Investor disclosures

The rest of this document explains, in editorial English, what that warning means in practice, what your rights are, and what you should expect.

Not a ticket. Not equity in Cinema the company. A direct stake in one film's revenue, paid out quarterly when there's something to pay out.

When you place an order on a Cinema offering, you are subscribing to Series Revenue Participation Units in a single-film LLC formed for that title. The LLC owns the film's commercial rights and pays distributions to unit holders per a published waterfall.

What you do not get

• Equity in Cinema Cooperative, Inc. (the platform).
• Voting rights on creative decisions — you are not a producer.
• Profit participation in the creator's other films.
• A redemption right. You cannot demand your money back once the offering closes successfully.

What you do get

• A pro rata share of the investor pool, paid quarterly when the film generates net revenue.
• A statement each quarter showing earnings, fees, and your distribution. (See a sample statement.)
• A 1099-DIV at year-end summarizing distributions for tax filing.
• An annual Form C-AR update from the issuer.

Federal law caps how much a non-accredited investor can put into Reg CF offerings across all platforms in a rolling 12-month window. The caps adjust with inflation; the figures below were last revised by the SEC in 2024.

We calculate your applicable cap during KYC based on the figures you self-certify, and we enforce it at checkout. If a purchase would push you over the cap, we cancel the order and refund.

Specific failure modes you should expect, in plain language. None of these is hypothetical — all have happened to real Reg CF film offerings.

Every dollar a film earns is split through a "waterfall" — a published priority of payments. Investors come fourth, after expenses, the platform fee, and the filmmaker's recoup.

Below is the standard Cinema waterfall, applied to a hypothetical $10,000 of film earnings in a quarter. Individual offerings may use a custom waterfall published in their Form C; if so, that custom version supersedes this default.

After negative cost is recouped, the filmmaker/investor split typically inverts to favor investors at a defined ratio (commonly 60/40 investor-favored). The exact terms are in each offering's Form C.

Not specific to Cinema — there isn't enough Cinema-platform history yet to draw conclusions. This is the broader independent-film Reg CF cohort from 2018–2024, as published by the Crowdfund Capital Advisors Indie Film Index.

Reg CF securities are restricted under SEC Rule 501. You may not freely resell your units for the first 12 months after purchase, except to: the issuer, an accredited investor, a family member, or in connection with death, divorce, or similar legal event.

Even after the 12-month restriction lifts, there is no public market for these units. Cinema does not operate a secondary trading desk. Resale, when possible, is private and likely at a discount to face value.

Plan to hold for the long tail. If you would need this money in the next five years, do not invest it here.

You may cancel any pending investment commitment up to 48 hours before the offering's stated closing date, for any reason or no reason, by clicking "Cancel commitment" on the offering page or in your Portfolio. Funds in escrow are returned to your bank within 10 business days.

If a material change is made to the offering's terms after you commit, we are required to re-confirm your commitment. If you do not re-confirm within five business days, the commitment is automatically cancelled.

Once the offering closes successfully and funds are released to the issuer, cancellation is no longer possible.

Distributions from film LLCs are typically reported on Form 1099-DIV as ordinary dividend income. In some structures they may flow through on Schedule K-1 instead — the offering documents will tell you which.

Cinema is not a tax advisor. Talk to one. The interplay of passive activity rules, state-level film tax credits, and at-risk basis is real and consequential.

We file 1099-DIVs by January 31 each year for the prior calendar year and post them in Portfolio → Tax documents.

Cinema accepts and labels AI-assisted offerings. These carry additional risks specific to the category that may not be obvious from a watch:

• Copyright uncertainty. The U.S. Copyright Office's position on AI-generated work is evolving. A film whose components are not registrable may be harder to license, harder to enforce, and easier to copy.
• Training data exposure. If a model used in production was trained on infringing data, a downstream claim may attach to the film. We require creators to attest to their model provenance; attestation is not a warranty.
• Likeness and voice litigation. Recognizable likenesses and voices generate the bulk of AI-related lawsuits. Cinema requires releases for any identifiable real person; review the Form C.
• Audience reception. The market for AI-assisted cinema is still forming. Some festivals decline AI-assisted submissions outright; some streamers refuse them.

None of this is a reason not to invest in AI-assisted work. It is a reason to read the Form C carefully and to size positions accordingly.

Cinema is not itself a registered funding portal. Reg CF offerings on this site are conducted through Marquee Funding LLC, an SEC-registered Reg CF intermediary and FINRA member (CRD #289201).

Marquee Funding handles investor commitments, escrow, anti-fraud screening, and post-closing investor communications. Cinema operates the discovery surface, the editorial materials, and the player. The two are contractually distinct.

You can review Marquee Funding's BrokerCheck record at brokercheck.finra.org and its Form Funding Portal at the SEC's EDGAR system.

Investor relations

investors@cinema.example · Replies within 2 business days.

Compliance

compliance@cinema.example

Funding portal

Marquee Funding LLC · CRD #289201 · hello@marqueefunding.example

Mailing

Cinema Cooperative, Inc.
Investor Relations
2100 Mission Street, Suite 4
San Francisco, CA 94110