Pre-Launch Party & Thunder Studios Lawsuit Update

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( This blog post is a copy of the shareholder newsletter published by Martell Broadcasting Systems, Inc. on 6/22/2018 and is available to read publicly at our Start Engine listing page at https://www.startengine.com/martell-broadcasting-systems )

Hi folks,

As this is our shareholder newsletter it is my job to keep everyone informed about matters of relevance to equity stakeholders. As we had two important events occur this month, I’m writing this newsletter a little early in order to honor my fiduciary duty as President of Martell Broadcasting Systems, Inc.

1. Zenither Pre-Launch Party. Last Friday on June 15th, 2018 Martell Broadcasting Systems, Inc. held a party at the Custom Hotel Lincoln Speakeasy for 230 attendees. We showed a demonstration of the Zenither TV Anywhere video streaming application to new media influencers, YouTube stars, talent, brand representatives, and film and TV distributors. Here’s a video showcasing the highlights of the event. We received very positive feedback from the attendees and have already secured several new deals from content providers who attended the event and loved what they had to see.

For those who were unable to attend the party you can see a highlights reel of the event in the attached video.

2. Content deals. We’ve recently updated our website at http://www.zenither.com/ to reflect the number of content providers we’ve entered into distribution agreements with to carry their programming in Zenither at launch. At this present date we have agreements with 20 free to watch channels and 22 premium subscription only channels.

Our content acquisition team is in talks with several additional content owners and we expect to secure even more stations before the official launch of Zenither next month. My personal hope is for us to have around 70 total channels available for watch at our launch and to rapidly add new channels every month until Zenither has tens of thousands of channels available for watch. This an exciting time.

3. Thunder Studios lawsuit update. In our Title III Offering Document on page 4 under the section marked ‘Liabilities’ ,we mentioned MBS, Inc. has an active lawsuit against Thunder Studios, Inc. for asserted breaches of an asset purchase agreement where MBS, Inc. as plaintiff asserts Thunder Studios, Inc. has failed to pay for the assets it purchased from MBS, Inc. on January 1st 2015.  This asset was the Power Up TV multi-channel network IP which MBS previously operated.

While the case went to trial in December 2017,  however the case is still pending, and a second phase of a jury trial is scheduled for November 26.

In the first phase of the trial in December 2017, a jury heard and considered all the evidence and testimony related to the parties’ claims and defenses and made the following six findings:

(1)          Thunder Studios entered into three separate agreements with Plaintiffs.  First, an agreement to purchase certain business assets from Martell Broadcasting for $100,000, second, to an agreement to employ Mr. Martell as Vice President of Thunder TV, and third, an agreement to invest in Martell Broadcasting. The prior jury found Thunder had breached its agreements, and awarded a total of $236,377 in damages to Plaintiffs;

(2)          Thunder Studios and/or Mr. Rodric David made a false representation of fact or a false promise to Plaintiffs, and that while Defendants intended to perform the promise when it was made, they acted with malice, fraud, or oppression. Plaintiffs’ total non-contract damages for this claim was $154,000 in lost earnings and $1,279,000 in lost profits, plus $750 for Mr. Martell’s non-economic losses, including physical pain and mental suffering;

(3)          Defendants interfered with Martell Broadcasting Systems’ property interests in its assets, but Martell Broadcasting suffered no damages from the interference;

(4)          Mr. Martell did not suffer harassment during his employment as a result of his disability, Mr. Martell’s disability was not a substantial factor in his termination, Thunder Studios took reasonable steps to prevent harassment and to make reasonable accommodations for Mr. Martell’s disability, and Mr. Martell was not wrongfully terminated or constructively discharged;

(5)          Defendants did not intentionally inflict emotional distress on Mr. Martell because their actions were done in the exercise of their legal rights or protecting their economic interests, in a manner lawful and consistent with community standards, and with a good faith belief that they had a legal right to so act; and

(6)          Thunder Studios failed to reimburse Carey Martell for $300 in expenses.

MBS expects the case to conclude in November and a final judgement rendered after a second jury determines whether any punitive damages should be awarded MBS for the malice, fraud, or oppression which the Defendants Thunder Studios and/or Mr. Rodric David were found by the first jury to have engaged in.

Thanks so much for your support and I look forward to sharing more exciting news with you all during our next newsletter.

Carey Martell

President, Martell Broadcasting Systems, Inc.

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