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.
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______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 and Nancy Tellem (the “Founders”) collectively purchased an aggregate of 442,000 Class B units of the Corporation (the “Class B Units”) at an offering price of $10.00 per Class B Unit, resulting in aggregate proceeds of $4,420,000 to the Corporation. Prior to the IPO Closing, on June 6, 2016, the Founders purchased 2,035,502 Class B Shares (such Class B Shares referred to as the “Founders’ Shares”) for an aggregate purchase price of $25,000, or approximately $0.0123 per Founders’ Share. On July 13, 2016, the over-allotment option which was granted to the IPO underwriters expired without being exercised. As a result, 175,000 of the aggregate 2,035,502 Founders’ Shares were forfeited without compensation.
Effective July 25, 2016, the Class A Restricted Voting Units, each consisting of one Class A Restricted Voting Share and one share purchase warrant (a “Warrant”) and Class B Units, each consisting of one Class B Share and one
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Warrant, separated. Upon separation, the Class A Restricted Voting Shares and Warrants underlying the Class A Restricted Voting Units commenced trading separately on the Toronto Stock Exchange (the “TSX”).
Upon the IPO Closing, an aggregate of $71.05 million from the sale of the Class A Restricted Voting Units and Class B Units, or $10.15 per Class A Restricted Voting Unit sold to the public, was deposited in an escrow account with TSX Trust Company, as escrow agent and invested in permitted investments. The proceeds from the IPO were released from the escrow account on March 20, 2017 in connection with Closing.
Qualifying Acquisition
On March 20, 2017, Kew announced the closing (the “Closing”) of its qualifying acquisition under Part X of the TSX Company Manual (the “Qualifying Acquisition”) which was comprised of the acquisition of the distribution company Content Media Corporation plc (“CMC”) and five content companies: Architect Films; Bristow Global Media; Frantic Films; Media Headquarters and Our House Media.
On Closing, all of the Class A Restricted Voting Shares that were not submitted for redemption prior to Kew’s shareholder meeting to approve the Qualifying Acquisition were automatically converted into Class B Shares on the basis of one Class B Share for each Class A Restricted Voting Share converted. Each redeeming holder of Class A Restricted Voting Shares received an amount per Class A Restricted Voting Share equal to $10.17 per Class A Restricted Voting Share so redeemed. After payment of the deferred underwriting commission to the underwriters of the IPO, the remaining proceeds held in escrow were released therefrom and used to fund a portion of the purchase price for the Qualifying Acquisition.
The Class B Shares commenced trading on the TSX on March 23, 2017 under the symbol “KEW”, concurrent with the delisting of the Class A Restricted Voting Shares.
Amendment to Share Capital
After approval by the shareholders on June 14, 2018, Kew amended its articles and converted its Class B Shares into Common Voting Shares on the basis of one to one exchange with each Canadian shareholder and Variable Voting Shares on the basis of one to one exchange with each non-Canadian shareholder. The Common Voting Shares and Variable Voting Shares have identical economic attributes and are each entitled to one vote per Voting Share, except where, in order to comply with the Canadian ownership and control requirements under the Broadcasting Act (Canada) (the “Broadcasting Act”), the voting rights attached to Variable Voting Shares are prorated down to the extent non- Canadians hold, beneficially own or control 33 1/3% or more of the voting interests in Kew at any time or at any shareholder meeting.
As part of the amendment to the articles, Kew created the Preferred Shares, none of which have been issued to date, but will be available for future issuance. The Preferred Shares enable Kew to take additional steps to ensure compliance with the Direction to the CRTC (Ineligibility of Non-Canadian) (the “Direction”), if necessary. Kew could also issue Preferred Shares to ensure continued compliance with the provisions of both the Investment Canada Act (Canada) (the “ICA”) and the Broadcasting Act, in the event that Kew satisfies the Canadian ownership and control requirements as set out in the Direction, but does not also satisfy the Canadian control requirements under the ICA.
The Common Voting Shares and Variable Voting Shares trade on the Toronto Stock Exchange under the ticker symbol “KEW”. Any references in this AIF to Class B Shares issued prior to June 19, 2018 should be read as references to Voting Shares.
Recent Developments
SunTrust Credit Facility
On August 2, 2017, Kew entered into a new credit facility in favour of its subsidiary, Kew Media International Limited, f/k/a Content Media Corporation International Limited, with SunTrust Bank (the “Original SunTrust Facility”). Under terms of the Original SunTrust Facility, a syndicate led by SunTrust Bank (“SunTrust”) as administrative agent, with SunTrust Robinson Humphrey, Inc. acting as lead arranger and including The Toronto-Dominion Bank
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and Bank of Montreal as syndication agents, has provided Kew Media International Limited with a five-year US$100 million credit facility, with an additional US$25 million accordion feature, which was increased from the previously announced US$75 million due to syndication demand.
On July 23, 2018, Kew Media International Limited, SunTrust as administrative agent, The Toronto-Dominion Bank, Bank of Montreal and the other lenders thereto entered into an Amended and Restated Revolving Credit and Term Loan Agreement (the “SunTrust Facility”), which amended and restated the Original SunTrust Facility. The SunTrust Facility is comprised of a US$80,000,000 senior secured revolving credit facility and a US$20,000,000 senior secured term loan facility.
Acquisition of TCB
On October 10, 2017, Kew acquired London, England-based TCB, a leading full-service content distribution company. With a focus on non-scripted television sales, TCB has been one of the fastest-growing distributors in the market. Kew paid initial consideration on closing of the TCB acquisition of £5.6 million ($9.3 million) in cash and £0.7 million ($1.2 million) in Class B Shares to the vendors of TCB. The Corporation also paid a deferred compensation based on TCB’s actual Adjusted EBITDA for the fiscal year ending December 31, 2017, which capped the purchase price at no more than seven times adjusted EBITDA. The vendors of TCB may also receive an earn-out of up to £4 million ($6.6 million), should TCB meet certain longer-term net revenue targets.
Disposition of Aito Media Oy
On October 17, 2017, Kew sold its 42.8% interest in Helsinki-Finland-based Aito Media Oy to Largardere Studios. Kew received initial consideration of approximately €3.0 million ($4.4 million) in cash and is also entitled to a potential earn-out of up to approximately €1.5 million ($2.2 million) in cash, based on certain future profit performance criteria.
Acquisition of Sienna Films
On November 13, 2017, Kew acquired Sienna Films, an established Toronto-based production company. This acquisition marked Kew’s concentrated entry into the production of scripted programming.
Kew paid consideration on closing of $3 million for Sienna Films, comprising $2,580,000 in cash and $420,000 in Class B Shares, representing a multiple of 2.7 times estimated annual trailing Adjusted EBITDA of $1.1 million. The vendors of Sienna Films can earn up to an additional $3 million in contingent consideration based on Sienna Films’ Adjusted EBITDA in 2017, 2018 and 2019.
Acquisition of Awesome
On February 8, 2018, Kew acquired a 20% ownership stake in London-based Awesome. The purchase price in respect of Awesome was £175,000, payable in a mix of cash and Class B Shares. In connection with the acquisition, Kew also provided a convertible loan facility, which is to be funded over 2018 and 2019. The principal of the loan is convertible after three years, in Kew’s sole discretion, into shares of Awesome. Assuming such conversion, Kew would own 51% of the fully diluted shares outstanding of Awesome, inclusive of the 20% equity interest acquired at closing.
Acquisition of Essential Media
See “Significant Acquisitions”.
Disposition of Campfire Film & Television LLC
On August 31, 2018, the Corporation sold its equity interest in Campfire Film & Television LLC to the other sole equity holder. The Corporation received consideration of US$900,000 ($1.2 million) and has minor interest in the possible future proceeds of a sale of Campfire if certain criteria are met.
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Acquisition of 4East
On September 28, 2018, the Corporation purchased, for nominal consideration, a 19.9% interest in the recently formed production company 4East.
There are currently 6,391,104 Variable Voting Shares and 7,287,888 Common Voting Shares issued and outstanding and 7,442,000 Warrants to purchase Voting Shares outstanding.
SIGNIFICANT ACQUISITIONS
On July 24, 2018, the Corporation, through its wholly-owned subsidiary Kew Pty, acquired 100% of the shares of Essential Media. On closing of the acquisition, the Corporation paid $19.5 million (AUD$20.0 million) and approximately $12.5 million (AUD$12.8 million) in the form of 1,249,536 Voting Shares. The Corporation also agreed to pay (i) up to $31.6 million (AUD$32.5 million) of additional consideration which is contingent on Essential Media achieving certain performance targets for the Essential Media fiscal years ending June 30, 2018, 2019 and 2020 and (ii) a one-time amount equal to 3.625 times the amount by which Essential Media’s adjusted EBITDA for the Essential Media fiscal year ending June 30, 2019 exceeds a minimum threshold of $11.6 million (AUD$11.9 million) payable in three installments in 2019, 2020, and 2021. In respect of the acquisition, the Corporation filed a business acquisition report on Form 51-102F4 on October 19, 2018. A copy of the report is available under the Company’s profile on the SEDAR website at www.sedar.com.
DESCRIPTION OF KEW’S BUSINESS
Overview
Kew is a leading content company that produces and distributes multi-genre content worldwide. Companies included in the Kew family are the production companies: 4East, Architect, Awesome, Bristow Global Media, Collins Avenue, Essential Media, 4East Media, Frantic Films, Jigsaw Productions, Media Headquarters, Our House Media, Sienna Films and Spirit Digital Media; and the distribution companies: Kew Media International Limited and TCB. With primary offices in London, Los Angeles, New York, Sydney and Toronto, Kew develops, produces and distributes more than 2,200 hours of new content every year, as well as manages a library of more than 14,000 hours of content to almost every available viewing platform worldwide.
Beginning with the Qualifying Acquisition, Kew has become a large, multi-faceted media company. As at the date of this AIF, Kew is comprised of 14 production and distribution companies in Australia, Canada, the United Kingdom and the United States. Kew’s media content is wide-ranging, including high-quality scripted content, non-scripted content encompassing factual, reality, lifestyle, competition, cooking and docu-soaps as well as premium documentary and digital media programming. Kew creates, distributes and represents recognizable, commercially-driven properties, including such popular titles as Dirty Money (Netflix), Dance Moms (Lifetime), Line of Duty (BBC), Cardinal (CTV, Hulu), the Baroness von Sketch Show (CBC, IFC), Leaving Neverland (HBO, Channel 4), Texas Flip N Move (DIY Network), Abandoned Engineering (Discovery Science), The Stand-Up Sketch Show (ITV), 100 Days to Victory (BBC Scotland, History Channel Canada, Foxtel Australia), Canada’s Smartest Person Junior (CBC), Ransom (CBS, City TV), and Home to Win (HGTV).
Experienced and Committed Management Team and Board
Kew’s Co-Founders, Peter Sussman and Steven Silver lead Kew as its Executive Chairman and Chief Executive Officer, respectively. Both have significant hands-on leadership experience in the content business. Peter is a former co-controlling voting shareholder of Alliance Atlantis (formerly traded as TSX:AAC) and former Chief Executive Officer of Alliance Atlantis’ Entertainment Group, as well as Co-founder and former Executive Chairman of Aver Media Finance, now a part of BMO Financial Group. Steven is a Partner and Co-founder of the Blue Ice Group, Co- founder of the Blue Lake Media Fund and former Head of Factual Entertainment for Entertainment One Ltd. (LON:ETO).
Kew has also welcomed seasoned executives to its core management, such as Geoffrey Webb, who has served as Chief Financial Officer of Kew since the Closing and previously served as Chief Financial Officer of CMC. Kew’s
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management team has decades of experience in production, distribution, management, business affairs and broadcasting and has designed, implemented and managed numerous media companies and assets throughout the world, particularly in North America and Europe.
