, or after such filing but before the closing of the joint offering of securities by the Issuer and the SPV (the 'SPV Offering'). If the latter, Issuer acknowledges and agrees that the identification of the Lead Investor will require filing a material amendment to the Form C, and Investors will be required to reconfirm their commitments prior to the closing of the offering.

#### 1.2.2 Replacement Lead Investor

If a Replacement Lead Investor is appointed after the closing of the SPV Offering, Issuer agrees to issue a notice to Investors through the Portal containing information about the circumstances surrounding the replacement of the Lead Investor and details about the Replacement Lead Investor.

#### 1.2.3 Contact Information of Lead Investor

Lead Investor consents to Wefunder providing Lead Investor's contact information to Investors when deemed necessary.

### *1.3 Disclosure of Lead Investor's Role in Connection with Non-Regulation Crowdfunding Offerings*

The parties agree that the Lead Investor also may act as a portfolio manager for a special purpose vehicle advised by Wefunder Advisors, LLC that invests in Issuer in a subsequent non-Regulation CF round of financing and may receive compensation in that capacity.

### *1.4 Conflicts of Interest and Removal of Lead Investor*

*1.4.1 Removal of Lead Investor.* Wefunder may remove the Lead Investor at any time upon Wefunder's good faith determination that the Lead Investor is not in a timely manner providing voting determinations on matters as reasonably requested by Issuer, is engaging in fraudulent conduct, or has an undisclosed conflict of interest ('Cause'). Further, upon Wefunder's good faith determination that, due to other unforeseen circumstances, it may be in the best interests of the Investors to remove the Lead Investor, Wefunder may, but is not obligated to, submit such removal to a vote of the Investors and remove the Lead Investor if a majority of the Investors (calculated on the basis of ownership of Securities) who provide a voting decision within the time period prescribed by Wefunder vote in favor of removal.

*1.4.2 Lead Investor Conflict of Interest.* In the event that Wefunder determines, in good faith, that the Lead Investor has a conflict of interest only with respect to a particular matter or voting decision, Wefunder may require that the Lead Investor submit such voting decision to all Investors. In such case, the Lead Investor must give Investors five (5) calendar days (or such other time period as may be prescribed by Wefunder) to submit their voting decisions to the Lead Investor, and the Lead Investor must vote the Securities in accordance with the decision of a majority of the Investors (calculated on the basis of ownership of Securities) who provide a voting decision within such time period.

### *1.5 Replacement of Lead Investor*

In the event the Lead Investor is removed pursuant to Section 1.4.1, a new Lead Investor ('Replacement Lead Investor') shall be appointed by Issuer subject to the approval of the appointment by Wefunder, in its sole discretion, and the Replacement Lead Investor. In such event the original Lead Investor will cease to be a party to this Agreement and the Replacement Lead Investor will become a party to this Agreement.

## **2. Entire Agreement**

This document represents the entire Agreement, and supersedes any previous agreements, among the parties relating to the subject matter of this Agreement.

## **3. Partial Invalidity**

If any provisions of this Agreement are held for any reason to be unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect.

## 4. Assignment; Amendment

This Agreement may not be assigned or amended by any party without the consent of the other parties.

## 5. Term

This Agreement may be terminated by any party upon 30 days' written notice to the other parties or such shorter period as may be agreed to by the parties.

## 6. Successors

This Agreement is for the benefit of the parties and shall bind and inure to the benefit of their respective successors and permitted assigns.

