"Lay in a course for the future.”

axamonitor

Axanar-Donor-Memo-08-Mar-17

"Lay in a course for the future.

The future of AXANAR

As you probably know, under the terms of our legal settlement, we can not make

the full-length AXANAR feature film we had originally intended to make. That

doesn’t mean we can’t tell the story of Garth of Izar, his relationship with Kharn

the Undying and their ultimate conflict at Axanar, however.

We have just started our pre-production on the two 15-minute films we are

allowed to produce under the settlement agreement. These will be presented as

Episodes Four and Five of The Four Years War Documentary, picking up where

Episode Three, “Prelude to Axanar left off and tell the story of the Battle of

Axanar and the peace that followed. But that is not the whole Axanar story.

Plans are now underway to create a multi-media telling of this epic Star Trek

story. PROJECT: AXANAR will be a complete, trans-media production, produced

in a variety of forms including the two 15-minute films, an audio drama of the full

script, a complete illustrated script with production art, story boards and graphics

and written fiction to fill in the gaps in this amazing story.

Some pieces of those others projects will be given to existing donors as a “thank

you gift for your patience and support. But other pieces will need to be funded

and you’ll be invited to help.

Keep in mind that even with the funds raised for the AXANAR feature to-date, we

were still going to have to ask for more support to finish the remaining parts of

Axanar.

The future of fan films at Axanar Productions

We intend to continue making fan productions at Axanar Productions. Every one

of the projects that might be considered a Star Trek fan film will comply with the


guidelines set forth by CBS.

But we’ve set our sights even higher than that.

Fan projects produced by Axanar Productions will be made under the banner of

The Federation Historical Society and will be an entirely volunteer effort. We also

plan on getting more fans involved in the creative process in a way that will truly

engage people in celebrating their affection for Star Trek and other fan-favorite

franchises down the road.

Building the first Fan-Funded Movie Studio

Building on our experiences to-date, advice from our friends in the industry and

encouragement of fans and backers, Axanar Productions will be expanding its

mission from just making the AXANAR feature film into becoming a non-profit film

production studio - making our own projects and assisting other independent, fan

and student film makers in bringing their projects to the screen.

It is our desire to provide low-cost production services to other filmmakers like us;

helping them to get their projects off the ground and into the hands of consumers

looking for fresh, high-quality entertainment in the sci-fi, horror and fantasy

genres.

Axanar Productions will operate as a non-profit and is working on filing its

501(c)(3) paperwork so we’ll be a tax-exempt, charitable organization as well.

We feel our focus on providing low-cost services to a broad, artistic community

is a noble and worthy cause.

And just wait until we start announcing some of our planned activities and

partnerships to support that mission. I think you’ll be impressed.


The future of Industry Studios

Thanks to these support of our donors, we now have an awesome soundstage

facility called Industry Studios. Originally planned to be used for the production of

the AXANAR feature film, Industry Studios is now attracting the interest of

commercial and independent filmmakers. Our plan is to use the revenue

generated by renting our facility too help subsidize the cost of making that same

facility available to independent, fan and student producers.

To help further that mission, we’ll be launching a crowdfunding campaign on

Wednesday, March 8th to raise funds to cover the hard costs of the soundstage:

rent, insurance, utilities and storage (about $15-18k/month). The more we raise,

the less we’ll have to rely on commercial rents to help us advance our mission.

Stay tuned for your invitation to support Industry Studios and help Axanar

Productions truly realize its vision of the future.


Axanar Productions Financials

Now that the lawsuit is behind us and we’re preparing to make way with a new

mission for Axanar Productions, it’s important we take a moment to thank you for

your continued support and give you a glimpse of everything we’ve been able to

do with your trust and your donations.

Attached you’ll find a financial disclosure that breaks down how donor dollars

were spent to get us this far. Donor funds provided nearly 85% of the money we

needed to deliver PRELUDE TO AXANAR, build out the Industry Studios

Soundstage and bring us to within weeks of shooting the first 30-40% of the

AXANAR feature film. The lawsuit with CBS and Paramount set us back by

nearly a year and cost us dearly in both cash and opportunity, but thanks to your

support and encouragement, we’ve persevered and are now proceeding with

AXANAR as a trans-media project that will include two, fifteen-minute fan films as

well as other productions that will help us tell the entire story of Garth, Kharn and

the Battle of Axanar in a new and exciting way.