Kew’s board of directors (the “Board”) is highly active in Kew’s strategic direction and growth strategy and is comprised of:
• Steven Silver, Chief Executive Officer and a Director of Kew;
• Peter Sussman, Executive Chairman and a Director (Chair) of Kew;
• Julie Bristow, Chief Executive Officer and President of Bristow Global Media;
• David Fleck, Partner and Senior Vice President of C.A. Delaney Capital Management Ltd.;
• Maurice Kagan, President of Canal Group;
• Patrice Merrin (Lead Independent Director), independent Non-Executive Director of Glencore plc;
• Stephen Pincus, Senior Partner at Goodmans LLP;
• John Schmidt, Non-Executive Director of Kew and formerly Chief Executive Officer of CMC;
• Mark Segal, Executive Vice President Finance and Chief Financial Officer at Spin Master Corp.; and
• Nancy Tellem, Former President of CBS Network Television Group and Executive Chairman and Chief Media Officer of Interlude Ltd.
With directors situated in Canada and the U.S. and with business relationships worldwide, Kew’s network is both broad and deep. As a result, Kew is well positioned to initiate, facilitate and successfully close local and cross-border business opportunities, including content origination, production, distribution and licensing, worldwide.
Competition
Kew’s competitors in the distribution space can be divided as follows:
• very large competitors, such as major and smaller film and television studios (e.g., NBC, Universal, Disney, Lionsgate), large companies that sometimes comprise a large broadcasting group (e.g., BBC Worldwide, A&E Networks Distribution) or large diversified production and distribution companies (e.g., Endemol Shine, Fremantle, essentially the non-independents);
• mid-sized competitors that, in some cases, have significant enough resources to compete against the major competitors (i.e. the large independents); and
• smaller competitors (i.e. the small independents) that tend to have a market specialization (e.g., documentaries or genre movies) but do not have the resources to compete against the large and mid- sized companies.
Kew is positioned near the top of the mid-sized pool of competitors, where it does not have the resources to take large risks with its capital and therefore tends to be relatively risk averse. Nevertheless, Kew is regarded highly within the industry by many of its peer suppliers and customers.
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Broadcast’s 2018 Distribution Survey, the definitive industry guide undertaken by a UK-based trade magazine, ranked TCB as number three overall and ranked KMD and TCB ninth and 11th, respectively, in the category of UK’s top distributors. KMD also ranked second in the categories of digital revenue and overall profitability while TCB ranked in the top ten in several additional categories including biggest increase in revenue, digital revenue and top investor in development. These results reflect Kew’s strong standing as a major player in the industry.
Global Reach
Kew trades globally and has primary offices in Los Angeles, London, New York, Sydney and Toronto. Kew’s acquisition and sales staff travel throughout the world, visiting all major territories and many smaller ones in search of acquiring product and making sales. Kew also has a presence at the world’s major content market events, including Berlinale, Marché International des Programmes (MIPTV), Marché International des Programmes de Communication (MIPCOM), Realscreen, National Association of Television Program Executives (NATPE), Discop, Cannes Films Festival and the American Film Market (AFM), amongst others.
Intellectual Property
Kew’s primary IP is the various rights that it either owns outright, or effectively controls through acquisition related to the content that it produces or distributes. Kew’s distribution library features over 6,000 active titles totalling over 13,700 hours of television, film and digital content in the distribution library.
Properties
Kew does not own any office properties. Instead, all of its office accommodation is leased on a normal commercial basis. Kew rents office space in London, Los Angeles, Sydney, Winnipeg, Dallas-Fort Worth and Toronto.
Legal Proceedings
Kew operates in a sector where litigation, threatened or actual, is sometimes a part of the business landscape. Kew has one long outstanding legal claim that has been dormant for several years and it does not believe the claim, if reconstituted, would be successful. It has no other material pending proceedings.
Employees
As at December 31, 2018, Kew had 171 employees, including employees at its offices in Toronto, London, Los Angeles, Sydney and New York and each of its production and distribution companies. Certain of Kew’s subsidiaries also retain individuals on a temporary contract basis, including directors, producers, cast and crew, with the appropriate skills and background as required for particular projects under development, or in production or post- production.
KEW’S DISTRIBUTION BUSINESS
Kew’s distribution business is comprised of two companies: KMD and TCB, both with headquarters in London, UK. KMD has a wide distribution remit, encompassing a wider range of genres including non-scripted, scripted, premium documentaries and feature films. TCB is a non-scripted specialist which operates as an acquirer and commissioner of non-scripted content working at the earliest possible stage in order to secure the best content to drive revenue. Collectively, these two companies provide comprehensive sales coverage of content for audiences across the globe. Both companies distribute product from the Kew group of production companies as well as third party providers. Notable KMD/Kew collaborations include Bristow Global Media’s non-fiction thriller series Haunted Hospitals and Paranormal 911, Frantic Films’ true crime series Killer In Plain Sight, Media Headquarters’ challenge and adventure series The Brigade, the compelling Divide and Conquer: The Story of Roger Ailes from Jigsaw Productions and Collins Avenues’ 10-part non-fiction series My Crazy Birth Story. TCB/Kew collaborations include World’s Biggest Mysteries with Our House Media and Sammy and Bella’s Kitchen Rescue from Essential Media. KMD and TCB operate
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independently from one another under individual company leadership and are each described below.
KMD
KMD is a leading international sales and distribution operation with offices in London, Los Angeles, and Toronto. Its library consists of over 11,000 hours of content including drama series, documentaries, non-fiction, children’s series, special events, TV movies, mini-series, feature films, and digital content, which are sold to traditional and digital platforms across the globe. Initially launched in 2002 as a film distribution division, the business was expanded in 2005 when CMC acquired the operations and assets of television production and distribution company Fireworks International from CanWest Global Communications Corporation.
KMD usually acquires long-term intellectual property (“IP”) rights (i.e. 15 to 30 years) for all territories and media, including digital outside of the pre-sales from the initiating buyer(s). The division distributes digital/internet-based programming and also exploits its existing library and third party programming on digital platforms.
KMD is led by President Greg Phillips in London and the sales team is led by Jonathan Ford, Executive Vice President Sales, Distribution. Other key executives include Vicky Ryan, Executive Vice President, Commercial Affairs, Jennifer Brinkworth, Executive Vice President, Marketing & Communications, Toby McCathie, Chief Financial Officer, Distribution and Carrie Stein, Executive Vice President, Global Scripted Series.
Leading television titles distributed by KMD include the multiple award-winning BBC drama Line of Duty, Emmy®- winner and multi BAFTA award-winning writer Jimmy McGovern’s BBC drama Care, Channel 5’s event drama Agatha and the Truth of Murder and ratings winning detective series Frankie Drake Mysteries (CBC).
KMD is also known for its distribution of premium documentary content including the Sundance smash hit Leaving Neverland (HBO and Channel 4), the Leonard Cohen documentary Leonard & Marianne: Words of Love, Nothing Like a Dame, featuring acting icons and Dames Eileen Atkins, Judi Dench, Joan Plowwright and Maggie Smith, and Alex Gibney’s award-winning Scientology and the Prison of Belief (HBO).
Customers
KMD has a diverse set of international buyers including traditional and newer digital platforms. Significant linear cable customers include ITV, BBC, Sony, Fox, Discovery Channel, Sky, Turner, Showtime, RAI, France TV, Arte, PBS, and HBO. As a preferred aggregator of content in selected territories for Netflix and Amazon and as direct participants in the Amazon Prime Video marketplace, KMD is also one of the leading digital distributors in the world.
TCB
TCB is a leading, London-based, full service content distribution company with a focus on non-scripted factual programming. It was established by Paul Heaney at MIPCOM in 2012 and now sells over 2000 hours of content to over 120 countries around the world. TCB’s mission is to identify production companies able to deliver strong creative properties and work with TCB to craft their ideas into shows and formats with global traction. TCB brings an international perspective to Kew’s production partners’ development pipelines, using its insight, commercial knowledge and contacts to open up key territories.
TCB is known for delivering tailored, market-ready, high-volume product to international buyers at an accelerated pace. Some of TCB’s best-selling titles include Abandoned Engineering (Discovery Science), Murder Made Me Famous (Reelz) and Bondi Rescue (Network Ten Australia), World’s Wildest Weather (Sky NZ), Easy Jet: Inside the
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Cockpit (ITV1) and Border Patrol (TV NZ). Using their broadcaster relationships, TCB briefs and commissions producers to make many of the shows above.
In addition to servicing its buyers, TCB is extremely well regarded by its peers. As well as TCB’s strong rankings in Broadcast Magazine’s 2018 Distribution peer poll survey noted above, they were also ranked the number one ‘favourite distributor to work with’ in 2018 Televisual’s poll of the top 100 Producers.
Customers
With an extensive international network of contacts and an in-depth understanding of the market and insider knowledge of what the global content community wants, TCB is a uniquely valuable partner in the ideas-creation and development process. TCB holds key producer, broadcaster and funder relationships across the globe. On the production side, TCB works with a range of established and respected production companies including Woodcut Media, Like A Shot, Middlechild and Arrow Media. Key broadcast relationships include Discovery Channels US and Discovery International, Channel Four, Channel Five, Nat Geo, Channel Seven, Channel Nine, SBS Australia, Smithsonian, RMC Decouverte, UKTV, VIASAT, Foxtel, AMC/CBS, Pro Sieben, Mediaset, Blue Ant Media and Sky.
KEW PRODUCTION COMPANIES
Details regarding each of Kew’s subsidiaries and joint venture entities are set out below.
ABOUT US CREATED PROJECTS
CONTACT US WORK WITH US
4East Media 4EASTMEDIA Business Overview
4East Media is a Toronto-based content creation company specializing in multi-platform content across the genres of lifestyle, reality, documentary, digital series and brand-affinity. Founded in 2018, 4East is helmed by industry veterans Sharone Ostrovsky, Sonya Roberts, Peter Esteves, and Liz West who bring together a complimentary skill set to create an exceptionally well-rounded team. 4East’s focus is on creating top-notch, talent-led, factual entertainment in all formats, viewable on all platforms, in order to tell the best stories to the most viewers.
Strategic Directions
With over 20 original concepts and highly curated options in active development for traditional television and OTT platforms, 4East is focused on developing a roster of content and formats that is international in appeal, as well as fostering international relationships to best leverage co-production and international sales opportunities. 4East has also developed a burgeoning digital and brand-affinity division that has focused on building strong relationships with various consumer, commercial and B2B brands and assist them in reaching key target demographics. 4East is actively producing a daily 90-minute magazine-style digital series for Midas Letter Live, a recognized digital provider of Canadian business news for alternative markets (cannabis, crypto, fintech and mining).
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Architect Films
Business Overview
Architect Films is a Toronto-based content creation company specializing in non-scripted, mass-audience, lifestyle programming which is sold internationally. Since entering the lifestyle content space six years ago, the company has successfully built brands in niche content areas, such as outdoor deck building with its series Decked Out (four seasons), Disaster Decks (three seasons) and Deck Wars (two seasons), as well as food competition with its series Fire Masters (two seasons), Donut Showdown (two seasons) and Sugar Showdown (two seasons). Architect Films was the producer of Playback Magazine’s 2016 “Specialty Hit of the Year” Home to Win, a top-rated design and renovation competition series that is now in its third season. Since 2010, Architect Films has produced nearly 160 hours of programming with 70% of the company’s series running for multiple seasons.
Core Strategy
Architect Films’ core strategy is developing and producing engaging and entertaining multi-platform lifestyle content, primarily for female viewers in the 25-54 age range. This is a coveted demographic for both broadcasters and advertisers. The company’s specialty is creating and producing content for the “home space” and the “food space”, areas in which it has had great success. Architect Films also develops and produces a range of content outside of these categories, such as Extreme Collectors, which is a series about people who collect odd objects.
Customers
Architect Films’ principal customers are Corus Entertainment Inc., the owner/operator of HGTV Canada, Food Network Canada, Blue Ant Media, the owner/operator of Cottage Life Television, Makeful Television and Scripps Networks LLC, the owner/operator of the Cooking Channel, HGTV, Food Network and several other popular television and internet brands in the United States.
