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Joshua Jackson at the Windsor Arms Hotel in Toronto on Sept. 13, 2021.Sonia Recchia/Getty Images for Liquid Media Group/ Jane Owen PR

One of the biggest buzzes at 2021′s Toronto International Film Festival didn’t come from a movie – it was created by Liquid Media, a company led by Canadian actor Joshua Jackson.

Through a “Liquid Lounge” and a red-carpet party at the Windsor Arms Hotel, one of the few in-person parties during that hybrid TIFF, Jackson’s venture promoted the idea that it is a transformational entertainment company. Liquid Media will use data and cutting-edge technology to bring the spoils of filmmaking to independent content creators, not the old-line movie studios that have traditionally raked in the lion’s share of the industry’s profits.

“I want to recreate Warner Bros., but in 2021,” Jackson, best-known for his roles on Dawson’s Creek and The Affair, and most recently the star of the series Dr. Death, told The Globe and Mail in an interview at the festival.

A year later, as another TIFF begins, Jackson’s company seems to be going in reverse, rather than executing its forward-looking vision.

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Liquid Media still posts little revenue and records large losses. Two of the company’s top officers have departed suddenly. The stock price has plummeted, leaving Liquid Media facing removal from the Nasdaq stock market. The company is worth, at US$8-million, less than the homes of many of Jackson’s Hollywood actor peers. And it may run out of money in the next year if it fails to raise new investment, its outside auditors say.

The woes, detailed in the company’s filings to stock-market regulators, are a sharp contrast to the company’s more promotional statements. Jackson has positioned the company as a futuristic champion of independent filmmakers, a force for social good and the potential saviour of the Canadian film industry.

“When I was a kid, we didn’t really have the ability to support our own voices,” Jackson, a native of Vancouver, said in an interview with ET Canada that aired on Aug. 30, 2022. “I started this company, Liquid Media, and it basically was me trying to solve for the problem that I had always seen as a Canadian. ... We can be part of this global fabric of storytelling. There’s no reason why we can’t do that. That’s my dream for the Canadian industry.”

The Globe and Mail asked the company’s public-relations representatives on Aug. 19 for an interview with Jackson, now serving as the company’s interim chief executive officer. They were unable to arrange it.

The simplest description of Liquid Media’s business plan is that it intends to help filmmakers and similar content creators deliver their product directly to viewers through streaming or other new technologies, without having to rely on the existing studio system. “Independence for Independents,” the company calls it.

That can get lost in the gaseous cloud of buzzwords Liquid Media uses to promote itself. On its website and in investor presentations, Liquid Media touts its “four-phase solution engine – the entertainment business ecosystem of the future” – to help professional film, television and video creators grow outside the major studio system.

The first stage is “intelligence” – the use of a “powerful suite” of artificial intelligence and data-analytics tools to plan and package content creation. Stage two is financing, while the third is “technology” that backs content production. The fourth phase is “monetization” and distribution of the content, which creates “proprietary data” that “flows back to Stage I, cumulatively informing all stages.”

The company has recently begun to describe its intelligence, distribution and financing offerings as a “Content Flywheel.”

In late 2021, Liquid Media began touting its “professional blockchain approach,” which ”leverages tokenization and NFTs as value-adds for filmmakers across the content lifecycle.”

In early 2022, in a video interview with entertainment-industry publication Deadline, several Liquid Media executives and business partners explained how new subsidiary IndieFlix Group Inc. was showing Angst, a 2017 documentary on bullying, to schoolchildren. IndieFlix chief executive officer Scilla Andreen, who created the documentary, said the plan was to eventually issue NFTs to its viewers.

“I actually think the blockchain is a way to even address racism at its core,” Andreen said in the video. “There are no gatekeepers, barriers. This is huge. We haven’t even scratched the surface of it.”

Jackson’s Liquid Media might be no different than dozens of other hyped-up Hollywood operators whose businesses don’t match their sales pitch. Unlike them, however, Liquid Media made a decision to be a publicly traded company, with its shares available to ordinary investors – and its financial disclosures available for anyone to see.