## 7. Governing Law

This Agreement is governed by the laws of the State of Delaware without regard to its conflicts of laws principles.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

# **COMPANY:**

# **WEFUNDER, INC.**

By: *[SIGNATURE]*

Name: Nicholas Tommarello

Title: Chief Executive Officer

# **ISSUER:**

**[COMPANY NAME]**

By:

Name:

Title:

# **LEAD INVESTOR:**

By:

Name:

Email:

Last Revised March 26, 2022

**Attachment 6:** `LegionMTTW.pdf`

1/13/23, 8:28 PM

Legion M: The World's First Fan-Owned Entertainment Company | Wefunder, Home of the Community Round

Legion M

# What Does William Shatner Think of Legion M?

![img-0.jpeg](img-0.jpeg)

Jeff Annison

on Oct 26, 2022

Cofounder of Legion M and the Emmy winning MobiTV. Founder

*What does Bill think about Legion M? We asked him...*

## ROUND 9 IS NOW OPEN!

### So...what's it like working with Captain Kirk?

One year ago, William Shatner joined our advisory board. At the time we didn't know what to expect. Bill's a cultural icon, but what would he be like as an advisor? What's it like to work with Captain Kirk?

After 12 months of working closely with Bill on a number of projects, we've been absolutely blown away. To start with, he's a 91 year old man who works as hard (or harder) than anyone in the business. He's early for every call, and busier than he's ever been. He's sharp as a tack and one of the most "present" people we've ever met (when you are talking, he is always listening, thinking, and questioning). He's thoughtful, curious, and passionate.

Most of all, he's driven with an urgency to move forward. You might think that someone with a lifetime as rich as his would be content reflecting on the past, but Bill is relentlessly focused on the future. He's less likely to be talking about what happened 10 years ago than what could be happening 10 years from now. And he's committed to using the time he has left - every last second - to make as large an impact as possible on the world.

In the op-ed that was published shortly after we announced our agreement, Bill says:

*After returning from space, what excites me most about [Legion M] is their mission to UNITE. We live in an age when so many things are pulling us apart. Our politics, our media, and our technology are all optimized to exploit our differences. But when you look down from 300,000 feet, all that falls away. What remains is an appreciation of the word "humankind", and fierce desire to work towards a future defined by things that bring us together instead of those that tear us apart.*

Those are not empty words. We've seen firsthand the passion and energy Bill brings to the causes he cares most about.

We've got one project we've already announced with Bill (a biographical documentary that will be financed and owned by fans), and another that is gestating which we hope to be able to talk about soon. In the meantime, we're thrilled and honored to be working with someone whose passions and energies align so well with our own. We just hope we can keep up.

Onward and Upward!

-The Legion M Team

## ROUND 9 IS NOW OPEN ON STARTENGINE!

If you are considering investing you should know that startup investments like Legion M are speculative, illiquid and involve a high degree of risk. Statistically, most startups fail -- and when that happens investors can lose their entire investment. You should never invest more than you can afford to lose.

But if you can afford to risk at least $40 and want to swing for the fences, every great disruption starts with those willing to take a chance on something new. With risk comes potential for reward, and fortune favors the bold.

Read the Offering Circular (https://bit.ly/r9-oc) and risks (https://bit.ly/r9-risks) related to this offering before investing. This Reg A+ offering is made available through StartEngine Primary, LLC, member FINRA/SIPC.

Liked by Atarah Jeffers, Kevin Bowens, Andrew Bushnell, and 8 others

https://wefunder.com/updates/159021-what-does-william-shatner-think-of-legion-m

1/4

1/13/23, 8:28 PM

Legion M: The World's First Fan-Owned Entertainment Company | Wefunder, Home of the Community Round

Say something nice...

submit

Sort by popular

![img-1.jpeg](img-1.jpeg)

Brian Augenstein
Investor

Oct 26, 2022

□

Sheesh. You know, not everyone does things only for money. Sure, whether we are Celebs/CEOs or basic entry level employees we all have a different side that we show "on camera", vs. what we believe in personally. William, and many other individuals, have reached the point in life where they can do both, and not have money always be the end game goal. The rest of us just keep working toward the hope of that! Realistically speaking, William will probably never see the end financial gain of Legion M, just as Stan Lee didn't. But what Stan got to see, and what William will get to see more of, is how people in general come together to work on things that interest them as a hobby or entertainment. When you get to a point in your life where you can realize that being a part in certain things are worth more than the money it could generate, you too will realize the rest is simply irrelevant. Having never met Stan or William in real life is exactly why I can validate that the vision is there. It doesn't matter if they are famous and I'm not, (or even Vice Versa!) and money isn't the end objective here. It's to create something new that everyone will want to see, to change the status quo, and to hear those voices in the darkness previously not heard. Financial gain pails in comparison to that, especially when you have the ability to further the new creation from your already acquired historical gains and accomplishments.