Operations and Financing
Architect Films is a taxable, Canadian-controlled corporation with a permanent establishment in Ontario. Architect Films is and its production subsidiaries are, qualified to access both the Canadian Film or Video Production Tax Credit and the Ontario Film and Television Tax Credit. The company uses these tax credits, in whole or in part, to finance its productions. A small staff, together with modest corporate overhead costs and minimal investment in capital assets, allows the company to minimize its financial risk, regardless of the number productions ordered in any given year.
Tapping into its well-established broadcaster relationships, Architect Films obtains pre-sale financing for its productions and, where possible, makes territory sales with these broadcasters after production is complete. Architect Films manages all aspects of these licences. As the copyright owner of its productions, Architect Films also seeks out experienced worldwide content distributors to make sales in all other territories (and to manage those sales) on a traditional, commission-based basis. Many of Architect Films’ titles were distributed by Tricon Films & Television.
Since its entry into lifestyle programming, Architect Films has been profitable in every year, showing organic linear growth from the strength of its core business operations.
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Awesome Media and Entertainment
Awesome is a global creative incubator and above-the-line production company dedicated to the creation of compelling characters, engaging stories and immersive worlds. Founded by award-winning author and writer-producer Jeff Norton, Awesome holds the rights to over 30 novels and develops and co-produces adaptations ranging from pre- school to primetime. Originally founded around the rights in award-winning author Jeff Norton’s novels, Awesome has recently launched ‘Awesome Reads,’ its direct-to-consumer publishing imprint and increased its development slate of original material for television and optioning third-party IP. Kew is actively packaging scripted projects with Awesome on both sides of the Atlantic.
Original projects include Woodland, a co-production with Fiction Factory Films, about the search for the missing grandson of a Tolkien-like literary icon; Cortex, a high-tech police procedural about human memory hacking and Expat, a contemporary drama in development with Monumental Television. On the kids and family slate, Awesome recently announced the co-development of Stomp School with Cloth Cat Animation, based on Jeff Norton and Leo Antolini’s debut picture book. In addition, Vancouver-based OmniFilm, along with The Jim Henson Company, is adapting Norton’s upcoming book, Dino Knights, about a team of teenage knights riding on the backs of dinosaurs, as Knights of Panterra.
Bristow Global Media
Business Overview
Bristow Global Media is a Toronto-based content creation company producing multi-platform content across all genres including scripted, reality, documentary and sports. The company was launched in 2013 by veteran broadcast executive and producer Julie Bristow, whose 20 year career at the CBC included the creation of award-winning entertainment divisions, the launch of national digital media platforms and the stewardship of iconic sports brands. Right out of the gate, Bristow Global Media developed and produced several successful media properties including NHL Revealed: A Season Like No Other; Pressure Cooker in co-production with UK’s Fresh One, Jamie Oliver’s media company; three seasons of Hockey Wives and the globally successful historical adventure series format Canada: The Story of Us for the CBC
This has been another strong year for Bristow Global Media. The company delivered international history docudrama 100 Days to Victory, a ratings hit on the BBC and History Channel Canada & Foxtel Australia. Also launched to great success was children’s factual series, It’s My Party! for Ontario public broadcaster TVO, And, in partnership with KMD, Bristow Global Media produced Haunted Hospitals, 13 original hours of evergreen paranormal drama-documentary, being quickly followed in the new year by Paranormal 9-1-1, both for T + E Canada and US. The coming year will be equally busy, with second seasons of It’s My Party and Haunted Hospitals in production, as well as the landmark documentary special, Cleared for Chaos 9/11 for Discovery Canada and National Geographic International, a fascinating behind-the-scenes retelling of the complicated choreography required of Gander’s air traffic controllers on September 11, 2001.
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Strategic Direction
As a female-led company, Bristow Global Media brings a strong female first ethos to tell strong stories well. With premium factual content skewing to female audiences market-wide, Bristow Global Media’s capacity to develop and create strong co-viewing content gives the company a unique value proposition. Bristow Global Media’s focus on the production and development of high-quality television programs results in a consequential extension of the revenue generating life of the titles. Bristow Global Media maintains a focus on the growth of the business internationally, continuing to successfully leverage the Kew distribution and sales strength to put together new commissioning and production models for the international marketplace. Bristow Global Media has also made key hires in development and infrastructure allowing for vigorous activity targeting relationships with U.S. platforms.
Bristow Global Media is also building the children’s slate. The company creates daily, fresh and fun content for YTV, including The Zone. With the success of children’s series It’s My Party!, now in production on season 2, and the TVO- supported development of preschool series Backyard Beats, Bristow Global Media is building on this success and is in active discussions with partners worldwide to develop a range of children’s content.
The Business of Collins Avenue Productions
In November 2008, CMC founded Los Angeles-based Collins Avenue, a joint venture with leading U.S. factual entertainment producer, Jeff Collins, Chief Executive Officer of Collins Avenue. Jeff is an industry veteran; under his purview, more than 1,250 hours of television production has been completed. Jeff previously oversaw the U.S. office of September Films, serving as Show Runner for numerous long-running series, including the WE television hit Bridezillas. Jeff was also an Executive Consultant on The Pregnant Man, which was Discovery Networks’ highest rated show of 2008. Kew owns a 47.98% equity interest and a 50.5% voting interest in Collins Avenue. The investment has proven successful as Collins Avenue grew to over 30 hours of production commissions in 2011 and has averaged over 40 hours of annual commissions between 2012 and 2016. In particular Dance Moms has been a hit for Lifetime Television and has led to the creation of a franchise that includes the original Dance Moms, Dance Moms: Miami, Abby’s Studio Rescue and Abby’s Ultimate Dance Competition. The show is now in its eighth season. Other productions include Best House on the Block for HGTV, American Stuffers for Animal Planet, Meet the Hutterites for National Geographic Channel and The Devil Next Door for A&E. Collins Avenue is managed by founder and Chief Executive Officer, Jeff Collins, Chief Operating Officer, Michael Hammond and Lindsay Schwartz, SVP of Development and Business Affairs. 2019 is already proving to be successful for Collins Avenue with projects in development at Lifetime, Oxygen, Animal Planet, CBS, OWN, Snapchat and more.
Essential Media is one of Australia’s leading producers of high-quality screen content for both local and international audiences.
Formed in 2018 by the merger of two leading independent production companies with a presence in both North America and Australia – Essential Media and Entertainment and Essential Quail TV – Essential Media is headed by Executive Producers Chris Hilton, Greg Quail and Jesse Fawcett, and combines strong track records in both scripted and unscripted content.
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An award-winning multi-genre company, Essential Media produces documentaries, TV drama, feature films, factual series and lifestyle programming out of its Sydney head office and its North American offices in Los Angeles and Dallas-Fort Worth.
From Australia, Essential Media’s recent successes include the six part history series The Pacific with Sam Neill (Foxtel, Prime NZ, Ovation), three seasons of science adventure series Body Hack (Network Ten, Discovery), 4K TV series and feature film Living Universe (ABC, Arte France, Curiosity Stream & UKTV), feature documentary The Go-Betweens: Right Here (Winner Best Feature documentary at 2017 SPA awards), documentary series Afghanistan: Inside Australia's War, (winner of the 2016 NSW Premier's History Award Media Prize) and My Brother, The Serial Killer (Investigation Discovery). The company has been behind internationally acclaimed drama series such as Rake, Jack Irish, Doctor Doctor and the Disney movie Saving Mr. Banks starring Tom Hanks and Emma Thompson.
From the U.S., the company has produced top rating unscripted lifestyle programming including the Flip N Move franchise - the #1 rating show on DIY Network - Restored for DIY, Monster Cookie Builds for Cooking Channel and Mom & Me for HGTV.
Business Lines
Essential Media’s core mission is to inspire and entertain a global audience by uncovering the best stories and talent to create content that matters.
Building on specialist factual and lifestyle
Essential Media is building on the success of its international blue-chip factual productions (one-offs and returning series) for the international market and leverage pre-existing relationships with international broadcasters. It continues to update returning lifestyle series such as Texas Flip N Move and Gourmet Farmer (6 seasons and 2 spinoff series) while actively developing new formats and talent in this genre.
Building on Branded Content
Essential Media sees increasing opportunities in brand funded content for Australian and U.S. networks and recently hired a Commercial Partnerships manager to spearhead the company’s ongoing drive to secure sponsors and partnerships for a number of key factual and lifestyle titles.
Rebuilding a scripted slate
Following the sale of Essential Media’s scripted IP to FremantleMedia in 2017, the company relaunched a scripted division in 2018 with two key appointments and is actively developing a scripted slate, with a number of projects in paid 3rd party development and nearing production
Operations and financing
Essential Media makes use of the Australian Producers’ Tax Offset (20% of Australian spend for television), the Australian PDV Offset (30% of post-production and VFX spend) or US State based tax credits to leverage finance to retain rights or to increase margins.
Customers
Essential Media built its catalogue and reputation producing scripted and unscripted content for all the Australian networks (Ten, Nine, Seven, ABC, SBS) and continues to work with these clients as well as cablers Foxtel and online
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platforms. Partners outside Australia include BBC, UKTV, ITV, National Geographic, PBS, Discovery Networks, A+E, History Channel, Arte France, CuriosityStream, Netflix and Fox Network.
Frantic Films
Business Overview
Frantic Films is a Winnipeg and Toronto-based content creation company. Formed in 1997, Frantic Films has experience in a wide range of proprietary content, including documentary, factual, reality, drama, comedy and variety. Over nearly 20 years of operations, Frantic Films’ total library has grown to more than 650 hours of content that has been sold in over 100 countries worldwide. Some of Frantic Films' notable unscripted productions include Til Debt Do Us Part (over 100 episodes produced for Slice in Canada and CNBC in the U.S.), the Food Network series Pitchin’ In, Buy It Fix It Sell It and Backyard Builds (HGTV) and Guinea Pig (Discovery) among others. Notable comedy series include live to tape shows such as The Winnipeg Comedy Festival, scripted series including Todd and The Book of Pure Evil and Men with Brooms, prank shows such as Meet the Family and its hybrid comedy-factual series Still Standing (currently in its fifth season); and sketch series such as the Baroness Von Sketch Show (currently in its fourth season).
The company has been increasing production volumes and its development roster with a renewed organic growth focus. Frantic Films’ Senior Development Consultant in Los Angeles focuses on scripted development and U.S. initiatives in collaboration with Kew’s scripted team there. Frantic has also successfully collaborated with Collins Avenue on two unscripted projects that they have brought to U.S. networks together.
Business Lines
Frantic Films currently records its revenue in one of two categories: live action programming and releasing. It has seven productions that are currently either in production or that have been “greenlit” for production. Frantic Films distributes its content primarily through third party international distributors including KMD, eOne, Banijay and others. In addition to its success in Canada and the U.S., Frantic Films’ TV series, features and documentaries have sold around the world to over 130 countries.
Frantic Films also receives recurring music publishing income from its proprietary library.
Jigsaw Productions
In March 2012, Jigsaw was established as a partnership between Oscar-winning and celebrated filmmaker Alex Gibney and CMC, to produce award-winning documentaries and premium non-fiction television and dramatic series for leading international studios and networks including AMC, Amazon, HBO, Netflix, Hulu, CNN, Showtime, Universal, NatGeo, Sony, and A&E. Recent productions include Rolling Stone: Stories from the Edge on HBO, Zero Days, No Stone Unturned, Divide and Conquer: The Story of Roger Ailes and Alex Gibney’s latest feature, The Inventor, Out for Blood in Silicon Valley which had its world premiere at Sundance 2019. Episodic non-fiction series include Dirty Money, a six-part investigative series on Netflix that delves into corporate corruption and scandal; Parched on NatGeo; The New Yorker Presents, produced with Conde Nast and streaming on Amazon; and Sinatra: All or Nothing at All a four-hour mini-series on HBO. Recent non-fiction episodic productions include, highly acclaimed Salt, Fat, Acid, Heat based on Samin Nosrat’s book of the same name on Netflix, The Clinton Affair on A&E and Enemies: The President, Justice & the FBI on Showtime. Jigsaw’s first dramatic series, The Looming Tower, a 10-hour fiction series based on the book by Lawrence Wright, aired on Hulu in February of 2018. Alex Gibney’s
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past work includes Academy Award nominated Enron: The Smartest Guys in the Room, Client 9: The Rise and Fall of Eliot Spitzer, and The Blues with Martin Scorsese. Mea Maxima Culpa received an Emmy Award for Best Documentary Feature in 2013, Going Clear: Scientology and the Prison of Belief won the Emmy Award for Best Documentary in 2015, along with two other Emmy Awards; No Stone Unturned was nominated for a WGA Award in 2018, Zero Days received a Peabody Award in 2017, and Taxi to the Dark Side won an Academy award for Best Documentary in 2008. Alex Gibney and Jigsaw have, in total, won seven Emmy Awards, five Peabody Awards, two DuPont Awards, one Grammy Award and one Academy Award. Kew owns a 50.1% voting interest in Jigsaw.
