INVESTMENT CONSIDERATIONS AND RISK FACTORS
The acquisition of Production Units is subject to a high degree of risk and is suitable only for sophisticated investors that fully understand that risk and are prepared to bear that risk for an indefinite period of time and are able to withstand a total loss of their investment. The investment considerations and risk factors described below summarize some of the material risks inherent in the offering of the Production Units. These Investment Considerations and Risk Factors are not presented in any particular order of significance. Prospective investors should carefully consider the following factors, among others, in making their investment decision.
The documents and materials provided by the NTO in connection with the sale and issuance of the Production Units, including, but not limited to, the NTO’s business plan and projections, contain certain forward-looking statements that involve risks and uncertainties. These statements relate to the NTO’s future plans, objectives, expectations, forecasts and productions, and the assumptions underlying or relating to any of these statements. These statements may be identified by the use of the words such as “expects,” “anticipates,” “intends,” “estimates,” “believes,” “projects” and “plans” and similar expressions. The NTO’s actual results could differ materially from those discussed in these statements. Factors that could contribute to such differences include, but are not limited to, those discussed in these Investment Considerations and Risk Factors.
The business of NTO is the staging of theatrical productions. This business is high risk and it is possible that the whole of the NTO’s investment in any production may be lost.
There is no recognized market for Production Units. No “over the counter” market exists. Accordingly, it may be difficult for Unit Holders to sell or realize their investment or to obtain reliable information about the extent of the risks to which they are exposed. All Production Units Holders are "locked in" for a period of either 12 or 24 months, during which time Unit Holders will receive monthly returns in terms of the formula stated elsewhere on this website and also in the hard-copy formal invitation to participate in the offer.
Potential Unit Holders are strongly advised to consult an investment adviser, attorney, stock broker, accountant or bank manager or any other professional adviser who specializes in investment of this kind, before making their decision to invest.
Theatre finance is a difficult and fairly unknown field in South Africa. Losses may be incurred for many months before any profit may be shown. In London’s West End and New York’s Broadway, it is the norm for two out of every four productions to show a healthy profit, while the other two may range from moderately successful to totally dismal.
The success of productions depends heavily on public taste and acceptance of a particular production. Attendance may also be subject to weather conditions, television programming on particular nights of the week as well as other live entertainment events.
Most often, attendance depends on the presence of a “celebrity” cast member. The engagement of so-called celebrities and high profile artists is costly and as a result of this, potential profits may be less substantial than the potential profit from a production featuring lesser- known artists. While NTO goes to great lengths to mitigate all known risks, certain risk factors are or will be beyond NTO's direct control or influence.