3

Jeff Annison
Founder

Oct 27, 2022

□

Well said, Brian. That's one of the competitive advantages Legion M has. When we go to people like Stan and Bill that have gotten to the stage where they can do whatever they

3

https://wefunder.com/updates/159021-what-does-william-shatner-think-of-legion-m

2/4

1/13/23, 8:28 PM

Legion M: The World's First Fan-Owned Entertainment Company | Wefunder, Home of the Community Round

please, the fact that we're not a soulless corporation, but a collection of fans that have united behind a common cause, it gets us in doors that would otherwise be closed.

Wylie Mitchell

Investor

Oct 26, 2022

0 I find it hard to believe he's not being compensated. Free stock/options is still "pay" even if they're basically worthless.

Jeff Annison

Founder

Oct 26, 2022

5 The options he has received are indeed compensation, but they will only have value if the company is successful. Bill's at a point in his career where he can command a hefty cash fee to get involved with projects, but in our case he believes in the team and company and was willing to take a risk. He's in the same boat as all of us -- if Legion M succeeds we'll all win together, and if we fail we'll all lose together.

Wylie Mitchell

Investor

Oct 26, 2022

0 Shatners probably the only one making money

Jeff Annison

Founder

Oct 26, 2022

7 He hasn't been paid a cent. He's an advisor to the company, so his upside is the same as the staff and all the investors -- the value of the stock.

Matthew Levine

Investor

Oct 26, 2022

3 To make films where no films have been made before..

Christopher Palkow

Investor

Oct 27, 2022

2 Been a fan of his musical / spoken word performances and pieces for ages. His acting is pretty good too.

Mariah Lanier Maloy

Investor

Oct 26, 2022

2 I have great respect for Bill Shatner.

https://wefunder.com/updates/159021-what-does-william-shatner-think-of-legion-m

3/4

Legion M
June 30, 2022

...

Today Legion M and Exhibit A Pictures announce a new FAN-OWNED documentary directed by Alexandre O. Philippe (The People vs George Lucas, 78/52: Hitchcock's Shower Scene, Memory: The Origins of Alien), in which William Shatner takes off the countless masks he's worn throughout his storied career, to reveal the man behind one of the most recognizable faces in the world.

What what makes this documentary even more unique is the opportunity for FANS to own a part of it. The Untitled William Shatner Documentary will be financed entirely by fans, who can invest as little as $40 to own a share of the film and get a credit in the movie. These investors are not just providing the funds to produce the film - they also own a share of any revenue the movie earns.

Terms for investment have not yet been released, but you can sign-up at the link below to make a non-binding reservation and get priority access once they are.

We're thrilled to be the stewards of Bill's story, and can't wait to share more with you!

![img-2.jpeg](img-2.jpeg)

JOIN.LEGIONM.COM

http://join.legionm.com/william-shatner-documentary/

Legion M is giving fans a once-in-a-lifetime chance to own a piece of William Shatner's legacy.

5.8K

119 comments 246 shares

Like

Comment

Share

## Legion M

August 12, 2022 · 🌐

...

At this year's San Diego Comic-Con, Legion M was privileged to host our first ever panel in Hall H, before a live audience of thousands of fans. Moderated by Kevin Smith, William Shatner discussed the upcoming definitive documentary from Legion M and Exhibit A Pictures about his life and career. Click the link below to watch the highlights and learn how YOU can own a piece of the forthcoming documentary.

