Form 8-K - Current report
07 Juli 2023 - 11:10PM
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2023-06-30
2023-06-30
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 30, 2023
STRONG
GLOBAL ENTERTAINMENT, INC.
(Exact
name of registrant as specified in its charter)
British
Columbia, Canada |
|
001-41688 |
|
N/A |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Commission
File
Number) |
|
(I.R.S.
Employer
Identification
Number) |
5960
Fairview Road,
Suite
275
Charlotte,
NC |
|
28210 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (704)
471-6784
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Ticker
symbol(s) |
|
Name
of each exchange on which registered |
Class
A Common Voting Shares, without par value |
|
SGE |
|
NYSE
American |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item
1.01 | Entry
Into a Material Definitive Agreement. |
1.
Acquisition of SH2022
On
July 7, 2023, Strong Studios, Inc (“Strong Studios”), a wholly-owned subsidiary of Strong Global Entertainment, Inc., entered
into the Safehaven 2022, Inc. Stock Purchase Agreement with Unbounded Services LLC, to purchase 510 shares of the common stock of Safehaven
2022, Inc. (“SH2022”), effective as of June 23, 2023. As a result, Strong Studios’ ownership in SH2022 increased from
49% to 100%, and SH2022 became a wholly owned subsidiary of Strong Studios.
2.
Transactions with CSSE Companies
On
June 30, 2023, SH2022 entered into a purchase agreement (the “Purchase Agreement”) with Screen Media Ventures, LLC (“SMV”),
to purchase all of SMV’s right, title and interest in a television series presently entitled “Safehaven,” including
all rights acquired by SMV pursuant to that certain distribution agreement dated March 3, 2022 and subsequently amended on May 20, 2022
(the “Distribution Agreement”) between and among SMV, Strong Studios and SH2022. SMV is a subsidiary of Chicken Soup for
the Soul Entertainment, Inc. (Nasdaq: CCSE) (“CSSE”).
The
purchase price is deemed satisfied by the payment in full by Ravenwood-Productions, LLC (“Ravenwood”) of the amount due as
a minimum guarantee due to Bank of Hope (the “Bank”) as described in the discussion of the Management Agreement with Ravenwood
below. SMV is entitled to receive no further payments in respect of the “Safehaven” production, provided that, upon Strong
Studios’ receipt of $15,000,000 in gross receipts, SMV shall be paid an amount equal to five percent (5%) of the net proceeds up
to a maximum of $400,000. The Purchase Agreement is subject to the satisfaction of certain conditions precedent, including the above-mentioned
payment by Ravenwood to the Bank, which was made on July 7, 2023, and is retroactively effective as of June 30, 2023.
On
June 30, 2023, Strong Studios and Landmark Studio Group, LLC (“Landmark”) signed a second amendment to the assignment and
attachment agreement (the “Second Amendment”) to amend the assignment and attachment agreement entered into by Strong Studios,
Landmark and FG Group Holdings (as the guarantor; formerly Ballantyne Strong, Inc.) on March 3, 20222. The Second Amendment terminates
all interests held by Landmark and its parent, affiliated and subsidiary companies in the “Safehaven” series.
3.
Transactions with Ravenwood
On
July 7, 2023, and effective as of June 30, 2023, SH2022, Strong Studios and Ravenwood entered into a management agreement (the “Management
Agreement”), pursuant to which:
| ● | Ravenwood
will promptly advance the amount due to the Bank in respect of the minimum guarantee under
the Distribution Agreement, which as of June 30, 2023 was approximately $6.4 million, on
the later of June 30, 2023, the complete execution of the Management Agreement, and the satisfaction
of the conditions precedent mentioned below. |
| ● | SH2022,
Strong Studios and Ravenwood will enter into a sales agent agreement with an agency to represent
and sell the “Safehaven” series. |
| ● | Each
of Ravenwood and Strong Studios will be paid a management commission of 20% and 7%, respectively,
of the Net Sales Price of the Series (as defined in the Management Agreement). |
| ● | All
Gross Receipts (as defined by the Management Agreement) shall be distributed according to
an agreed waterfall, with the balance to be paid to the named participants, including Strong
Studios which will be paid 32.5%. |
| ● | SH2022
conveys to Ravenwood an undivided 75% interest in all rights in and to the “Safehaven”
series, retaining 25% for itself. |
The
parties’ obligations under the Management Agreement were subject to the satisfaction of certain conditions precedent, all of which
were satisfied by July 7, 2023.
Item
2.03 | Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The
disclosure set forth above in Item 1.01 of this Current Report on Form 8-K under the heading “Transactions with CSSE Companies”
is incorporated by reference herein.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
STRONG
GLOBAL ENTERTAINMENT, INC. |
|
|
Date:
July 7, 2023 |
By: |
/s/
Todd R. Major |
|
Name: |
Todd
R. Major |
|
Title: |
Chief
Financial Officer |
v3.23.2
Cover
|
Jun. 30, 2023 |
Cover [Abstract] |
|
Document Type |
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|
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|
Document Period End Date |
Jun. 30, 2023
|
Entity File Number |
001-41688
|
Entity Registrant Name |
STRONG
GLOBAL ENTERTAINMENT, INC.
|
Entity Central Index Key |
0001893448
|
Entity Incorporation, State or Country Code |
A1
|
Entity Address, Address Line One |
5960
Fairview Road
|
Entity Address, Address Line Two |
Suite
275
|
Entity Address, City or Town |
Charlotte
|
Entity Address, State or Province |
NC
|
Entity Address, Postal Zip Code |
28210
|
City Area Code |
(704)
|
Local Phone Number |
471-6784
|
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|
Trading Symbol |
SGE
|
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NYSE
|
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