Media Headquarters
Business Overview
Media Headquarters is a Toronto-based content creation company specializing in developing, producing, distributing and further exploiting multi-platform content rights across all genres, including scripted, factual lifestyle, reality, competition and documentary. Media Headquarters incubates original IP and raises financing for its content through domestic and international licensing. This IP includes original programming, particularly non-scripted, appropriate for worldwide audiences, as well as formats that are licensed for adaptation in foreign territories. Media Headquarters has been honoured for six years in a row by Realscreen’s ‘Global 100’ List, which celebrates the world’s best unscripted producers. Notable reality/lifestyle titles include top-rated productions and formats such as Canada’s Smartest Person Junior, Canada’s Smartest Person, Tessa & Scott and Outlaw In-Laws. Notable documentary series and features include the critically acclaimed series Modern Love, Emmy-nominated The Great Polar Bear Adventure and the feature film Souvenir of Canada. Beyond its core focus on unscripted programming, Media Headquarters also develops and produces scripted properties such as the award-winning miniseries The Summit. Media Headquarters’ diverse production capabilities leads to multiple revenue streams and access to a broad range of content markets.
Business Lines
Original IP Generation
Media Headquarters is a leading incubator of original IP, including original formats, which can be renewed seasonally by content buyers. The company develops innovative concepts to create value in the international marketplace. Media Headquarters’ ability to generate original ideas and develop these into successful commercial properties sets it apart from competitors who focus on licensing IP for production from third parties. Creating its own IP provides Media Headquarters with long-term revenue opportunities and provides a competitive advantage. The company is uniquely positioned in the unscripted format space, having created some of the most successful unscripted formats in the Canadian production sector, including Canada’s Smartest Person (“CSP”) and The Brigade: Race to the Hudson.
CSP is an unscripted format created, owned and managed by Media Headquarters. This format is a watershed production in the context of the Canadian media industry as an original Canadian unscripted network format that sees significant international licensing. To date, Media Headquarters has concluded 13 format deals, including in Germany, France, Sweden, Turkey and Argentina. The company is currently marketing the format in several new territories, including the United States and anticipates continued growth on the format.
In Canada, CSP is in its fifth cycle. CSP was the highest rated original Canadian reality format in its first season as measured by data provided by Numeris. In 2015, it was the recipient of a prestigious Golden Screen Award CSA nomination honouring the highest-rated reality programs in the country. Notably, the other four nominees in the category were adaptations of imported foreign formats. In 2018 Media Headquarters launched a spin-off of the CSP format Canada’s Smartest Person Junior (“CSPJ”). CSPJ has been nominated for three Canadian Screen Awards.
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Media Headquarters’ management continues to expand development of new unscripted formats, which is a growing part of its production pipeline. Media Headquarters’ robust development slate includes unscripted and scripted programs such as Spy Tactics, Foodtrepreneur, My Accessible Life, Untitled Theatre School Project, PopYoularity, and Pop Up Food Sensation. Media Headquarters also produces content for OTT platforms. For example, the company’s new docu-reality format Red Button takes a cutting-edge, interactive approach to storytelling, where subjects record their own stories with personal digital devices. The first season of Red Button was one of the most highly viewed documentary series on digital platforms in Canada. Media Headquarters is launching a second season of the series in the Summer of 2019.
Additionally Media Headquarters develops innovative and valuable digital media IP. As a complement to Canada’s Smartest Person, Media Headquarters developed the industry-leading digital project Canada’s Smartest Person Interactive (“CSPI”). CSPI allows users at home to play along with the challenges in the television broadcast, competing in real-time against family, friends and in-studio competitors, with instant live results. The CSPI app garnered over 200,000 downloads and over 1.2 million challenges have been played.
Library
Media Headquarters’ library of original content provides additional ongoing revenue opportunities through re- licensing of existing IP, as well as foreign adaptation.
Customers
Media Headquarters collaborates with and sells programming to a wide range of global broadcasters, distributors and third party producers. These are, in large part, comprised of international traditional and specialty cable/satellite television broadcasters. The cornerstone of Media Headquarters’ past successes and future growth is its network of relationships developed over 15 years with global content buyers, distributors and creators. From the world’s leading media companies to domestic broadcasters, Media Headquarters collaborates with a broad range of partners. As new media buyers emerge worldwide on new platforms, Media Headquarters’ reputation for producing innovative, trend- setting content positions the company for growth with these buyers.
Our House Media
Business Overview
Our House Media is a Toronto-based media company with offices in Los Angeles and London, focused on creating innovative, original formats, entertaining and returnable content with the highest production values for audiences in the United States, Canada, and beyond. Our House Media began operations in January 2014. The company secured a pilot with a U.S. network in its first month of operation and signed overall and development deals with three major North American broadcasters, which secured steady and guaranteed revenue streams for the company’s first two years of business. In its first 18 months, Our House Media secured “greenlights” with broadcast organizations including Scripps Networks Interactive, Inc., Discovery, AETN, Blue Ant Media Inc. and Corus Entertainment Inc. The company also invested heavily in infrastructure and now has 18 online and offline edits suites that make it a one-stop shop for all aspects of production and post-production. By the end of its fourth year of operation, Our House Media had commenced production on over 190 hours of production across 14 show brands, comprising three pilots/specials and 20 seasons of TV, for 19 different primary broadcast partners.
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Business Lines
Our House Media’s business is developing, producing and distribution rights for television programming, primarily focused on non-fiction reality, factual entertainment, docu-drama and documentary genres, such as the home and property space, food, history, true crime, paranormal, human interest documentary, general entertainment, transactional, collecting, celebrity and travel. Our House Media has the following integrated business lines:
• production (including, proprietary and production service);
• distribution of its proprietary content;
• music publishing; and
• format creation.
Production
Our House Media’s production strategy is based on the following primary pillars: (i) high quality series that are designed and created to run for multiple seasons; (ii) to own its own content through innovative co-financing models; and (iii) a diversity of territories from where key funding is derived. In Our House Media’s first four years of operation, lead broadcasters were more often from the U.S., than Canada. There are also projects in development from UK and Australian broadcast partners.
In fiscal 2018, Our House Media produced approximately 60 hours of content. The current production slate for 2019 includes Unboxed (Season 2), Forbidden (Oxygen, NBC), Killer Affair (Oxygen, NBC) Building Off The Grid (Season 2), Paranormal Survivor (Season 5), Silent Witness: Murder in Amish Country (Discovery ID).
Music Publishing
Our House Media owns the music for its productions in conjunction with Ole Media Management (“Ole”). Ole paid Our House Media an advance in order to compose, collect and then split royalties with Our House Media from music publishing payments made by broadcasters around the world. All broadcasters that air Our House Media productions in worldwide territories are required to pay royalties to the various collection societies around the world; Ole then collects these royalties. This will be a future source of modest revenue once the advance has been recouped by Ole.
Format Creation
Many of Our House Media’s shows, such as Home Chef to Pro Chef, are formats that can be sold overseas by third party distributors to generate revenue in addition to finished tape sales.
Customers
Our House Media has a unique core strategy of utilising its reputation for and ability to develop, create and own multi- episodic long-running content that is primarily financed from a combination of American, Canadian and British broadcaster license fees. After less than four years of operation, this geographical diversity has resulted in a programming customer base of 25 channels, with an active development customer base of 53 channels and potential customer base of more than 100 channels. Our House Media also develops and produces innovative digital content with key platform and broadcast partners.
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Sienna Films
Business Overview
Helmed by Jennifer Kawaja and Julia Sereny, Sienna Films is one of Canada's preeminent scripted content companies. Since 1992, the company has produced television series, feature films, movies for television, documentaries and digital media projects totaling over 100 hours of content for sale in the global marketplace. The company is known for its distinctive original content with diverse creators and filmmakers.
Business Lines
Television
Sienna Films’ current television includes the returning smash hit Cardinal, a serialized (6 x 1 hours) detective series for Bell Media, starring Billy Campbell and Karine Vanasse, currently in production on cycle four. Following the Canadian premiere of cycle one, the series and subsequent seasons were picked up all over the world including by BBC, Canal+, Hulu, SBS (Australia) and CMORE (Scandinavia). Also in production is season three of episodic procedural series Ransom, a Canada-Hungary co-production for CBS in the U.S. and Global Television in Canada, with Frank Spotnitz and eOne studios. Ransom airs in over 100 territories worldwide.
Previous television series include the 13-part Combat Hospital starring Elias Koteas, Michelle Borth and Luke Mably for Shaw, ABC and Sony International; Julian Fellowes-penned mini-series Titanic, a UK-Canada-Hungary co- production with lead Lookout Point, starring Toby Jones, Maria Doyle Kennedy and Jenna Coleman for ITV, Shaw Media and ABC; their successful Canada-UK-South Africa mini-series Diamonds, starring Judy Davis, Derek Jacobi and James Purefoy, for CBC, ABC and Antennae; and several TV movies including CTV movie One Dead Indian, winner of three Gemini awards, including Best Writing and Best Direction and the highest rated drama on Canadian television the night it aired.
Film
Upcoming for Sienna Films is Sweetness in the Belly, starring Dakota Fanning, Wunmi Mosaku, Yahya Abdul-Mateen II and Kunal Nayyar, directed by Zeresenay Mehari which they developed based on the bestselling novel by Camilla Gibb. Sweetness in the Belly will be released by eOne in Canada and sold by Hanway Films worldwide.
Previous releases include Irish-Canadian co-production Unless, starring Catherine Keener, based on the Pulitzer prize winning novel by Carol Shields (TIFF Special Presentation 2016); thriller The Cry of the Owl (Alliance), starring Paddy Considine and Julia Stiles; dance drama How She Move (Paramount Vantage/MTV Films, nominated Sundance Grand Jury Prize) starring Rutina Wesley; romantic comedy Touch of Pink (Sony Pictures Classics, Sundance Official Selection) starring Kyle MacLachlan; coming of age comedy New Waterford Girl (Alliance Atlantis, Official Selection Sundance, Rotterdam, winner TIFF Best Canadian First Feature), Saint Monica (Official Selection TIFF, winner Berlin Kinderfest, winner Best Film, Sarasota Film Festival); and I, Claudia (Mongrel Media, TIFF Official Selection, TIFF Canada’s Top Ten).
Digital Media
Sienna Films produces digital content including multiplatform franchise Riftworld, co-produced with First Love Films, which includes web series Riftworld: Chronicles for CBC.ca, digital comic series Riftworld: Legends and mobile game Riftworld: Heroes, with a one-hour television series also in development.
Customers
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As well as having strong co-producing partnerships internationally, Sienna Films works with a range of international stakeholders including broadcasters, distributors and production partners such as eOne, Mongrel Media, Bell Media, CBC, Corus Entertainment, TF1, RTL, ITV, CBS, ABC and Hanway.
