Film Regions International, Inc. (FRI)

02/09/2025

Blythe retained as CEO; Board exploring alternate options
> Budget and production paring to continue into 2025

(Los Angeles, CA) At its first-of-year Board of Directors meeting on January 30th, discussion centered around the status of the production company and the fiscal problems it encountered during the prior year.

“Profitability and debt reduction both have to be a priority this year” commented FRI board member Ron Puleio. For the year 2025, the Board adopted a very pared down annual operating budget and business plan with a focus on continuing to scale back production expenditure except for films that have made substantial progress, more scrutiny on contracts that will benefit the company financially and adding a capital outlay for cash a hopeful infusion from shareholders that the Board believes will enhance its bottom line to increase profitability and reduce film investment debt. “These items were spotlighted as being recommended by FRI’s financial advisers”.

John Blythe, chief executive officer of the company, was also in the spotlight, as his three-year contract as CEO was up for consideration for renewal. Despite a year of financial troubles which was discussed at length and some scrutiny over Blythe’s tenure thus far, the Board voted to retain him as CEO however with stipulations that FRI begin looking at a potential management partnership or power sharing arrangement with another film company that may have greater resources to bring to the table. “When that time comes, the Board will decide and make a vote on it, but for now, we still need a head of the company” Puleio said.

During its annual organizational part of the board meeting, Blythe and Myron Ward were re-elected to continue serving as co-chairman of the board; with Ward also serving as board secretary, however with new board members now also seated, one may be appointed to serve as board treasurer to provide better oversight over the company’s finances.

Other items addressed included FRI’s accountant Debbie Stonebarger preparing the 2024 audit and tax filing which confirmed FRI's net loss for 2024 of about $56,000; and reviewing FRI’s distribution contract with Buffalo 8.

01/29/2025

Film Regions Int’l reports net loss for 2024 at Annual Shareholders Meeting
> Board elected; exploring options

(LOS ANGELES, CA; January 28th, 2025): Film Regions International, Inc. (FRI) after facing a rollercoaster of a year, announced it had reported a net loss of just over $50,000 at its annual shareholders meeting held on January 19th.

Co-Chairman/Chief Executive Officer John Blythe however, stated in his annual report that the net loss reflected at the end of 2024 was substantially much less than what FRI’s consultants and financial advisers had anticipated. “Their projections stated that FRI was likely to loose more than five times than what was reported, and we feel the loss for 2024 was less mainly due to the turnaround plan we adopted, and the contract cuts and reduction in film production costs that was put in place since mid-summer.”

Blythe however, seemed sensitive to the issues at hand. “As a film company, or in our case, an indie film company, our product is production and distribution, and so obviously we’re sensitive by the fact that we’ve had to say “no” to independent filmmakers this year that we’re passing on this project or that project, simply because of the financial crisis we’ve been in.”

In moving forward for 2025, Blythe and Co-Chairman Myron Ward are remaining optimistic about implementing changes more aggressively. “Phase II was the turnaround plan, making these painful decisions; now Phase III will depend on hopefully asking the shareholders and/or our debt holders or outside investors for contributing a cash infusion outlay and earmark this for a list of recommendations that our consultants have advised.” Over the past few years, Blythe and Ward admit that this has been a difficult sell to its shareholders and debt holders, let alone finding new investors. “If Plan A fails, Plan B will be exploring an alternate option, possibly a management partnership arrangement with another company to help reshape our finances and offer some stability.”

In other business of the shareholders meeting, incumbent board members Blythe and Ward and Ronald Puleio and Michael Russo were all re-elected for another two year term.

01/02/2025

12/24/2024

We want to wish all of our friends and colleagues in the motion picture industry a very warm and most joyful holiday season! Merry Christmas!

12/23/2024

Filmmakers’ contracts and capital plan addressed at end of year FRI board meeting
> Board votes to not declare dividends ahead of annual shareholder meeting

(Los Angeles, CA) It was a very heavy agenda for the end of year Board of Directors meeting of Film Regions International, Inc. (FRI) on December 18th.