Shares in Liquid Media were first available for purchase by investors on the Toronto Venture Exchange, where smaller, riskier companies list their stock. In 2018, at a time when it recorded less than US$600,000 in sales and a loss of US$8.4-million, it decided it wanted to be on the much-bigger Nasdaq stock market. The goal, Liquid Media said, was to gain attention – and ultimately sell its stock – to U.S. investors attracted to media and technology companies.

After abandoning a business model centered on video gaming, Liquid Media started over and began to use its shares to buy a number of small media companies for its four-phase content-building strategy. Prior to the deals, Liquid Media had no real business to speak of: In the nine months leading up to last year’s TIFF, the company posted slightly less than US$20,000 in revenue.

In September, 2021, it bought IndieFlix, a streamer of a number of documentaries and other films, for US$765,000 in stock. In December, it bought iGEMStv Inc., which it described as “the most comprehensive content recommendation engine on the market,” for US$233,750 in stock. And in March, it acquired Digital Cinema United Holdings Ltd., a provider of “content supply chain technology and services,” for US$1.68-million. In each case, Liquid Media has promised to pay the previous owners of the companies more stock in the future, adding to the purchase price, if the acquired companies can increase their revenue.

What is clear is that all these acquired companies are still very small: Liquid Media’s total revenue for the three months ended May 31 was US$1.66-million. The company posted a loss of a little more than $1-million. (For comparison, major studio and content company Paramount Global brought in US$3.6-million in revenue every hour in its most recent quarter.)

For much of Liquid Media’s history trading in the United States, the company’s stock price hovered around US$2. In March, 2021, a burst of excitement sent the shares as high as US$7.50. The company took advantage of the price action by raising US$6-million from investors at $3.35 a share.

It’s been downhill since, with the shares dropping below US$1 earlier this year. Liquid Media stock last closed above 50 US cents May 4, and it hit a low of of 33 US cents May 12.

Jackson owns 860,533 shares, representing about 4.5 per cent of the company, according to a Liquid Media disclosure.

In March, the Nasdaq stock market told Liquid Media it risked being “delisted” – removed from trading on the exchange – because its price had dropped below the required minimum of US$1. Liquid Media said Aug. 31 Nasdaq has given it a 180-day extension, to March of next year, to get its stock price back up.

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Perhaps more troubling is the “going concern” opinion from Liquid Media. When a company prepares its financial statements, it must assume that it will stay in business in the following year. But if there’s a substantial doubt that’s the case, a company has to disclose it – and that’s exactly what Liquid Media says in a footnote to its financial statements for the year ended last November.

Liquid Media says its management has estimated that it does not have sufficient liquidity given what it owed at the close of the year, and “these material uncertainties cast substantial doubt upon the company’s ability to continue.”

Since that warning, Liquid Media’s cash has dropped to US$1.7-million on May 31 from US$4.3-million in late November. It had nearly US$3.5-million in accounts payable – bills it needs to pay.

For the time being, it is Jackson himself who shall fix this. Ronald Johnson, a media business development consultant who joined Liquid Media as CEO in January, 2021, and made frequent appearances to promote the company, resigned in June, 2022.

Andy Wilson, the company’s chief financial officer since April, 2021, resigned in July, with the company saying in a late-night Friday statement, that “effective immediately, Andy Wilson is no longer involved with the Company in any capacity.” As an interim CFO, Liquid Media hired a Vancouver consultant who says on LinkedIn she is currently a finance executive of 10 other companies, including six as chief financial officer.

Wilson did not respond to a message sent through LinkedIn. Johnson responded to a LinkedIn message, declining to be interviewed, but saying he “resigned from Liquid Media to pursue other opportunities after helping the company reach new heights. I wish nothing but the best for Liquid Media and its stakeholders.”

Jackson, meanwhile, has spent the summer shooting a series reboot of the film Fatal Attraction, for streaming service Paramount+.

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