Spirit Digital Media
Spirit Digital Media is a multi-award winning, next generation, multi-platform and audience-building company founded by CMC and ex-Endemol executives Peter Cowley and Matt Campion in 2010. Peter Cowley manages Spirit Digital Media as Chief Executive Officer with Matt Campion working closely with him as Creative Director. Peter was formerly Managing Director of Digital Media for Endemol UK and Global Head of Digital Programming at Endemol International. Peter is also a founder and director of Ad Tech Company and Connected Ventures Ltd. Matt is leading content producer for television, digital and social platforms. Digital is in Spirit Digital Media’s DNA – it understands new audience behaviours and the content they engage with. Spirit Digital Media produces “digital first content” for broadcasters and platforms such as Channel 4 and the BBC in the United Kingdom. The work Spirit Digital Media undertakes is borne out of data analysis, helping clients build strong, lasting on-line relationships. Spirit builds audiences through social media, distribution and syndication, it develops and creates content through on-line, mobile, television, live streaming and on demand video, apps and websites and it analyses digital and social activities to help its partners monetize the value in its brands. Recent broadcaster productions include Trigger Happy and Oh S**t I'm 30!. Recent branded content clients include Camelot / The UK National Lottery, Samsung, Sainsbury, L’Oreal, Banana Republic and Dominos through publisher partnerships, including StyleHaul, UNILad, The LADBible and Seven/C3. Spirit Digital Media also runs digital & social video channels and platforms for brands and partners, including the on-screen talent, such as Kevin Richardson, aka The LionWhisperer and Jamie Laing from Channel4’s Made In Chelsea. Spirit also runs a successful weekly Podcast series with Jamie Laing called Private Parts, which is regularly in the UK top 10 podcasts. Kew owns a 55% voting interest in Spirit.
DIVIDEND POLICY
The Corporation has not paid any cash dividends on its shares to date and does not intend to pay dividends in the foreseeable future. Voting Shares are entitled to dividends on an equal per share basis, if, as and when declared by the Board. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition and will be at the discretion of the Board.
DESCRIPTION OF CAPITAL STRUCTURE
General
The Corporation is authorized to issue an unlimited number of Variable Voting Shares, an unlimited number of Common Voting Shares and an unlimited number of Preferred Shares issuable in series each without nominal or par value.
For a complete description of our share capital, please refer to our certificate and articles of amendment, by-laws and the warrant agency agreement dated June 13, 2016 (the “Warrant Agreement”) between the Corporation and TSX Trust Company, as warrant agent (the “Warrant Agent”), which have been filed on SEDAR at www.sedar.com.
Shares
The holders of the Common Voting Shares and Variable Voting Shares are entitled to receive notice of and to attend any meeting of shareholders of the Corporation, to receive dividends if, as and when declared by the Board and to receive on a pro rata basis the remaining property and assets of the Corporation upon its dissolution or winding-up.
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The Common Voting Shares and Variable Voting Shares have identical economic attributes and are each entitled to one vote per Share, except where, in order to comply with the Canadian ownership and control requirements under the Broadcasting Act, the voting rights attached to Variable Voting Shares are prorated down to the extent non- Canadians hold, beneficially own or control 33 1/3% or more of the voting interests in Kew at any time or at any shareholder meeting.
On July 25, 2018, Kew received exemptive relief (the “Exemptive Relief”) from the securities regulatory authorities in each of the provinces and territories of Canada to allow Kew’s shareholders to treat the Common Voting Shares and Variable Voting Shares as a single class for the purposes of applicable take-over bid and early warning reporting rules and related news release and continuous disclosure requirements under Canadian securities laws. A copy of the Exemptive Relief is available under the Company’s profile on the SEDAR website at www.sedar.com.
Warrants
Commencing April 19, 2017, each Warrant entitles the registered holder to purchase one Class B Share at a purchase price of $11.50 per Class B Share. The Warrants will expire at 5:00 p.m. (Toronto time) on March 20, 2022 or may expire earlier upon Kew’s winding-up or if the expiry date is accelerated.
Kew may accelerate the expiry date of the outstanding Warrants by providing 30 days’ notice, if and only if, the closing price of the Class B Shares equals or exceeds $24.00 per Class B Share (as adjusted for stock splits or combinations, stock dividends, extraordinary dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period.
The right to exercise will be forfeited unless the Warrants are exercised prior to the date specified in the notice of acceleration of the expiry date. On and after the acceleration of the expiry date, a record holder of a Warrant will have no further rights.
The exercise price and number of Voting Shares issuable on exercise of the Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend, or our recapitalization, reorganization, merger or consolidation. The Warrants will not, however, be adjusted for issuances of Voting Shares at a price below their exercise price.
Warrants may be exercised only for a whole number of shares. No fractional Voting Shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a Common Share, we will, upon exercise, round down to the nearest whole number of Voting Shares to be issued to the Warrant holder.
The Warrant holders do not have the rights or privileges of holders of Voting Shares or any voting rights until they exercise their Warrants and receive corresponding Voting Shares. After the issuance of corresponding Voting Shares upon exercise of the Warrants, each holder will be entitled to one vote for each Common Share held of record on all matters to be voted on by shareholders. On the exercise of any Warrant, the Warrant exercise price will be $11.50, subject to adjustments as described herein.
The Warrant Agent shall, on receipt of a written request of the Corporation or holders of not less than 25% of the aggregate number of Warrants then outstanding, convene a meeting of holders of Warrants upon at least 21 calendar days’ written notice to holders of Warrants. Every such meeting shall be held in Toronto, Ontario or at such other place as may be approved or determined by the Warrant Agent. A quorum at meetings of holders or Warrants shall be two persons present in person or represented by proxy holding or representing more than 20% of the aggregate number of Warrants then outstanding.
From time to time, the Corporation and the Warrant Agent, without the consent of the holders of Warrants, may amend or supplement the Warrant Agreement for certain purposes including curing defects or inconsistencies or making any change that does not adversely affect the rights of any holder of Warrants. Any amendment or supplement to the Warrant Agreement that adversely affects the interests of the holders of Warrants may only be made by an “extraordinary resolution”, which is defined in the Warrant Agreement as a resolution either (i) passed at a meeting of the holders of Warrants by the affirmative vote of holders of Warrants representing not less than two-thirds of the
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aggregate number of the then outstanding Warrants represented at the meeting and voted on such resolution, or (ii) adopted by an instrument in writing signed by the holders of Warrants representing not less than two-thirds of the aggregate number of the then outstanding Warrants.
MARKET FOR SECURITIES
Trading Price and Volume
The Class B Shares commenced trading on the TSX under the symbol “KEW” on March 23, 2017 and the Variable Voting Shares and Common Voting Shares were substituted for trading on the TSX on June 19, 2018 under the single ticker symbol “KEW”. The Warrants are listed for trading on the TSX under the symbol “KEW.WT”.
The monthly high and low trading prices, the average daily volume and total volume by month for the shares trading under the symbol “KEW” for each month of fiscal 2018, are as follows:
Avg. Daily Vol. Total Vol. by High Low by Month Month Month ($ per share) ($ per share) (in shares) (in shares) January 9.15 8.30 6,697 147,341 February 8.90 8.14 10,970 164,546 March 8.40 7.25 6,807 115,721 April 7.73 5.95 26,508 556,666 May 7.01 5.51 32,262 709,769 June 7.97 6.74 27,043 567,905 July 7.71 7.01 5,048 95,915 August 7.46 6.50 12,464 274,197 September 7.84 6.60 28,828 547,725 October 7.12 5.83 4,483 98,624 November 7.00 5.60 7,118 149,477 December 6.01 4.50 5,131 92,359
The monthly high and low trading prices, the average daily volume and total volume by month for the Warrants for each month of fiscal 2018 are as follows:
Avg. Daily Vol. Total Vol. by High Low by Month Month Month ($ per warrant) ($ per warrant) (in warrants) (in warrants) January $1.47 $1.12 4,880 24,400 February $1.20 $0.80 2,753 41,300 March $0.86 $0.86 550 1,100 April $0.82 $0.48 1,757 12,300 May $ 0.50 $0.35 10,722 96,500 June $0.80 $0.47 9,627 105,900
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Avg. Daily Vol. Total Vol. by High Low by Month Month Month ($ per warrant) ($ per warrant) (in warrants) (in warrants) July $0.93 $0.80 5,450 10,900 August $0.75 $0.58 7,600 53,200 September $0.56 $0.40 20,150 201,500 October $0.56 $0.50 2,333 7,000 November $0.65 $0.40 1,400 5,600 December $0.55 $0.50 1,775 3,550
ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER
Except as set out below, to the knowledge of Kew, as of the date hereof, no securities of any class of Kew are held in escrow or subject to contractual restrictions on transfer.
Number of securities that are subject to a contractual restriction on Designation of Class transfer(1) Percentage of class Variable Voting Shares or 1,916,823(1)(2) 14.01% Common Voting Shares
______Notes: (1) Includes: (i) 115,141 Voting Shares issued to the vendors of TCB that are subject to lock-up, to be released on January 1, 2022, or at such earlier date in accordance with the terms of the TCB lock-up agreement, (ii) 43,271 Voting Shares issued to the vendors of Sienna that are subject to lock-up and holdback, to be released on November 13, 2019, and (iii) 1,249,536 Voting Shares issued to the vendors of Essential Media that are subject to lock-up and holdback, to be released as follows: 1/3 are to be released on July 23, 2019, 1/3 are to be released on January 23, 2020 and the remaining 1/3 are to be released on July 23, 2020. (2) In addition to the foregoing transfer restrictions and pursuant to the Forfeiture and Transfer Restrictions Agreement and Undertaking (as hereinafter defined), the Founders agreed that 25% of the Founders’ Shares held by each of the Founders would be subject to forfeiture by the Founders on the fifth anniversary of Closing unless the closing share price of the Voting Shares exceeds $13.00 (as adjusted for stock splits or combinations, stock dividends, extraordinary dividends, reorganizations and recapitalizations) for any 20 trading days within a 30- trading day period at any time following the Closing. The Founders’ Forfeiture Shares will be subject to additional transfer restrictions until the foregoing $13.00 closing Common Share price forfeiture condition is satisfied. See “Material Contracts – Forfeiture and Transfer Restrictions Agreement and Undertaking”.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
To the knowledge of the Corporation, as of the date hereof, no person or company beneficially owns, or controls or directs, directly or indirectly, more than 10% of any class or series of the voting securities of the Corporation.
The Corporation and certain of its shareholders are parties to certain voting support agreements (the “Voting Support Agreements”). As of the date of this AIF, Kew’s shareholders who are party to the Voting Supports Agreement hold, in aggregate 1,249,536 Voting Shares, representing approximately 9.13% of the issued and outstanding Voting Shares. Pursuant to each Voting Support Agreement, the Kew shareholder party thereto has agreed not to vote against (or withhold from voting in respect of) or to take any actions which have the effect of voting against any resolutions that the Board or management of Kew recommend for approval by Kew’s shareholders. The Kew shareholders party to the Voting Support Agreements otherwise continue to exercise full discretion over all decisions regarding their securities of Kew.
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DIRECTORS AND OFFICERS
Name, Address, Occupation and Security Holding
The Board is comprised of ten directors. The directors of Kew are elected by shareholders at each annual meeting of Kew’s shareholders and all directors will hold office for a term expiring at the close of the next annual meeting or until their respective successors are elected or appointed and will be eligible for re-election or re-appointment.