John Blythe, president of the company, briefly recapped the challenges of 2024 focusing on four major financial “headaches”. Over budget issues on film productions was number one on that list. Diminishing revenues due to extensive cost recoupments, ineffective monetization of filmed entertainment assets and underutilized joint ventures “just about ruined cash flow”; reduction in incentives and economic stagnation/decline of the film industry in California and the failed distribution/aggregation contracts with Buffalo 8, Gravitas Entertainment, among others resulted in “a real tragic year” Blythe said. According to the administration, some of these distributors still owe FRI a “great deal of money”.

Blythe commended the board, personnel and its retained consultants for meeting the challenges and helping put together the turnaround business plan in place for recovery.

Due to the financial challenges this year, the Board voted unanimously to not declare any shareholder dividends, ahead of the company's annual shareholders meeting which is usually held every January.

Earlier in the meeting, Blythe brought to the Board’s attention inquiries from a few of its filmmaker clients. Amanda Iswan, director of the Indonesian foreign language horror film “Zeta” which FRI licensed through its worldwide distribution contract with Buffalo 8, asked that her contract be rescinded over “reporting concerns”. Blythe indicated that Buffalo 8’s prints & advertising (P&A) costs had not fully been recouped which has been one of the challenges FRI has been navigating through. Board member Ron Puleio asked how much money needed to be recouped by Buffalo 8 before the film started to report in the black, Blythe estimated that it was not a significant amount but admits sometimes the exact figures are “hard to pinpoint”. In a previous meeting, Blythe had been advised by FRI’s consultants to try and renegotiate these contracts, but was unsuccessful, therefore it was recommended Buffalo 8 push a marketing campaign in October for the Halloween season, particularly since “Zeta” for example being a horror film, may have a better chance through VOD sales. Blythe indicated that those figures would not show up for the 4th quarter of fiscal year 2024 until the end of January however, and stated that if the film does not begin to turn around financially, the contract can be placed on a future agenda for board consideration to take action.

In another written inquiry, some of FRI’s debt holders have expressed concern about its growing film investment debts and whether the distribution contracts are meeting recoupment of these film’s negative costs. FRI co-chairman Myron Ward brought to the attention of the company’s balance sheet and wondered if better utilization of Film Hub has an alternative would be easier for reducing filmed entertainment asset depreciation instead of direct distribution contracts. Blythe mentioned that all options should be put on the table and that the company needs to take better care of getting these debts paid through the best possible distribution method and these options have also been advised by consultants.

Ward and Blythe agree that some of the quarterly and yearly reporting of its distribution contracts is concerning and whether FRI can continue sustaining it long-term. Blythe used FRI’s contract with IFC Films as a hypothetical example, “IFC pays FRI a fair amount of what we bring in as filmed entertainment revenue. The problem is, once all of the other third party contracts are paid their portion of that revenue from IFC, FRI is left with a fraction of what is left over.”

As Blythe puts it, when it comes to film distribution, it becomes a catch 22 situation. On the one hand, a direct distribution contract in some cases pays a minimum guarantee to the company and distributes the film out into various markets with its own massive P&A campaign, however those are recoupable costs and they take distribution fees. On the other hand, with an aggregation service provider such as Film Hub, FRI could directly distribute its film through an 80% revenue share, with 20% paid to Film Hub, however FRI would need to come up with its own in-house P&A costs.

Veeresh Devireddy, business advisor with SCORE also presented to the Board a list of three areas that he felt FRI should focus immediate priority on within its current turnaround business plan – first, recruiting a VOD specialist to negotiate and execute these distribution deals. Deivreddy also stated that with Film Hub, advertising-VOD and streaming-VOD had a 550% growth rate over transactional-VOD. Devireddy also recommended exploring effective partnerships/management agreements and establishing co-productions as an alternative for FRI to receive additional producer fees and reduce in-house film investment debt. Board member Stephen Wu agreed that these were good initiatives, but had concerns with exactly how co-productions would work, “whether FRI would have to solicit these future projects on its own acting as a minority producing entity.” Blythe agreed to look into more specifics but that FRI needed to start addressing these priorities seriously and with more urgency. “We definitely need shareholder or outside support at this point.”