Also attached is a letter from our Independent Financial Review Committee - a

group of Axanar Productions Donors (like you) who have experience in the film

production and entertainment business - who were tasked with the responsibility

of reviewing every single expense for the past 3 years to make sure they were

appropriate business expenses. Their evaluation, as detailed in the letter, is that

our finances for retrofitting the Industry Studios space, shooting PRELUDE and

the Vulcan scene, pre-producing AXANAR, fulfilling our donor obligations and

promoting our productions were all within acceptable margins for the industry

Please note that while the total expenses for the past 3 years totaled nearly $1.7

million, donations covered $1.4 million. The difference was covered personally

by me and through other funding sources who provided their support and have

requested (and in one case required) anonymity as a condition of that support.


It should be noted that no donor money went to myself in either salary or

expense reimbursement. Legitimate business expenses like insurance, meals,

travel, auto reimbursement and salary, were all paid for by myself and the others

who donated their support and made up the almost $ 300,000 in additional

expenses covered beyond what donors paid for.

I am grateful for their support as I am for yours and I think you’ll agree with them

that it’s time to focus on the future and move on.

Thanks again for your continued support and encouragement,

Alec Peters


Independent Financial Review Committee

Kevin Rubio / Acting Chairperson

To Whom it May Concern

This letter is to acknowledge that between the periods of December 10, 2016 and January 10, 2017, I

(Kevin Rubio) was asked, and did accept, to serve as part of a three-person independent financial review

board, consisting of myself, Cedric Yau and David Bailey, for the purpose of reviewing the financial

statements of Axanar Productions ( a donor-funded independent film project) for the calendar years:

2014, 2015, and 2016.

In the interest of full disclosure, while I have no direct involvement in the production, I am a close

personal friend of the film’s attached director (Robert Meyer Burnett), and I have donated a sum total of $

25.00 (twenty five dollars and zero cents) to the proposed but as yet uncompleted Axanar film project. I

was also a guest and observer on the set in the summer of 2015 for what is known as “The Vulcan

Scene. In addition, it should be noted that the committee member Cedric Yau is a major financial backer

of the Axanar independent film project, and that David Bing Bailey has worked as Axanar’s Digital Ingest

Technician and colorist on both “Prelude to Axanar and “the Vulcan Scene, besides being a director and

editor in his own right, having produced two feature films.

Axanar Productions provided each member of the financial review committee a series of documents that

included: 1) A “Top Sheet of donor money “IN and “OUT of the production from 2014-2016, 2) A “Line

Item budget from 2014-2016, 3) A “Top Sheet budget detailing set construction from 2014-2016, 4) A

“Top Sheet budget detailing studio “build outs from 2014-2016 and 5) A confidential NDA non-disclosure

agreement) which I signed.

After independent and committee review, we the undersigned, given our professional combined

experience of over forty years in the fields of finance, producing media across multiple platforms, and

physical production, can and do attest that the numbers presented to us by Axanar Productions,

accurately reflect, within an acceptable margin, the cost of what it would take to: 1) Lease and retrofit a

building to make a viable sound stage, 2) Mount a production (pre-prod and one day of shooting) up to

the point at which the production of the Axanar production was halted, 3) Donor fulfillment cost as of 2016

including items and postage, 4) Promotions.

Kevin Rubio

Cedric Yau

David Bailey


Axanar Productions Financial Disclosure

Use of Donor Funds for PRELUDE TO AXANAR and AXANAR

Note: Costs include the build-up and rental of the Industry Studios soundstage

Amount

% of Funds Raised

Money Raised from Donors (Income):

PRELUDE TO AXANAR Kickstarter Campaign $ 113,833 7.95%

AXANAR Production Crowdfunding Campaigns 1,234,400 86.17%

Online Transactions (supplemental donations) 84,357 5.89%

TOTAL $ 1,432,590

Use of Donor-raised Funds (Expenses):

Operational Expenses:

Donor Relations (perk fufillment and related costs) $ 153,148 10.69%

Bank and Credit Card Processing Fees 5,349 0.37%

Computers, Office and Marketing Supplies 33,249 2.32%

Legal Expenses (not related to lawsuit) 5,377 0.38%

Soundstage-related Expenses:

24 mos - Facility Rental (Industry Studios Location and storage) 313,594 21.89%

Facitiies Overhead (Utilities, Insurance and Maintenance) 56,269 3.93%

Soundstage/Studio Build-Out 289,083 20.18%

Production-Specific Expenses:

PRELUDE TO AXANAR Production Costs 117,294 8.19%

AXANAR Set Construction Costs 197,717 13.80%

AXANAR Pre-Production Costs (Prod. Design, Music, VFX, Props, Costume WIP) 261,509 18.25%

TOTAL $ 1,432,590 100.00%

BALANCE $ -

Additional Operational, Soundstage and Production Expenses:

Additional facilities rent and business operations expenses (including cost of funds) 87,521

Additional soundstage-related expenses 48,252

Additional pre-production costs associated with AXANAR feature 127,771

TOTAL $ 263,544

TOTAL EXPENSES 1,696,134