The following are the names and municipalities of residence of our directors and executive officers, their positions and offices with the Corporation, their corresponding start dates and their principal occupations during the last five years, other than as described below:
Name and Director and/or municipality of Office held with the Executive Officer Present principal occupation and residence Corporation Since positions held Steven Silver Director and Chief November 3, 2015 Director and Chief Executive Toronto, Canada Executive Officer Officer of Kew Peter Sussman Director (Chair) and November 3, 2015 Director (Chair) and Executive Toronto, Canada Executive Chairman Chairman of Kew Geoffrey Webb(1) Chief Financial Officer March 20, 2017 Chief Financial Officer and London, United Director of Kew Kingdom Erick Kwak Executive Vice President March 20, 2017 Head of Legal and Business Affairs Los Angeles, United and Head of Business and of Kew States Legal Affairs Madeleine Cohen Vice President, Operations March 20, 2017 Vice President, Operations & Toronto, Canada & Corporate Secretary Corporate Secretary Julie Bristow Director March 20, 2017 President of Bristow Global Media Toronto, Canada David Fleck(2) Director June 13, 2016 Partner and Senior Vice President Toronto, Canada of C.A. Delaney Capital Management Ltd. Maurice Kagan(2) Director November 3, 2015 President of Canal Group Toronto, Canada Patrice Merrin(2), (3) Director March 20, 2017 Non-Executive Director of Toronto, Canada Glencore plc Stephen Pincus Director March 20, 2017 Senior Partner at Goodmans LLP Toronto, Canada Mark Segal(3), (4) Director March 20, 2017 Executive Vice President Finance Toronto, Canada and Chief Financial Officer at Spin Master Corp. John Schmidt Director March 20, 2017 Non-Executive Director of Kew New York, United States Nancy Tellem(3) Director June 13, 2017 Executive Chairman and Chief Los Angeles, United Media Officer of Interlude Ltd. States (1) Mr. Webb assumed the role of Chief Financial Officer of Kew on Closing. Mr. Webb’s predecessors were Marc Hirshberg (February 3, 2017 to Closing) and Maurice Kagan (November 3, 2015 to February 3, 2017). (2) Each of Mr. Fleck (Chair), Ms. Merrin and Mr. Kagan are members of the Audit Committee of the Board.
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(3) Each of Mr. Segal (Chair), Ms. Merrin and Ms. Tellem are members of the Compensation, Governance and Nominating Committee of the Board. (4) Mr. Segal has been a Founder since November 4, 2015.
As of December 31, 2018, as a group, the directors and executive officers owned an aggregate of 1,770,705 Voting Shares, representing approximately 14.21% of the Voting Shares issued and outstanding. As of the date hereof, as a group, the directors and executive officers owned an aggregate of 1,770,705 Voting Shares, representing approximately 14.21% of the Voting Shares issued and outstanding.
The following are brief biographies of the directors and officers of the Corporation:
Directors
Steven Silver Years of Experience: 17 years
Steven Silver is a Co-Founder of Kew and its Chief Executive Officer. Prior to starting Kew, Steven was a Partner and Co-founder of the Blue Ice Group, a majority shareholder in several companies, including Blue Ice Pictures and Out of Africa Entertainment Inc. The Blue Ice Group also partnered with Los Angeles-based Echo Lake Entertainment to form the financing fund, the Blue Lake Media Fund. In 2005, Blue Ice Group acquired a significant equity stake in Barna-Alper Productions Inc. Steven served as Vice President and then President of Barna-Alper Productions Inc. from 2005 to 2009, when it was sold to eOne. Following the sale, Steven spent a year as head of Factual Entertainment for eOne.
Steven is also an Emmy-nominated executive producer, and a producer and director of countless hours of television series and numerous feature films.
Peter Sussman Years of Experience: 32 years
Peter Sussman is a Co-Founder of Kew and its Executive Chairman. Prior to starting Kew, he co-founded Aver Media Finance, a global media financier primarily for producers and distributors of television programs and theatrical feature films. Aver Media Finance was sold in 2013 to Bank of Montreal. Prior to co-founding and acting as Executive Chairman of Aver Media Finance, Peter was a co-controlling voting shareholder of Alliance Atlantis and Chief Executive Officer of its Entertainment Group.
For more than 30 years, Peter participated in the worldwide financing, production and distribution of motion pictures and television shows, amounting to thousands of hours of content. Peter capped off his years as a multi-award winning producer by assembling and launching, in partnership with CBS, the CSI Television Franchise comprising CSI: Crime Scene Investigation, CSI: Miami and CSI: New York. He has also been personally nominated for three Golden Globe Awards and four Emmy Awards.
Julie Bristow President and CEO, Bristow Global Media Years of Experience: 22 years
Julie launched Bristow Global Media in 2013 and with her creative vision and business savvy, the company has grown exponentially in just a few years. BGM produces premium content for the international market in all genres on multiple platforms. From beautifully stylized returning series like Haunted Hospitals (Travel US/ T&E Canada) and tentpole drama-documentary specials like 100 Days to Victory (Foxtel/ BBC/History Canada), to children’s factual series like It’s My Party! (TVO), Julie specializes in thoughtfully-crafted quality storytelling delivered to market quickly. Additional series include NHL Revealed: A Season Like No Other (CBC, NBCSN, Rogers), Pressure Cooker (W Network), Hockey Wives (W Network), Canada: The Story of Us (CBC), Canadian Country Music Association’s CCMA Awards (CBC and CMT), Pardon My French (YouTube), The Zone (YTV, YouTube) and Corus’ brand-driven kids’ content and programming specials (YTV, TELETOON, Nickelodeon Canada).
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Prior to launching BGM, Julie held the position of Executive Director of Unscripted content at the Canadian Broadcasting Corporation. As the CBC’s Executive Director of all things unscripted, Julie oversaw much of this millennium’s most meaningful and successful CBC programming. Content planning for the Sochi Olymics, programming for the iconic sports brand Hockey Night in Canada and entertainment hits like Dragons Den are just some of the shows that were in her portfolio. During her tenure, Julie spearheaded the creation of thousands of hours of original content, found novel and exciting ways to reach new audiences and garnered multiple industry and business awards.
In 2017, BGM became part of the Kew Media Group and Julie took a position on the board. In addition to her board position at Kew, she sits on the board of some of the most influential domestic and international associations including the Academy of Canadian Cinema and Television and The Canadian Centre for Ethics in Sport. Julie holds a graduate degree in international relations from the School of Social Studies at the University of Chicago. Julie volunteers her time to charitable organizations focused on addiction and mental health.
David Fleck Years of Experience: 27 years
David Fleck has been a Partner and Senior Vice President with C.A. Delaney Capital Management Ltd. since he joined the company in 2014. David is responsible for business development and is part of the client relationship management team.
David has spent over 25 years in the investment industry, most recently as President and Chief Executive Officer of Macquarie Capital Markets Canada Ltd., a global investment bank that offers debt and equity financing services and advises on mergers & acquisitions to an extensive and diverse client base. Prior to this time, he was former Executive Managing Director and Co-Head of Equity Products of BMO Capital Markets. David is a director of Alamos Gold Inc. and has served as a director of a number of Canadian based charities. He is currently Vice-Chair of Soulpepper Theatre Company and a board member of the Art Gallery of Ontario Foundation. He received his MBA from INSEAD and completed the Institute of Corporate Directors program at the Rotman School of Management.
Maurice Kagan Years of Experience: 31 years
Maurice Kagan is President of the Canal Group of real estate companies. Prior to this time, he was Chief Executive Officer of Sparkle Solutions Corporation, a laundry route operator that serviced laundry machines throughout Canada, particularly in the multi-residential housing industry in Ontario. In 2013, Sparkle Solutions was sold to Coinmach Corporation, a US based laundry operator that manages over one million machines throughout the United States. In 1998, Maurice spearheaded the launch of Residential Equities Real Estate Investment Trust (“ResREIT”), which raised in excess of $197 million in its initial public offering. While with ResREIT, as Chief Financial Officer, Maurice also led ResREIT’s raising of additional capital, enabling it to expand its portfolio and purchase assets across Canada. In 2005, ResREIT was sold to Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN), following which Maurice stayed on and assisted with the transition.
Maurice also serves as a Director of Pure Family REIT (TSXV:RUF.UN), Cliffside Capital (TSXV: CEP) and Atrium Mortgage Investment Corp (TSX: AI). He was formerly a Director and Chair of the Audit Committees of LoneStar West Inc. (TSXV: LSI) and Carfinco Financial Group Inc. Carfinco Financial Group Inc. (TSX: CFN) was sold to Santander Bank in March 2015 for over $298 million. Lonestar was sold in 2017.
Maurice has Bachelor of Commerce from the University of Cape Town, Certificate in the Theory of Accountancy and also qualified as a Chartered Accountant in South Africa in 1981. Maurice has significant experience in start-ups and in the public sector, as well significant knowledge of the debt and equity markets in Canada.
Patrice Merrin Years of Experience: 42 years
Patrice E. Merrin is an independent Non-Executive Director of Glencore plc and Samuel, Son & Co. She was a Non- Executive Director of Stillwater Mining Company and Novadaq Technologies Inc. She was Chairman of the board of
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directors of CML HealthCare Inc., a former President and Chief Executive Officer of Luscar Ltd., Canada’s largest thermal coal producer and former Chief Operating Officer of Sherritt International Corporation, a Canadian diversified miner. Patrice was also formerly a Director of Enssolutions, a mine tailing solutions company and of NB Power.
Patrice is co-Chair of the Leadership Council and a director of Perimeter Institute for Theoretical Physics. She is also a director of Samara Canada, which promotes citizen participation in civic life in order to strengthen our democracy. She has served as a director of many non-profit organizations including Ornge, the Province of Ontario’s medical transport service and the Toronto Public Library Foundation. She has been an appointee to Alberta’s Climate Change and Emissions Management Corporation (2009-2014), the National Round Table on the Environment and the Economy (2003-2006) and the Government of Canada’s Natural Resources Ministry’s Expert Panel on Energy Science and Technology (2005-2006).
Early in her career, Ms. Merrin worked in Ottawa as Special Assistant to the Honourable Marc Lalonde, P.C., M.P. during his time as Minister of Health and Welfare, Federal-Provincial Relations and Justice, all the while being Minister Responsible for the Status of Women as well.
Patrice is a graduate of Queen’s University and completed the Advanced Management Program at INSEAD.
Stephen Pincus Years of Experience: 31 years
Stephen Pincus is a Senior Partner at Goodmans LLP, a member of its Executive Committee and Chair of its Capital Markets Group. He has an extensive practice in mergers and acquisitions, corporate finance and corporate governance. Stephen is widely recognised as one of Canada’s leading lawyers and has played a pioneering leadership role in the development of Canada’s capital markets.
Stephen is the Founding Chairman of The Canada Africa Chamber of Business, a member of the Corporate and Securities Advisory Board for Practical Law – Canada and author of The Canadian REIT Handbook. He has an M.B.A., LL.B. (Osgoode, Gold Medalist) and ICD.D.
Mark Segal Years of Experience: 27 years
Mark Segal is Executive Vice President and Chief Financial Officer at Spin Master Corp., where he leads Spin Master Corp.’s global finance team. Mark was Chief Financial Officer of Spin Master from 2001 to 2011 and rejoined in 2015. Since this time, Spin Master recently successfully completed its initial public offering. Prior to re-joining Spin Master, Mark was VP Finance and Chief Financial Officer at Husky Injection Molding Systems, a supplier of injection molding equipment and services to the plastics industry, from 2013 to 2015, and Chief Operating Officer at Canada Goose Inc., a producer of extreme weather outerwear, until 2013. Mark is an accomplished executive with extensive global financial and operations experience in entrepreneurially driven public and private companies at both the operating and board level.
Mark has broad global industry knowledge of the branded consumer goods, retail, manufacturing and capital equipment sectors. He is bottom-line focused, with a proven track record of playing a pivotal role in value creation, building a scalable platform for profitable global growth, integrating businesses, achieving operating efficiencies and guiding systems development. Mark has deep experience in U.S. and Canadian debt and equity capital markets, mergers & acquisitions and treasury operations in both public and private companies and is adept at integrating capital allocation and liquidity-planning processes to achieve growth and sustainable competitive advantage.
Mark has a Bachelor of Commerce., Bachelor of Accounting and MBA from Witwatersramd University in South Africa.