Blythe stated that these three priorities would be adopted as a specific capital plan proposal and presented in the company’s 2025 budget. He is hopeful to get some kind of support from FRI’s shareholders at its upcoming annual meeting next month and for a motion to consider.

11/23/2024

FRI continues implementing turnaround plan, may explore alternatives into 2025
> Net profit reported for third quarter, despite financial challenges all year.

(Los Angeles, CA) A soothing note was reported at the quarterly board of directors meeting of Film Regions International, Inc. (FRI) on November 13th which despite major financial challenges, a debt default and net losses for the past two quarters of 2024, the indie company reported a profit of $1320, though unfortunately a very slim profit compared to prior fiscal years and based on the underperformance for filmed entertainment revenues. “Encouraging yes, but take it with a grain of salt, we still have a lot of work to do to turn things around” said John Blythe, chief executive officer of the company.

Although the company has had struggling cash flow problems this year, a bit of positive news was discussed as FRI’s turnaround plan has been taking a more aggressive look by hopefully implementing items that its new advisor with SCORE, Veeresh Devriddey has recommended. “FRI needs to focus on working capital, even if it is just in incremental phases. It needs to focus on recruiting a VOD specialist to better monetize and grow its assets already in the distribution marketplace, explore the potential of establishing a productive management/partnership venture and focus on associated productions rather than full in-house, to reduce cost, share responsibility and earn production fees. These are all strategies to maximize shareholder return on investment” said Devirddey. Blythe said that depending on how its turnaround plan continues to be executed, these items could very well be implemented as part of its plans that can be approved into 2025. “We’ll certainly cross this bridge when we get there, but we need to keep options on the table.”

During the board meeting, there also seemed to finally be consensus regarding FRI’s corporation status which has been a lingering discussion not just with the board, but also with the company’s shareholders for the past three years. Newly appointed FRI board member Raaj Rahhi, who recently met with Blythe in New York City, but provided feedback during this meeting while on travels in Dubai, indicated that it may be beneficial for FRI to keep its S corporation status rather than convert to a C corporation, due to the double taxation issue. Instead, Raahi recommended looking at a limited liability company purchasing FRI’s available shares with the exclusive intention on providing working capital and financing to FRI under its corporate umbrella as this option already exists in its strategic plan. The LLC would enable FRI to obtain working capital and have one of its managing members also serve on the board for FRI. Fellow FRI board members Ron Puleio and Michael Russo concurred that this could be an option and investigate the particulars on how to operate it efficiently, “but we still need to work on getting the company’s finances and profitability stabilized” Puleio said.

The subject of profitability is at the top of the list for Blythe and despite the third quarter earnings, “with all of the challenges we’ve faced, those earnings will likely be wiped out by the end of the year” he said. Blythe reported that its filmed entertainment assets have been dwindling with its contracts with IFC and model challenges with Amazon Prime. It’s new films in the marketplace will still take some time to realize monetization. Another topic on the list related to profitability, has been FRI’s aggregation distribution contract with Buffalo 8 as it has been handling several of its foreign films worldwide; and the films financial performance has been “disappointing to our filmmaker clients” Blythe reported. “If we cannot see some kind of recoupment and turnaround after the new year, the board may take action about cancelling this contract should be unable to reach a satisfactory arrangement after all this time.”

FRI will be having another board meeting in December before the end of the year.

10/17/2024

Film Regions International (FRI) CEO John Blythe with fellow FRI board members Raaj Raahi, Ron Puleio and Michael Russo during business trip in New York City today!