![img-3.jpeg](img-3.jpeg)

YOUTUBE.COM

### Shatner On Shatner - Hall H (SDCC 2022)

Highlights from Legion M's very first HALL H panel at SDCC 2022, Featuring William Shatner, ...

4.9K

60 comments 163 shares

Like

Comment

Share

![img-4.jpeg](img-4.jpeg)

![img-5.jpeg](img-5.jpeg)

## Legion M

@legionmofficial · Arts & entertainment

View shop

Legion M

★ Favorites · June 30, 2022 ·

***

Today Legion M and Exhibit A Pictures announce a new FAN-OWNED documentary directed by Alexandre O. Philippe (The People vs George Lucas, 78/52: Hitchcock's Shower Scene, Memory: The Origins of Alien), in which William Shatner takes off the countless masks he's worn throughout his storied career, to reveal the man behind one of the most recognizable faces in the world.

What what makes this documentary even more unique is the opportunity for FANS to own a part of it. The Untitled William Shatner Documentary will be financed entirely by fans, who can invest as little as $40 to own a share of the film and get a credit in the movie. These investors are not just providing the funds to produce the film - they also own a share of any revenue the movie earns.

Terms for investment have not yet been released, but you can sign-up at the link below to make a non-binding reservation and get priority access once they are.

We're thrilled to be the stewards of Bill's story, and can't wait to share more with you!

![img-6.jpeg](img-6.jpeg)

JOIN.LEGIONM.COM

http://join.legionm.com/william-shatner-documentary/

Legion M is giving fans a once-in-a-lifetime chance to own a piece ...

5.8K

119 comments · 246 shares

Like

Comment

Share

All comments ▼

Write a comment...

Kim Borush Miller

Mr. William Shatner

Will ALWAYS be

CAPTAIN JAMES TIBERIUS KIRK

I was so happy to see Mr. Shatner's reaction when he finally made it to outer space

Like Reply 23w Edited

John Erkman

Do ask him if it was necessary for Bill to become such a parody of himself please...

US most everyone wants to know!

Like Reply 28w

Todd Arron C

I want them to make a time travel star trek movie. Where they find William shatters kirk still in the nexus and he helps save the day again. And they make him Admiral again

Like Reply 28w Edited

Amber Gardner

Todd Arron C I would say that would make a good idea for a new Star Trek movie and someone would have to do it before we lose any more of the original series cast members

Like Reply 23w

Todd Arron C
Amber Gardner

![img-7.jpeg](img-7.jpeg)

Like Reply 23w

Marcus Wiggley

Todd Arron C they did on the next generation. Jean Luke. Went back in time. And saw him. It was the way the time wave

Like Reply 23w

Todd Arron C

Marcus Wiggley i know, but it could be done again. as mr spock is fond of saying. there are always possibilitys

Like Reply 23w

Marcus Wiggley

Yes, it was there are always possibilities you are correct

Like Reply 23w

David Case

Marcus Wiggley but not in the movies

Like Reply 22w

David Case

Todd Arron C Yes! Kirk still lives in the Nexus. Why wouldn't Shatner buy into the idea ?

Like Reply 22w

Curtis Cranston

Todd Arron C was that was a really bad end

Todd Arron C yes that was a really bad and unnecessary transition to the Next Gen movies.

Like Reply 18w

Reply to Todd Arron C...

Dee Anne Harper

Who he played as isn't who he is...he's a freaking actor

Like Reply 12w

Lucy Mann

He has been resilient in his life as a actor and father. And I really admire him...I read a fellow co-star induced him to Jesus...Nichelle Nichols..(LT. UHURA) and after the 2021 Space Trip he's a phenomenal and more exciting now than back-in the day. ...(STAR TREK)

Like Reply 22w

Drewbie Schaefer

Can we recreate the 2 minute "scene" between William and I, which centered on a Bellstand in a ski hotel in Colorado, 1984?