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John Schmidt Years of Experience: 32 years
John Schmidt has over 30 years of experience building, acquiring and developing successful businesses in the media marketplace. John founded Content Media Corporation (now re-branded Kew) in 2001 and served as its Chief Executive Officer until stepping down from this role in November 2017. He managed the company through its initial stage of film production, acquired the Fireworks library, built the company’s television and digital businesses and successfully sold to Kew in 2017. He also identified and led the start-up or acquisition of Campfire Film & Televsion LLC, Collins Avenue, Jigsaw Productions and Spirit Digital Media, now part of the Kew group. Prior to CMC, John co-Founded and served as co-President of October Films from 1992 to 2000. October Films was a leading distributor and producer of independent theatrical feature films and was acquired by Universal Pictures and renamed Focus Features. John was the Chief Financial Officer of Miramax Films from 1989-1992 and a Financial Analyst at Tri-Star Pictures from 1986-1989. Prior to that, he worked as a documentary film producer and journalist at ABC News. John received an MBA from Harvard Business School in 1986 and graduated from Yale University in 1977.
Nancy Tellem Years of Experience: 39 years
Nancy Tellem is Executive Chairman and Chief Media Officer of Interlude Ltd., an interactive video platform that creates new forms of digital storytelling. She was formerly the President of Entertainment and Digital Media at Microsoft Corporation from September 2012 to October 2014. Prior to that time, Nancy served as President of CBS Network Television Group, where she oversaw the network’s entertainment operations.
Nancy holds several board and advisory positions on digital and media-related companies including All3Media Group, Bedrocket Media Ventures, Inc., Interlude Ltd., Shopkick, Inc., Stardoll Media and [212]Media.
Earlier in her career, Nancy worked on Capitol Hill, served as Assistant General Counsel for Columbia Television, Senior Vice President of Business Affairs at Lorimar Television and Executive Vice President for Business and Financial Affairs for Warner Bros. Television.
Nancy received her J.D. from the University of California Hastings College of the Law and her Bachelor of Arts degree from the University of California, Berkeley.
Executive Officers
Steven Silver Years of Experience: 17 years
See “Directors and Officers – Name, Address, Occupation and Security Holding – Directors” sub-heading above.
Peter Sussman Years of Experience: 32 years
See “Directors and Officers – Name, Address, Occupation and Security Holding – Directors” sub-heading above.
Geoffrey Webb Years of Experience: 27 years
Geoffrey (Geoff) Webb trained as a Chartered Accountant with Price Waterhouse Australia and qualified in 1990. Initially he worked in their audit division until moving to the corporate finance division, where he also qualified to become a Member of the Securities Institute of Australia.
Geoff moved to the United Kingdom in 1990 and up to 2003 held various accounting and consulting positions including at the Jardine Matheson group of financial services companies and Bankers Trust. Geoff used this expertise to consult in both the financial services and media sectors. He began with Content Media Corporation (CMC) in 2003,
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working through the company’s original reverse merger with Winchester Entertainment. After the reverse merger, Geoff was appointed as Group Financial Controller and then Group Chief Financial Officer and Company Secretary in December 2004. Geoff held this position from 2004 to 2017 and worked through the various corporate deals that saw Content grow significantly and expand from pure distribution into production. Geoff became Chief Financial Officer of Kew as of the Closing and has taken a leading role in the company’s multi-faceted finance, banking, corporate development and other operations.
Erick Kwak Years of Experience: 24 years
Erick (Rick) Kwak expanded his role to Kew following the Closing. Rick oversees all the legal work for Kew’s needs, particularly its credit facilities and significant production, acquisition and distribution agreements for the company’s films and television programs. In addition to oversight of Kew’s legal and business affairs functions, Rick is involved in the company’s corporate strategy and operations.
Rick was previously the EVP of Legal and Business Affairs at CMC, having started as its Executive Vice President and Head of Worldwide Business Affairs in 2004. Prior to joining CMC, Rick was Executive Vice President at Franchise Pictures and an associate at Proskauer Rose, LLP. He is a graduate of Georgetown Law School.
Madeleine Cohen Years of Experience: 10 years
Madeleine is integral to Kew’s strategic planning and operations and is responsible for the company’s corporate governance, board relations and its day-to-day running. She has been with the company since its inception and contributed to every stage of its growth. With a diverse background in management and content production, she has worked in both the private sector and non-profit including at the Blue Ice Group and Women in Film and Television – Toronto (WIFT-T). Ms. Cohen has also worked on a range of award-winning documentary and narrative projects as producer, director, researcher and writer which have been broadcast on major North American networks and played in festivals internationally. She is the bboard chair of acclaimed immersive theatre company Outside the March.
Other Professionals who Contribute time to Kew
Marc Hirshberg Years of Experience: 21 years
In addition to our Board and management, Marc Hirshberg, the Chief Executive Officer and President of EVRA Media Solutions Inc. (“EVRA”), has acted in an advisory capacity to Kew, lending his considerable financial analysis and business optimization skills to its strategic planning and operations. EVRA has a proven track record of providing high-level clients with both short and long-term business solutions, with particular emphasis on the monetization of films, financing strategies, restructuring and mergers and acquisitions. Mr. Hirshberg served as Chief Financial Officer of Kew from February 3, 2017 until the Closing.
Complementary Management Team
The following individuals complement Kew’s management team.
Julie Bristow President, Bristow Global Media
See “Directors and Officers – Name, Address, Occupation and Security Holding – Directors” sub-heading above.
Jamie Brown Chief Executive Officer and Executive Producer, Frantic Films
Since joining in 2000, Jamie has led Frantic to become one of Canada’s leading content creators, gaining recognition
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for its creative efforts and business success.
Jamie is the creator, producer and executive producer of many successful and award-winning projects. He created and produced Pioneer Quest, the first “living-history” program in North America, which went on to set numerous ratings records. He has created or co-created over a dozen series and is responsible for producing hundreds of hours of original content, including TV movies and mini-series, feature films, lifestyle programs and documentaries.
Jamie began his career as a lawyer with the Toronto law firm McMillan LLP, where he focused on corporate finance and entertainment law. He also worked as Director of Business and Legal Affairs at Sullivan Entertainment Group and later Nelvana Ltd. He began his producing career at Credo Entertainment Corporation in 1998, where he worked on features, series and documentaries.
Recognition for his work includes being the first recipient of the Lionsgate Innovative Producer Award, being named one of Canada’s Top 40 Under 40, receiving the I.H. Asper Broadcast Entrepreneur of the Future Award and being named the CFTPA’s Entrepreneur of the Year. Among his many creative awards are Canadian Screen Award, Gemini, Banff Rockie and Golden Sheaf awards. He is the Past-Chair of the Board of the Canadian Media Producers Association and has been Chair of Canada’s National Screen Institute and Onscreen Manitoba.
Robert Cohen Chief Executive Officer and Executive Producer, Media Headquarters
With 21 years of experience in the television and digital media industry, Robert is recognized as one of the Canada’s leading producers of popular original content. He specializes in the creation of unscripted series and formats as well as scripted programming. Some of Robert’s successes as a creator, producer and director include the hit international formats Canada’s Smartest Person and Outlaw In-Laws, reality series Tessa & Scott and Modern Love, multiple award-winning dramatic miniseries The Summit, Emmy-nominated family movie The Great Polar Bear Adventure and popular feature documentary Souvenir of Canada, among many other titles.
Robert co-founded Media Headquarters and supervises the company’s production and development slate. He collaborates with a wide range of broadcast and distribution partners worldwide and his programs have aired on dozens of networks and earned multiple international nominations and awards.
Robert is a member of the Academy of Television Arts and Sciences, the Canadian Media Production Association, and the Canadian Academy of Recording Arts and Sciences.
Jeff Collins Founder and CEO, Collins Avenue
Jeff Collins is President of Collins Avenue, the eponymous company he founded in 2008. He also serves as Executive Producer on the hit Lifetime series Dance Moms and its spinoff series and specials and he also serves as on-air host of the popular franchise’s reunion shows. He has helmed such shows as Best House on the Block for HGTV, The Devil Next Door for A&E, and American Stuffers for Animal Planet.
An industry veteran with more than 1,250 hours of television production completed under his purview, Jeff previously oversaw the U.S. office of September Films, serving as Show Runner for numerous long-running series, including the WE Television hit Bridezillas. He served as Executive Consultant on The Pregnant Man, Discovery Networks’ highest-rated show of 2008.
Jeff began his career in non-fiction and informational programming, producing more than 500 hours of documentary, news and talk content. He went on to produce the prestigious Intimate Portraits series for Biography, then served as Producer on the long-running series Leeza. Jeff was named Vice President of Leeza Gibbons Enterprises, where he had oversight of hundreds of hours of talk, documentary and specials programming.
Peter Cowley
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Founder and CEO, Spirit Digital Media
Peter Cowley is Founder & CEO of Spirit, a company he started with partner Matt Campion in 2010. Spirit is a multi- platform production and audience building company specializing in branded content, short form content for broadcasters and running and operating digital channels and platforms.
Previous to Spirit, Peter was Managing Director of Digital Media for Endemol UK and global head of original digital programming at Endemol International. Peter has spent his career in content, internet portals and access at Freeserve / Orange, marketing at Videotron / Cable & Wireless, now Virgin Media and advertising at BBH.
Peter is also the founder and director of Ad Tech company, Connected Ventures Ltd, a non-executive director at Dynamic Ad Insertion company Yospace and a mentor for Ascension Media, a seed investment company.
Samantha De France Chief Operating Officer, Our House Media
Samantha De France joined Our House Media in March 2014. She is currently Chief Operating Officer. In this role, Samantha is Our House Media’s key liaison between the company’s production, development, financial, legal, accounting and communications teams. Previously, Samantha worked at Cineflix Productions as Director of Programming and Development, where she worked closely with the senior executive teams and dealt directly with broadcasters and talent agents. Prior to that time, she worked as an executive producer and developed talent, managed client relations and oversaw creative materials through to production for agencies, including J. Walter Thompson USA LLC, Young & Rubicam Group and Taxi Toronto (part of Young & Rubicam Group).
Peter Esteves Head of Production, 4East Media
For 20 years, Peter has been working behind the lens. His broadcast work has been viewed on major networks worldwide including Discovery Channel, National Geographic Channel, HBO, The Movie Network, W Network, Outdoor Life Network, PBS, Travel + Leisure amongst others. Peter has filmed and directed adventure, culture and travel all over the world including documentary features, television series (documentary, factual, travel, docu-soap). Peter has also story produced and directed Discovery Channels primetime hit series, Heavy Rescue 401 and was the series director for Discovery Channel’s Hellfire Heroes.
Joseph Houlihan President and Co-Founder, Our House Media
Joe has a track record of creating, selling and producing hugely successful television shows in the UK, USA and Canada. Before co-founding Our House Media in early 2014 with Simon Lloyd, Joe worked as Executive Vice President of Programming at Cineflix Productions. His projects included, among others, Property Brothers, Buying and Selling, Food Factory, Dinner Party Wars and My Teenage Wedding. Prior to that time, Joseph was Director of Programs at Twofour Broadcast Ltd. There, he oversaw shows, including, Are You Smarter Than a 10 Year Old? and Design For Life with Philippe Starck. Prior to that, he was President of RDF Media Group (now Zodiak Media) in Los Angeles, where his credits included Wife Swap, Faking It and I Hate My Boss. Before moving to North America, he was a senior creative executive at ITV Studios, where he created Airline for ITV and A&E and oversaw numerous hit shows, including Parking Wars and I’m a Celebrity Get Me Out of Here.
Alex Gibney President, Jigsaw Productions
Director Alex Gibney has been called “the most important documentarian of our time” by Esquire and “one of America’s most successful and prolific documentary filmmakers” by The New York Times. Alex’s signature cinematic style lends itself to his penetrating, gripping, and deeply insightful documentaries which have been the recipient of an Academy Award, multiple Emmy Awards, a Grammy Award, several Peabody Awards, the DuPont-Columbia Award, The Independent Spirit Award and The Writers Guild Awards. In 2013, Alex was honored with the International Documentary Association’s (IDA) Career Achievement Award and the first ever Christopher Hitchens Prize in 2015.