09/30/2024

Part of the problem with the industry is all of the burdening red tape California has imposed on film production. It's capped 20-25% tax incentive for film production has not been as competitive when it comes to other states such as New Mexico, Georgia or Louisiana with upwards of nearly 50% refundable or transferrable tax incentives that are not capped; or the Canadian provinces with subsidy programs. As a result of this, California has been loosing film industry jobs for decades, and now actual companies are starting to relocate, as many independent film companies do not have enough of a base to spread a loss on and get hit the worst. My feeling is that if California plans on saving one of its critical industries, it needs to become more competitive by incentivizing film companies to stay locally and follow models that other states and Canada have been doing. California could adopt a better transferrable tax credit program for film production and would largely give critical access to these film companies to survive financially as well. That's the light at the end of the tunnel as I see it. If I didn't see a way out of this film industry crisis, I would be reluctant to keep struggling. - Film Regions International CEO John Blythe

Productions are down by about 40% and entertainment industry employees say they can't find work.

09/07/2024

FRI reports on contracts cuts; productions scaled back
> Two new interim board members appointed.

(Los Angeles, CA) A central business objective has always been that Film Regions International, Inc. (FRI) seeks to become a viable full-service independent film production and distribution company and operating within budget. Lately however, those have clashed – with repercussions that followed. As a result, the small indie film company has been working aggressively on its turnaround plan that was adopted in May to deal with the company’s fiscal problems and liability defaults that began in April. John Blythe, president of the production company, reported that the defaults were paid and the production company has been going through the process of evaluating its contracts to either reduce costs or look at re-negotiating these to reach more favorable and financial outcomes.

Blythe admits, some of the decisions made over the last several years to augment film production personnel and enter into contracts to expand opportunistic services have been retracted as its current financial advisors warn that additional cutbacks may be needed until the production company can reach a level of stability and eliminating those that are not beneficial. One such contract that was cut was FRI’s long standing relationship with Finalé / Picturehouse Post which is situated in Vancouver, British Columbia. FRI entered into a sales contract with the post facility in 2018 but has been greatly underutilized in recent years, and FRI’s in-house productions could not afford their high post production costs.

“Unfortunately, it would be wrong for us to keep a contract for paying more out than what we would take in” Blythe said. “However, we can revisit the contract (with Finale/Picture House) down the road when we as a company continue to turn around.” Aside from some of the contract terminations, since the board approved its turnaround plan in May and recruited outside advisors, it has (for the most part) completely cut production cost to projects that were currently in development and will not be taking on any other in-house productions until its finances are ironed out and revenue can be more specifically realized, as such expenses continued to impact FRI’s bottom line. “Current production services are going to suffer” Blythe said.

Adding to FRI’s continued challenges was a notice “out of the blue” from Amazon Prime Video Direct making model changes to its content submission platforms. The changes have included removing titles without notice and potentially Amazon taking additional share of net revenue. So far, none of FRI’s film titles on Amazon that are available in the U.S., U.K. Japan and Germany have been affected by the changes, “but we’re not just rolling over and saying woe is us” Blythe said. “We need to stay on top of these challenges. A few years ago we had a lot of problems with our aggregation contract with Distribber before it went into bankruptcy. Amazon has been one of the few direct-VOD platforms that does not require an aggregation service contract, so it can be crucial to us as an independent film company; however should Amazon remove our titles, Plan B would be to submit those titles through our contract with Film Hub which also deals with Amazon, but they also take 20%, in addition to what Amazon would already take.”

Should Amazon change its net revenue share contracts, for a small independent film company, it greatly depends on that revenue. “Say Amazon changes from 50% net revenue share to 30% or even 40%, such a change could be crippling” said Blythe. “But Amazon doesn’t care about the small independent companies like ours, they look at a title on a computer screen and say it doesn’t look like its making money, so remove it from the server and that’s that” Blythe said, sounding frustrated and resigned to the likelihood that FRI, like so many emerging independent film companies, is having financial challenges and always have and always will.