Shatner in goggles and ski hat, me in my Bell Captain clothes, commiserating over our respective hangovers?

Like Reply 18w

Melissa Anne Morse White

As an investor in Legion M, I'm doubly excited about this!

Like Reply 28w

Tobias L

Melissa Anne Morse White I'm jealous, I wish I could!

Like Reply 24w

Karen Engstrom Myers

Melissa Anne Morse White Same here. I have been a fan since watching the original Star Trek way back when.

Like Reply 13w

Reply to Melissa Anne Morse Wh...

Greg Holsclaw

I will never forget when i saw you on thr Twilight Zone for the first time. I knew you were going places and places you went.

Like Reply 23w

Mark Newitt

I just finished watching an episode of Murdoch Mysteries, which William Shatner played Mark Twain. Great episode. I'm glad he will be attending this year's Comic Con.

Like Reply 28w

Daniel Schneider

They should find a way to have the Good Captain in the New Star Trek Movie currently in Prep as they did with Spock! I

Like Reply 12w

Jim Noll

Thx bill for sharing your lifelong talent= it's appreciated !!!!!!!!!!!!!!!!!!!!!

Like Reply 21w

Mary Miron

Was in love with captain Kirk when I was 12 yrs old and even now 70 yrs old

Like Reply 22w

Jeannette Fournier

Mary Miron me too

Like Reply 22w

Reply to Mary Miron...

Carol Ann Sustad-Renz
Great, we need more like him

Like Reply 23w

Daniel T. Lappen
The Shat is where it's at.

Like Reply 19w

Mark Pappas
He's the real shady

![img-8.jpeg](img-8.jpeg)

Like Reply 21w

Toby Boyd
I had the pleasure of meeting him 3x at Cons!

Like Reply 21w

Shawnda Jones
Great legacy actor and director author great weekend

Like Reply 23w

Paul Cappelloni
What a long, long Trek it's been

Like Reply 22w

Morgan McConnell
I am signing up!

Like Reply 28w

Curtis Frank Ingram Jr.
I saw Shatner in a 1957 Alfred Hitchcock Presents
episode a couple of days ago. Incredible that he is still
going strong 65 years later.

Like Reply 16w

Tobias L
This was great!!

Like Reply 24w

Jay Potter
Captain James Tiberius Kirk

Like Reply 22w

Jeremy McCurdy
I would like to know more about this

Like Reply 28w

Author
Legion M

Jeremy McCurdy Here is the link for more info!
http://join.legionm.com/william-shatner-documentary/

![img-9.jpeg](img-9.jpeg)

JOIN.LEGIONM.COM

Crowdfunded William Shatner
Doc to Be Owned by Fans

Like Reply 28w

Jubal Johnson
His life...the Unexplained

Like Reply 18w

Paul Gyurcsanszky
Liked him in Star Trek he fit the role very well

Like Reply 11w

**Kevin Fritz**

Is Legion M putting money into this? If so, as a share holder, am I not already investing in this?

Like Reply 28w

Author

**Legion M**

**Kevin Fritz** As an investor in Legion M, you already have a stake in all our projects (including this one). That said, your investment return for Legion M is tied to the long-term success of the company rather than any individual project. Which is why a lot of people have asked us over the years if there is a way to invest directly in our projects.

So for the first time - for those that are interested - people will have the opportunity to invest in this project to not only receive a credit in the film, but have any potential returns tied directly (and solely) to revenues generated by this film.

Like Reply 28w

**William Oberlander**

Amazing and we are Facebook friends. We wished each. Other Happy Hanukkah 😊 and Merry Christmas! Such a Great man. I've read almost all his books think he's amazing.

Like Reply 22w

**Larry Seffens**

A great!

Like Reply 10w

**David Patrick Black**

Has the film been shot yet? If not, is there insurance on Shatner completing the job?

