Letter to Shareholders

Filtering, Legal Battle, Platform Support, Press, tagging, Technology, VidAngel Studios

May 5, 2020

 

Friends of VidAngel,

VidAngel exists to help you make entertainment good for your home. 

What is good for each of our homes is a personal choice. We’ve long known the motto “Be our guest.” At VidAngel, we believe “We’re your guest.” 

After all, it’s your home.

You choose how to watch. In 2013, we started developing software that was essentially a pre-programmed streaming remote. We have now gone through 6 successive attempts to build your skipping software. In each iteration, we hit a wall. We were sued over iteration number four, struggled through bankruptcy, and today Disney continues to oppose iteration number 6. We’re continuing to push through that for you, and in the meantime, we’re providing access to arguably the most exciting content of the COVID-19 era, produced by Netflix, Amazon and other streaming services. Watch however the BLEEP you want.

You choose what we make. In 2017, armed with the data around the skip choices families are making, we launched Dry Bar Comedy. Over 300 comedians have now performed, fine-tuning their sets to the audience and receiving  bonuses for better serving you. Additionally, with the help of 19,000 of you, we funded, produced, and distributed the award-winning dramatic series The Chosen. 

And you have responded. In April 2020, our business generated 5X the revenue of our skipping software pre-injunction. Dry Bar has over 2 billion views. The Chosen is offered globally, in dozens of languages, has tens of millions of views, and millions of dollars in revenue via its own app. It has been the #1 series on VidAngel for months. 

We hear you. 

Five. Times. Revenue.

 

So what’s next?

After emerging from bankruptcy (we hope during the June 18, 2020 confirmation hearing), we plan to raise up to $50 million to grow VidAngel. 

Our goal with these funds will be:

  1. Give our loyal investors, without whom we would not exist today, a chance to liquidate some of their shares (some people may need cash due to COVID-19 and won’t be able to wait for a potentially larger return). 
  2. Back many more creator projects, like The Chosen and Dry Bar Comedy, by building creator tools for:
    • – daily financial reporting and monthly payments (currently quarterly)
    • – better audience interaction (e.g. live streams, merchandise, uploads, notifications)
    • – creator cross-promotion (i.e. a simple way for The Chosen and Dry Bar to promote new creators’ projects with their massive audiences)
  3. Build better control over more content, allowing you, for example, to:
    • – find the very best content to watch or the best future content to back (rather than the primary focus being on skipping objectionable content)
    • – say exactly what kids are allowed to browse (specific list of approved titles with pre-set skips)
    • – watch with skips without having to wait for us to tag it (say hello to SkipBot and community made skips)

Thank you for trusting VidAngel as a guest in your home. We aim to build an entertainment company that centers around your kingdom, not ours. The best days are yet ahead.

 

Onward,

Neal Harmon

Co-founder and CEO

 

Click here for VidAngel’s SEC Reports

An important call for hope. Please send your stories.

Parents, VidAngel Studios

Hello friends,

I’ve been feeling like I should share a little book that our family made to remember digging out of the 2008 market crash. As I thought this week about the tough times we’re in, and what potentially lies ahead, I recorded a quick video I would love you to check out.

I also invite you to share your own story with others to help others get through the difficult times.

If you have a story that would be a fit for our #NeverFailed series, please make a quick video and submit it here. The proceeds raised from your submission can be donated to the charity of your choice.

Thank you so much for your support.

Sincerely,

Neal Harmon
Co-Founder and CEO

No Joke: Two Exciting Announcements

Parents, Press, VidAngel Studios

Hi VidAngel Fans,

We know these past few weeks haven’t been easy. People all over the world are struggling under the weight of health concerns, changing work situations, helping their children with their education, and trying to find peace in this challenging time.

We want to help how we can, so I have two announcements I’m really excited about:

First, I’m happy to announce that VidAngel will continue to be free for the entire month of April. No credit card required, all we ask is that you agree to practice social distancing (and to give bigger hugs when all this is over).

Second, we’ve just launched a brand new show I think you’re going to love. The Riot and the Dance: Water is an absolutely gorgeous nature documentary that shows the beautiful and miraculous aspects of aquatic wildlife from a faith perspective. When I watched this show with my family, it had all of us in awe, from my seventeen-year-old down to my two-year-old.

We hope you’ll enjoy this free month of filtering with VidAngel. If you are in need of a laugh, I highly recommend our Dry Bar Comedy specials. If you could use a spiritual boost, I hope you’ll consider our fantastic original series, The Chosen. If you could use something educational for your kids while school is out, we think you’ll really enjoy Chasing American Legends and Beyond the Stars.

If you could use a little of all these things, you will love The Riot and the Dance: Water.

Thank you for enjoying VidAngel in your homes.

 

Sincerely,

Neal Harmon

Co-Founder & CEO

 

GET FREE VIDANGEL

#GenerosityChallenge Increases Our Growth Rate by 50x

Parents, Press

While the government debates over how to solve the medical and economic implications of what’s currently happening to our country, we at VidAngel instituted a company-wide work from home program last week, and Monday morning we invited our customers to help.