The head of FRI gave a detailed presentation at its recent August 21st board of directors meeting and is currently evaluating its short-term and long-term financial goals of its strategic plan. “Sometimes I wish our shareholders and our filmmakers and clients would come to our board meetings to hear more about these challenges” Blythe said.

At least two new individuals will be hearing more about FRI’s challenges, as the production company had two applications submitted to fill vacancies on the company’s seven member board. Raaj Rahhi and Stephen Wu were both ratified and approved by the board. Rahhi, originally from India, has worked in the motion picture industry in both producer and executive positions for over twenty five years in independent films and within the major studio system; and Wu is an actor and executive producer on two of FRI’s previous films.

Rahhi and Wu will serve as interim board members until the next annual shareholder meeting, at that point they can choose to run in the board election.

08/20/2024

!

08/11/2024

FRI Updates
From: John Blythe, President of Film Regions International, Inc. (FRI)

It has been a while since we have used our page to convey messages and share updates to our film clients both in America and overseas, and I would like to take this opportunity to address some of the issues concerning Film Regions International (FRI) and to update everyone as it relates to progress moving forward as we have been in a situation of having to retrench.

To begin this update, the Board of Directors of FRI will likely consider appointing New York based producer and executive, Raaj Rahhi, a veteran in both the independent film sector as well as within the studio side of the industry. Our next Board of Directors meeting will be held later this month which the Board will consider approving him to one of the vacant seats on the board. More detailed information about Mr. Rahhi’s appointment will be given at a later date.

As we just completed the half way point of this year, we have been dealing with a handful of difficulties that began towards the end of the first fiscal quarter. Unfortunately, many of our films in distribution have been experiencing diminishing revenues and our projections were less than expected; furthermore compounded that we continued to finance and produce in house productions that only added expense to the company, plummeting our bottom line into a net loss by the end of the first quarter. As a result of these issues, we had experienced debt defaults into the second fiscal quarter that prompted the engagement of outside assistance and brought in a consultant from SCORE, Felix Lee who has been assisting in a preliminary turnaround plan that the board adopted in May and addressing action items that we have been moving on.

In addition to this, we also felt we needed an experience entertainment business consultant and recruited the assistance of VJA Consultants to begin addressing our company’s overall business plan and reviewing all of our existing contracts including all films in distribution, joint ventures and partnerships in an effort to see where we have been loosing money or in an effort to reduce cost. Some of our contracts we have had for films in distribution have not been performing to our satisfaction. These challenges over the years have included some of our films that received distribution through major distributors such as IFC Films or Gravitas Entertainment with variable costs impacting our finances; to failed aggregation contracts with Distribber to current challenges with Film Hub that have at one time were beneficial to independent film producers.

Just a few years ago, the development of VOD distribution as an ancillary market was a critical factor in recoupment and profits for independent producers and to recognize and cultivate the interrelationships between the various markets. FRI seized on these opportunities as VOD distribution was a new lifeline to the independents, versus theatrical distribution which has the enormous recoupable costs related to P&A expense. Today this is unfortunately no longer the case. As for example what were once capitated rates have become far more flexible, meaning that what used to be an 80% deal payable to the producer for distribution, is now sometimes as low as 60% payable and the remaining 40% in distributor fees on top of P&A cost recoupment. Distribution models, particularly in S-VOD and A-VOD, has also been oversaturated within the market place, making it difficult for accessibility for films which has greatly affected us as a company. Amazon Prime Video has also made VOD distribution more difficult as their selection process is more stringent than it was just a few years ago. For FRI to navigate through these challenges has been just that, a challenge.

In addition, our partnership with Finale Editworks/Picture House Post in Vancouver Canada that we have had since 2018 has also been a loss to us as a company. We have since submitted a termination notice of our contractual relationship with them, effective July 15th.

