Kew Media Group Inc
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KEW MEDIA GROUP INC. ANNUAL INFORMATION FORM FISCAL YEAR ENDED DECEMBER 31, 2018 April 1, 2019 TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................................ 2 CORPORATE STRUCTURE .................................................................................................................................... 2 GENERAL DEVELOPMENT OF THE BUSINESS ............................................................................................... 3 DESCRIPTION OF KEW’S BUSINESS ................................................................................................................... 6 KEW COMPANIES .................................................................................................................................................. 10 DIVIDEND POLICY ................................................................................................................................................. 20 DESCRIPTION OF CAPITAL STRUCTURE ....................................................................................................... 20 MARKET FOR SECURITIES ................................................................................................................................. 22 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER ......................................................................................................................................................... 23 VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS ......................................................................... 23 DIRECTORS AND OFFICERS ............................................................................................................................... 24 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ................................... 37 RISK FACTORS ........................................................................................................................................................ 37 AUDIT COMMITTEE .............................................................................................................................................. 48 TRANSFER AGENT AND WARRANT AGENT .................................................................................................. 49 EXPERTS ................................................................................................................................................................... 49 PROMOTERS ............................................................................................................................................................ 49 LEGAL PROCEEDINGS AND REGULATORY ACTIONS ............................................................................... 49 MATERIAL CONTRACTS ...................................................................................................................................... 49 ADDITIONAL INFORMATION ............................................................................................................................. 52 (i) INTRODUCTION General In this Annual Information Form (“AIF”), unless the context otherwise requires, “Kew”, the “Corporation” or “we” or “us” or “our” refers to Kew Media Group Inc., including its subsidiaries. Unless otherwise indicated: (i) references to “dollars” and “$” are to Canadian dollars; and (ii) the information contained herein is given as at December 31, 2018. Forward-Looking Statements The Corporation’s public communications may include written or oral forward-looking statements. Statements of this type are included in this AIF and may be included in other filings with the Canadian regulators, stock exchanges or in other communications. All such statements constitute forward-looking information within the meaning of securities law and are made pursuant to the “safe harbour” provisions of applicable securities laws. Forward-looking statements may include, but are not limited to, statements about anticipated future events or results including comments with respect to the Corporation’s objectives and priorities for 2019 and beyond and strategies or further actions with respect to the Corporation and the Corporation’s future business operations, financial performance and condition. Forward- looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions or include words such as “will”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or similar expressions concerning matters that are not historical facts. Such statements are based on current expectations of the Corporation’s management and inherently involve numerous risks and uncertainties, known and unknown, including economic factors. The forward-looking information contained in this AIF is presented for the purpose of assisting shareholders in understanding the Corporation’s business and strategic priorities and objectives as at the periods indicated and may not be appropriate for other purposes. A number of risks, uncertainties and other factors may cause actual results to differ materially from the forward- looking statements contained in this AIF, including, among other factors, those referenced in the section entitled “Risk Factors” in this AIF. Forward-looking statements contained in this AIF are not guarantees of future performance and, while forward- looking statements are based on certain assumptions that the Corporation considers reasonable, actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Corporation. Readers are cautioned to consider these and other factors carefully when making decisions with respect to the Corporation and to not place undue reliance on forward-looking statements. Circumstances affecting the Corporation may change rapidly. Except as may be expressly required by applicable law, the Corporation does not undertake any obligation to update publicly or revise any such forward-looking statements, whether as a result of new information, future events or otherwise. CORPORATE STRUCTURE Name, Address and Incorporation Kew was incorporated under the Business Corporations Act (Ontario) (the “Corporations Act”) on November 3, 2015. On June 3, 2016, Kew filed articles of amendment to increase its authorized capital by creating an unlimited number of Class A restricted voting shares in the capital of Kew (the “Class A Restricted Voting Shares”) and on June 14, 2018 Kew filed articles of amendment to (a) create (i) two new classes of voting shares, being the variable voting shares (the “Variable Voting Shares”) and the common voting shares (the “Common Voting Shares,” and together with the Variable Voting Shares, the “Voting Shares”) and (ii) a class of preferred shares (the “Preferred Shares”) issuable in series and (b) cancel the issued and unissued Class A Restricted Voting Shares and Class B shares (the “Class B Shares”). Our head office and the registered office is located at 672 Dupont Street, Suite 400, Toronto, Ontario, M6G 1Z6. The organizational chart below illustrates the inter-corporate relationships of Kew and its material subsidiaries and joint venture entities as at the date of this AIF, including their current principal places of operation in parentheses. 2 ______________ Notes: (1) Each of Kew, Media Headquarters Film & Television Inc. (“Media Headquarters”), Architect Films Inc. (“Architect”), Bristow Global Media Inc. (“Bristow Global Media”), Our House Media Inc. (“Our House Media”), Sienna Films Inc. (“Sienna Films”) and 4East Media Inc. (“4East”) are incorporated under the laws of the Province of Ontario. (2) Each of Kew Media Group UK Limited (formerly known as Content Media Corporation Limited), Kew Media International Limited (formerly known as Content Media Corporation International Limited) (“KMD”), Kew Media Group UK Holdings Limited (formerly known as Content Media Corporation Worldwide Limited), TCB Media Rights Ltd. (“TCB”) and Awesome Media and Entertainment (“Awesome”) are companies incorporated in England and Wales. (3) Each of Collins Avenue Entertainment, LLC (“Collins Avenue”), Jigsaw Productions LLC (“Jigsaw Productions”) and Spirit Digital Media LLC (“Spirit Digital Media”) are limited liability companies organized under the laws of the State of Delaware and Kew Media Group US, Inc. (formerly Content Media Corporation) is a corporation organized under the laws of the State of Delaware. Kew holds a 47.98% equity interest and a 50.5% voting interest in Collins Avenue. (4) Frantic Films Corporation (“Frantic Films”) is incorporated under the laws of the Province of Manitoba. (5) Each of Kew Media Group Pty Limited (“Kew Pty”) and HQG Acquisition Pty Limited (“Essential Media”) are incorporated under the laws of New South Wales, Australia. GENERAL DEVELOPMENT OF THE BUSINESS Initial Public Offering On June 13, 2016, the Corporation completed its initial public offering (the “IPO”) of 7,000,000 Class A restricted voting units (the “Class A Restricted Voting Units”) at a price of $10.00 per Class A Restricted Voting Unit for aggregate gross proceeds of $70.0 million (the “IPO Closing”). Concurrent with the IPO Closing, KMG Entertainment LP (“KMG”), as sponsor, Maurice Kagan, Nicolas Chartier, Sara Curran, David Fleck, Kathryn From, Herbert L. Kloiber, David Reckziegel, Edward Riley, Mark Segal, Les Sherman, Neil Tabatznik