 

In exchange for an agreement to practice social distancing (and give bigger hugs when this is all over), we are providing access to our entire offering for free, without a credit card. It was the least we could do to help families out. 

 

It makes me uncomfortable to share these numbers, and I don’t want it to come across as bragging or taking advantage of this situation, but I am sharing these hoping other entrepreneurs are inspired to speed to a solution faster. Here’s the initial two day numbers:

 

 

Obviously, we’re just a few companies. Our impact today is small, but the percentage response rate is HUGE. And those who are doing this realize now that this is a mutually beneficial proposition. We’re helping people out and they’re helping us grow. That’s the way American entrepreneurship should work.

 

People are anxious. People are scared. The economy is tanking before our eyes. 

 

Social distancing is a scary prospect when people are worried about their jobs. Aside from health, fear in general is high across the country. People are worried about family members, income, and how to cope with kids being at home instead of in school. We have an opportunity to quell public concerns and replace fear with hope. 

 

If enough of us collaborate together, at a faster rate than any governmental consensus can be reached, we can stave off the spread of disease, help calm the anxiety of those in need, and hopefully, prevent the debacle of our economic system.

 

With Forbes and the #GenerosityChallenge, we invite other companies to figure out how to help those stuck in their homes and beat COVID-19 the American way, through economic ingenuity. Linda.com, MasterClass, big streaming companies, and others, who will help conquer this? The mutual benefit is real, please help us scale this idea to as many web businesses as possible.

VidAngel Trustee Files Reorganization Plan with Bankruptcy Court

Legal Battle

Company Submits Plan to Meet All Financial Obligations and Move Forward from Lawsuit as Vibrant and Growing Business

 

(Los Angeles, CA—March 5, 2020) VidAngel is announcing today that due to rapid
growth over the last year, its Trustee has filed a plan of reorganization which outlines a
strategy for the company to move out of bankruptcy. The company’s operating results,
as reflected by monthly filings over the past months and last year, reflect growth in
gross revenues, emerging success of new lines of business and the stability of the
company’s core business.

 

VidAngel, Inc. Trustee, George Hofmann, has issued the following statement:

“Bankruptcy law was established by Congress to give companies a chance to rehabilitate, get back on their feet, pay their creditors, and continue to move forward.
VidAngel has a reorganization plan that does just that. After entry of an adverse judgment in an amount that, initially, seemed insurmountable, the company’s business and revenues are growing, and the company is expanding into new lines of business. According to third party financial experts hired to advise me in the reorganization process, VidAngel’s robust growth makes paying the judgment in full feasible. I look
forward to the court confirming a plan so that VidAngel can emerge from bankruptcy, pay its debts and focus on growing a great business.”

 

VidAngel, Inc. CEO Neal Harmon has issued the following statement:

“We would not be in this position today were it not for the support and loyalty of our customers, investors, and the resilient VidAngel team. We’ve gone from avoiding threats of a shutdown to being able to say, ‘just send us the bill’. VidAngel is turning a page in its history, and we believe that we now are moving forward stronger than we’ve ever been. VidAngel remains committed to helping you, the viewer, make entertainment good for your home.”

 

Reorganization Filing Facts

● In light of financial results reflecting VidAngel’s business growth and future
potential, VidAngel’s Trustee has decided to file a reorganization plan to pay the
adverse judgment in full.

● Third party experts have determined, given VidAngel’s financial results to date
and the anticipated stability and growth of its current lines of business, that it is
feasible to pay off the adverse judgment over a 14-year plan.

● Under the proposed plan, VidAngel’s appeal of the California court’s judgment
will continue, the shares of its investors will be preserved and VidAngel’s
management and board will control the company moving forward.

● The plan confirmation process is anticipated to take a minimum of 60 days.

 

What this means for VidAngel

Should the judge confirm the reorganization plan, VidAngel is moving out of bankruptcy and on from the lawsuit as a healthy company with exciting growth. 

 

What this means for the $62.4 Million Judgment 

This reorganization also means that we get to appeal both the summary judgment ruling and the $62.4 million judgment, and feel we have a strong case. But in the event that our appeal fails, the $62.4 million judgment is not a death sentence. Third party experts have opined that VidAngel can pay off the judgment over a 14 year period. That’s an unbiased third party who has looked at our financials and growth prospects and is saying that VidAngel can pay this off. All $62 million.

 

What this means for VidAngel Investors

We are especially happy to inform our investors that, if the Trustee’s plan is confirmed by the Bankruptcy Court, VidAngel investors will retain their equity in the company and have the opportunity to share the benefits of future success.

 

We would not be in this position today were it not for the support and loyalty of our customers, investors, and the resilient VidAngel team. We’ve gone from avoiding threats of a shut down to being able to say, ‘just send us the bill.’ 

VidAngel is turning a page in its history, and we believe that we now are moving forward stronger than we’ve ever been. VidAngel remains committed to helping you, the viewer, make entertainment good for your home.

Thank you. We are so excited for the days ahead.