I hate being a bearer of bad news that we are seeing our services suffer, productions cut and as a result to these issues we are having to put an abrupt halt to productions in development with the exception of a select few that has been part of the paring arrangement advised by our consultants. These reports to cuts and contract cancellations I do not take any of this very lightly as we have been trying to build a successful full-service independent film production and distribution company for years only now to find ourselves having to back pedal due to financial difficulties. Sometimes, I wish our shareholders and filmmakers would come to our board meetings to hear more about these issues as they are not only affecting FRI, but many of the smaller independent film companies in the industry. When we all have our “Batman”, then we will hit a home run. But the independent side of the film industry does not produce a “Batman” and we cannot run a business depending on that.

In writing this, I have tried to address some of the challenges plaguing FRI in recent months, however I believe I need to be fair and transparent with our shareholders, my board of directors, our clients and our filmmakers and crews that we employ. As always, my door is open to anyone who wishes to discuss any of our issues.

08/04/2024

"Inverted" now in release!

07/28/2024

Last night’s screening of our production “How to Kill Your Co-Workers and Get Away With It” in North Hollywood with director Pat Kusnadi and executive producer/shareholder of Film Regions International Erick Stryker.

07/03/2024

FRI pressured to raise working capital
> Indie film company continues to struggle; will be appointing entertainment consultant.

Film Regions International, Inc. must immediately figure out a way to raise working capital to maintain operations as was discussed during a recent special board of directors meeting on June 26th. The indie film company, which has continued to struggle with cash flow problems since March, had recently brought in a consultant , Felix Lee, with SCORE / SBA, who has been advising on turnaround options. However, during a previous executive committee meeting, FRI co-chairman Myron Ward indicated that it may be necessary to consider bringing in an additional consultant specializing in the independent film business specifically to see advise on a complete overhaul of FRI’s business plan, contracts, asset utilization in addition to its financials. “When it comes to independent film, there’s no sacred cows to get negative costs recouped quickly” said Ward.

At its special board meeting, a turnaround plan had been submitted to the full board, which specifically including cutting costs, raising working capital by selling its available stock and addressing several of the aforementioned items such as review of its film distribution contracts and business plan items where an another consultant could be utilized. FRI board member Ron Puleio stated that he was somewhat taken aback by several of the company’s recent problems, however agreed that appointing another consultant would probably be beneficial moving forward.

Despite its fiscal challenges, Lee advised whether or not FRI brings on another consultant, that FRI should still go through all its business plan operations, financials and existing film distribution contracts to either reduce cost or see where company assets are not being utilized to their full advantage such as territories that have not been sold per film. “This way FRI can capture and maximize revenue overall”. Lee also indicated in his progress report to the board that the “old industry system has been evolving and it is of better advantage for independent film companies to continue distribution through non-theatrical venues including ancillary and aggregation or fee for service companies.” While independent films have been utilizing non-theatrical venues, “the challenge has still been the recoupment of P&A costs and slow amortization on negative costs as well” said John Blythe, president of the company. “While this is one set of challenges, we still need to figure out a way to raise working capital if this company is aiming at survival, this has to be a top priority whether this is through selling shares or finally changing from an S corporation to a C corporation or some other form.” FRI’s cash flow problems from the first quarter of the fiscal year caused the company to go into default on some of its liabilities, although Blythe reported to the board that this was resolved recently.

However, to further compound these challenges, FRI has recently been in a situation where several of its domestic and foreign filmmaker clients want to opt out or rescind their distribution contracts which could also have future financial ramifications and will need to be addressed. “Part of the situation has been sometimes it can take nearly a year before profitability is fully realized from filmed entertainment revenues, and several clients have been frustrated with this” said Blythe.

For the interim, Ward and Blythe feel an additional consultant who specializes in the independent film sector of the industry can help bring specific insight on addressing FRI’s current financial situation and to also evaluate the status of the production company and make recommendations on improvements. Blythe reached out to at least three for a proposal which include: Von Johnson and Associates in Beverly Hills; Gary Rubin, former president of First Independent Pictures in West Hollywood and independent film producer, Alex De Castro.

FRI’s board approved appointing an entertainment consultant which Blythe will work with and bring back to the board at its next regular meeting with additional specific plans addressing its issues.