Sunday, November 21, 2010

Fatkat requested money before coming to Miramichi

Sept. 7, 2009

This is part 3 of our look at documents obtained from the provincial government iunder the Right to Information Act regarding it's dealings with Fatkat Animation.

On April 4, 2003 a Fatkat representative whose name was blacked out sent an e-mail to Business New Brunswick in which they talked about the possibility of relocating the studio to New Brunswick from Nova Scotia.

The e-mailer called two Business New Brunswick representatives, whose names were blacked out, "honourable and sincere people" and said how excited they were about moving to New Brunswick.

But the e-mail also said there were a few things standing in their way and they wanted to be open and honest about them.

One of the issues was a lease on an apartment until December, which the e- mailer couldn't break, but they were looking for someone to take it over and asked if any funding was available for moving.

A note scribbled after the request had a simple no for an answer, while other hand written notes said "ACOA EI program" and "tax issue."

The e-mailer also said they were looking to buy a house in Chatham, but the bank wouldn't approve a mortgage without a signed contract.

"I'm sure secured government funding or a big production contract would persuade them. Or is there something else that the government could do to help us?"

The e-mail went on to say there was concern about selling a big production contract and although there seemed to be a lot of potential business headed their way, the e-mailer said they were clearing out room in their apartment so they could work in the same location with an associate whose name was blacked out.

"But if something big does come in, say a production gig to produce 16 episodes of a animated series. We'll have to set up shop really quick. This is where I ask how fast can funding come through if a contract is on the line?"

The Fatkat representative mentioned the possibility of someone whose name was blacked out becoming a partner in the company and had several questions about the implications of being based in Halifax.

"NB wage subsidies obviously wouldn't apply but ACOA funding is maritime based is it not? So I can't see a problem. Or am I incorrect?"

The writer also asked if there were any programs they could apply for as soon as possible to keep the potential partner around until government funding kicked in.

"If things keep going at the pace they are we should be fine. These are just the variables we're looking at and I like being completely honest about my situations especially with the two people that will be playing a part in the Fatkat's future."

A second e-mail later that day asked if the unknown Business New Brunswick representatives could connect them with some of the companies they were talking about over the previous few days because Fatkat always had room for more projects.

"Things are very exciting for us right now. All we need is a long term contract to help push us in the right direction. Anything you could do to help would be most appreciated and never forgotten."

It went on to say they would send letters of interest as they receive them and asked if they would be of use to the representatives.

On April 9, 2003 a Business New Brunswick representative sent Fatkat an e- mail in which they said they spoke with someone from the Training, Employment and Development Department who provided details about the Self-Employment Benefit (SEB) program.

The e-mail told Fatkat to talk to someone whose name was blacked out, but the company representative had met during a visit to New Brunswick.

The Business New Brunswick representative thought it would be worth calling to let them know how far the Fatkat representative was in the employment insurance process.

"That way, he will be able to provide the guidance and information necessary so you can take advantage of the SEB program when you relocate to New Brunswick. "

An e-mail from a Business New Brunswick project executive, which was undated but spoke of being out of the office April 30, thanked Fatkat for sharing their comments and suggestions regarding the Fatkat Animation business plan.

The improvements listed by the executive were a letter from NBCC Miramichi outlining where the students are going for employment opportunities, a greater outline of animation firms in New Brunswick and Atlantic Canada, and letters of intent from potential clients.

They also said once the improvements were completed and a marketing plan drawn together, Business New Brunswick would re-engage Fatkat in the evaluation process.

The project executive addressed Fatkat's concerns about ACOA's history with information technology startups and said one of their colleagues had dealt with information technology files in the past and might have been able to move things along.

The documents included Fatkat Animation's one-time expenses for the first month as $60,498 for items such as computers, animation tables and leasehold improvements.

A separate note on the same page listed $42,098 for equipment, $5,400 for furniture and $27,680 for software.

Fatkat listed $2,779 for supplies including animation paper, tape and pencils.

One page with a heading called contract work listed monthly amounts next to six blacked out names for a total of $30,300.

Those contract amounts were included under payroll in the monthly expense figures, along with $2,500 for rent and $5,000 for possible travel costs.

Another page repeated the monthly expenses and had a typed side note titled "from balance sheet" and listed long-term debt as $17,100.

Under startup costs, Fatkat listed one-time expenses at $57,148, but the other figures remained the same.

A comment at the end of the financials said it would be more cost effective to switch to salaried employees once revenues reached $100,000.

On the company's starting balance sheet they listed a $17,100 shareholder loan, an $8,000 shareholder loan and $83,780 startup loan under liabilities and equity.

Under the company's profit and loss projection Fatkat listed a net loss of $2,211.30 for March 2003, but predicted the net profit would gradually increase every month up to $22,963.53 in March 2004, which was the last month listed.

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