Like Reply 19w

**Bill Williams**

I really enjoyed his show

Like Reply 19w

**Tom Rombouts**

I saw every episode of TOS in afternoon reruns when I was in high school, I read his Star Trek Memories book, and have read and heard him discussed many times over the years. The only thing I do not like about him (seriously) is that apparently he did not want to be a guest star on 'The Simpsons'. (I do not believe he was hard to work with, I do not think he is more egotistical than most performers, and I enjoy his various musical recordings.)

Like Reply 16w

**John Lantier**

Bless ya Bill!

Like Reply 23w

**William Oberlander**

I was Very Surprised 😱 that ❤️ Bill. - William Shatner ❤️ even knew who I was my cellphone Broke. 3 Years ago. When I lost that old Broken phone! I lost many Facebook friends William Shatner. Was 1 of them. I guess he liked my General replies and how I'm Jewish 😊 and Christian 😊 at the same Time. I also told him I'm always a Fan and I Loved him as God. Does no matter what. And he changed my life! There isn't hatred! Only understanding. Even when another person tried to kill me. Hey what's your problem! The police Are Here!

Like Reply 21w

**Patricia Schwarz**

Very awesome 👍 indeed

**Time limit hit – remaining pages or documents were skipped.**

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Name of Issuer:** Legion M Entertainment, Inc.

**Legal Status:** Corporation

**Jurisdiction of Incorporation/Organization:** DE

**Date of Organization:** 03-04-2016

**Physical Address:** 1801 CENTURY PARK EAST 24TH FLOOR, LOS ANGELES, CA, 90067

**Issuer Website:** www.legionm.com

**Is there a Co-Issuer?:** Yes

**Intermediary Name:** Wefunder Portal LLC

**Intermediary CIK:** 0001670254

**Intermediary File Number:** 007-00033

**Intermediary CRD Number:** 283503

### Offering Information

**Compensation to Intermediary:** 7.5% of the offering amount and reimbursement for out-of- pocket third party expenses

**Financial Interest in Issuer:** No

**Type of Security Offered:** Other

**Other Description of Security:** Revenue Shares

**Number of Securities Offered:** 5000

**Price per Security:** $1.00

**Target Offering Amount:** $50,000.00

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** Other

**Description of Oversubscription:** At the discretion of the company.

**Maximum Offering Amount:** $650,000.00

**Deadline to Reach Target Amount:** 04-30-2023

### Annual Report Disclosure Requirements

**Current Number of Employees:** 18.00

**Total Assets (Most Recent Fiscal Year):** $2,629,095.00

**Total Assets (Prior Fiscal Year):** $1,381,289.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $1,227,661.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $158,871.00

**Accounts Receivable (Most Recent Fiscal Year):** $30,817.00

**Accounts Receivable (Prior Fiscal Year):** $9,922.00

**Short-Term Debt (Most Recent Fiscal Year):** $830,956.00

**Short-Term Debt (Prior Fiscal Year):** $449,951.00

**Long-Term Debt (Most Recent Fiscal Year):** $48,200.00

**Long-Term Debt (Prior Fiscal Year):** $0.00

**Revenues/Sales (Most Recent Fiscal Year):** $1,062,732.00

**Revenues/Sales (Prior Fiscal Year):** $933,570.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $3,429,046.00

**Cost of Goods Sold (Prior Fiscal Year):** $2,319,404.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-2,939,564.00

**Net Income (Prior Fiscal Year):** $-2,225,398.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, PR, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING

### Signatures

**Issuer:** Legion M Entertainment, Inc.

**Signature:** Paul Scanlan

**Title:** Chief Financial Officer and Treasurer

---

**Signature:** Paul Scanlan

**Title:** Chief Financial Officer and Treasurer

**Date:** 01-26-2023

---

**Signature:** Jeff Annison

**Title:** President and Director

**Date:** 01-26-2023

---

**Signature:** Terri Lubaroff

**Title:** Director

**Date:** 01-26-2023