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Alex’s recent films include the triple Emmy and Peabody award-winning Going Clear: Scientology and the Prison of Belief, the most-watched HBO documentary in a decade; Sinatra: All or Nothing at All, a two-part special on legendary entertainer Frank Sinatra, on HBO; Zero Days which was released by Magnolia Pictures in July of 2016 and had its broadcast premiere on Showtime in November 2016; No Stone Unturned which premiered at the New York Film Festival in September of 2017 and was nominated for the WGA Award for Best Documentary Screenplay; and HBO’s Rolling Stone: Stories from the Edge (2017), co-directed by Blair Foster. He executive produced, and directed the first episode of, The Looming Tower, a drama series that premiered on Hulu in February of 2018, based on Lawrence Wright’s book of the same name.
Other career highlights include the Oscar-winning Taxi to the Dark Side, the Oscar-nominated Enron: The Smartest Guys in the Room, and the multiple Emmy Award-winning Mea Maxima Culpa.
Michael Hammond Chief Operations Officer, Collins Avenue
As Chief Operations Officer, Michael Hammond reports directly to Collins Avenue President, Jeff Collins and oversees all aspects of Collins Avenue’s production roster, including day-to-day operations of the company. Hammond is Executive Producer on the hit Lifetime series Dance Moms, as well as its numerous spinoff series and specials, including Abby’s Ultimate Dance Competition and the E! series The Drama Queen. Hammond has overseen production on numerous Collins Avenue series, including American Stuffers for Animal Planet, Outrageous Kid Parties for TLC and American Colony: Meet the Hutterites for National Geographic Channel.
Hammond began his entertainment career in front of the camera, then segued into producing for commercials and music videos prior to joining CBS/World Race Productions, where he served as Producer on the hit primetime Emmy Award-winning series The Amazing Race for seven seasons. He was Line Producer for Reveille’s Losing It With Jillian and served as Line Producer for multiple seasons of Granada Entertainment’s Emmy-nominated hit series, Hell’s Kitchen.
Paul Heaney Chief Executive Officer, TCB
Paul Heaney launched TCB in October 2012 with an aim to bolt on four different functions to what a non scripted distributor should do:: to sell and pre sell at a high rate, to help producers co create IP, pass on int’l buyer briefs and act as an agent where applicable. Allied to this were the needs to build a team capable of sourcing and selling factual entertainment and formats with strong-pre-sales and revenue potential. Heaney and his 20 -strong team work with some of the most highly regarded production companies in the business and leverage their network of co-production, broadcaster and pre-sales relationships in the US, the UK, France, Germany, Italy, Australia/New Zealand and the Nordics to help them realise their programme-making ambitions.
Previously Heaney launched Cineflix’ Distribution arm, Cineflix International in 2002, leaving after 10 years having grown it to a $35 million business from scratch.
Jennifer Kawaja Co-President, Sienna Films
Jennifer Kawaja has over 25 years experience creating premium content for the international marketplace. As a partner with Julia Sereny in Sienna Films since 1995, she has continuously made critically acclaimed and award-winning television, film and digital media building a reputation with indie documentary and feature films before moving into television series production, always venturing into challenging territory. Before joining Sienna Films, Jennifer was a partner in the Winter Films Production Collective, where she directed music videos, short dramas and documentaries including the Beyond Borders two parter for the National Film Board of Canada, produced the award-winning drama The Other Prison and television documentary :30 Second Democracy by writer/director David Vainola. Previous to that Jennifer consulted for the Department of Multiculturalism Film and Video Program, the Canada Council for the Arts, the Ontario Arts Council and the National Film Board of Canada..
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Tanya Linton Co-Chief Executive Officer, Architect Films
Tanya Linton is one of the industry’s most respected producers. The former broadcast executive joined Architect Films in 2015 following her departure from Shaw Media Inc. (later acquired by Corus Entertainment Inc). While at Shaw Media, Tanya served as the Director of Original Lifestyle Content for several years, creating, commissioning and helping develop numerous internationally successful series, brands and personalities. She was an integral part of Shaw Media’s creative and strategy team. Upon her move to Architect, Tanya quickly built-out the company’s production slate to the varied and deep list that it is now.
Simon Lloyd Chief Executive Officer and Co-Founder, Our House Media
Simon Lloyd is Chief Executive Officer and Co-founder of Our House Media. In this role, he oversees Our House Media’s corporate affairs and its creative output. Simon is an award-winning producer and a leading innovator in non- scripted programming in Canada, the United States and the United Kingdom. Prior to founding Our House Media, Simon was Chief Executive Officer of Cineflix Productions. In his eight years at Cineflix Productions, he oversaw enormous growth in the company’s unscripted programming slate, eventually running more than 400 hours of production, annually. Previously, Simon was Managing Director of Outline Productions Ltd., Head of Wall to Wall Media Ltd. (Scotland) and Head of Programs at Prospect Pictures (part of DCD Media plc). He has also created and overseen some of the world’s most successful non-fiction TV brands inducing Property Brothers, American Pickers, House of Tiny Tearaways and Property Virgins. He has also won many major international honors, including BAFTA, Emmy, Gemini, RTS, Rockie and Rose d’Or awards.
Marlo Miazga Vice President, Content, Bristow Global Media
Marlo Miazga joined Bristow Global Media as Vice President of Content in 2016. She has been collaborating with some of the leading voices in Canadian television for 25 years and has built a reputation for creating and producing television that draws on her deep roots in factual and drama. Prior to joining the company, Marlo served as the co- executive producer for BGM on the CBC docudrama series, Canada: The Story of Us and is currently executive producing 100 Days to Victory for HISTORY channel (Canada, Australia and New Zealand) and BBC (Scotland); kids’ factual series, It’s My Party for TVO (Canada); and a slate of drama series in development with Attraction Media.
From 2011 to 2015, Marlo was co-president of Newroad Media, producing popular series such as Close Encounters (2013) for Discovery Channel and Science U.S, Curious and Unusual Deaths for Discovery Channel Canada and A&E UK, as well as My Wild Affair for PBS, Animal Planet Canada and Discovery West. Before launching Newroad Media, Marlo worked as an editor, series producer and creator of both dramatic and factual television. Additional credits include: Peter Wintonicks’ multiple award-winning NFB feature, Cinema Verite: The Defining Moment; Paul Fox’s psychological feature thriller, The Dark Hours; CBC Comedian Rick Mercer’s five-part series, Tuning In and Greig Dymonds’ comedy series for CBC, Jimmy MacDonald’s Canada. Marlo launched her career as a film editor after graduating from McGill University and the Canadian Film Centre, where she has been a resident mentor for the last decade.
Jeff Norton Founder, Awesome
Jeff Norton is an author, television writer and executive producer. His original screenplay Expat is with Monumental Television and Woodland in co-development with Fiction Factory Films. Jeff is the author of the award-winning MetaWars novels (Hachette), the laugh-out-loud Memoirs of a Neurotic Zombie books (Faber & Faber), the sci-fi comedy Alienated (Awesome Reads), and the upcoming Dino Knights series and the Victorian revenge thriller Looking Glass. He is also the co-author of thriller Keeping The Beat (KCP Loft) and the creator of the best-selling Princess Ponies franchise (Bloomsbury).
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Jeff is an executive producer of Trucktown (Nelvana), based on the books by Jon Scieszka. Previously, Jeff was Senior Vice President at Chorion Ltd., where he managed the Enid Blyton Literary estate. Before moving to the UK, Jeff worked in Hollywood for both indie and studio-based production companies and produced the award-winning Choose Your Own Adventure interactive movie. Jeff is a graduate of the Harvard Business School and was previously a marketing executive for Procter & Gamble.
Stacey Offman Senior Vice President of Development and Production, Jigsaw Productions
Stacey Offman joined Jigsaw in 2012 and works alongside Jigsaw founder, Alex Gibney, to oversee and develop a dynamic slate of documentaries (Zero Days, Steve Jobs: The Man in the Machine, Going Clear: Scientology and the Prison of Belief, Mea Maxima Culpa) and fiction and non-fiction episodic television (Parched for NatGeo, The Killing Season for A&E, The 4%: Film’s Gender Problem for EPIX, Cooked for Netflix, Death Row Stories for CNN, and The New Yorker Presents for Amazon). With nearly 20 years in the business, Stacey has worked across both film and TV producing numerous high profile documentaries and non-fiction series across major networks. Prior to joining Jigsaw, Stacey was Morgan Spurlock’s producing partner (Where in the World is Osama Bin Laden, What Would Jesus Buy? and 30 Days for F/X). Previously, Stacey served as supervising producer for Emmy-nominated Borderline TV and Head of Production & Development at Academy Award® nominated Paperny Entertainment.
Sharone Ostrovsky Chief Executive Officer, 4East Media
For 25 years Sharone has developed, produced and directed hundreds of hours of internationally recognized content in the documentary, lifestyle and reality genres – most recently including Discovery Canada’s Hellfire Heroes. A highly adaptable executive producer, she does it all – from generating concepts to full scale show running. She oversees everything from crews to budgets, not neglecting to colour-correct that very last frame.
Jeff Peeler President & Executive of Brand Integration, Frantic Films
Jeff Peeler serves on Frantic Films’ senior management team and holds various responsibilities across its two offices in Winnipeg and Toronto. As a producer and executive producer, his credits include the Canadian Screen Award- winning Still Standing (CBC), Buy It Fix It Sell It (HGTV), Backyard Builds (HGTV), The Winnipeg Comedy Festival (CBC), Meet the Family (City) and the Baroness von Sketch Show (CBC) among many. For 20 years, Jeff has been working with brands to create internationally distributed long and short form content.
Prior to joining Frantic Films in 2003, Jeff ran his own production company, Critical Madness Productions, through which he produced television commercials and documentaries, as well as the award-winning feature film The Nature of Nicholas. Previously, as a Vice President and Producer at Credo Entertainment Corporation, he was active in developing lifestyle and documentary television series including the travel series World’s Greatest Spas. Jeff is a graduate of Ryerson University’s Radio and Television Arts program (Bachelor of Applied Arts, Honours) and holds a Bachelor of Arts (Psychology) from the University of Manitoba. He is the current chair of Manitoba’s screen-based media industry association, On Screen Manitoba.
Richard Perello Chief Operating Officer and Executive Vice President of Production, Jigsaw Productions
Richard Perello oversees the production, finance and business operations for all of Jigsaw’s film and television projects. He has been serving as an executive in the entertainment industry and has been producing studio and independent feature films and projects for network television for over 25 years (including Warner Bros, Fox Searchlight, Paramount, HBO, Showtime, CNN, Amazon, Netflix, Hulu, AMC, A&E, National Geographic, Nickelodeon, Comedy Central, NBC Television, MTV, Bravo, Saturday Night Live, and the Coca Cola Company). His financial industry experience includes seven years as an investment banker at the New York firms
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Kidder, Peabody & Co and Benedetto, Gartland & Company in mergers and acquisitions and corporate finance. Mr. Perello is an adjunct professor at NYU Tisch School of the Arts and Columbia University.
Greg Phillips President, Distribution, KMD
Greg Phillips is KMD’s head of distribbution. He is responsible for managing all strategic business matters, whilst driving the growth of the company in the international market. Greg oversees all program acquisitions, film and television sales and marketing strategies across all media and genres. He directs the distribution of more than 5,000 hours of diverse content, including over 275 theatrical feature titles. Prior to joining CMC in 1999, Greg was head of Worldwide TV Distribution for Southern Star, Australia’s leading producer and distributor of television programming. With more than 30 years’ experience in the industry, Greg has held a number of senior positions, including President, Worldwide Distribution at MTM International, Managing Director, Europe at CBS Broadcast International and Director of International Theatrical Sales at Goldcrest Film and TV.
Sonya Roberts Chief Operating Officer, 4East Media
Sonya’s experience in the entertainment industry is diverse. She started her career as a scriptwriter, story editor and researcher for various Canadian lifestyle series. She was also Associate Producer for the Vicious Brothers sci-fi horror film, Extraterrestrial. From 2013-2017, Sonya was the Director of Legal and Business Affairs for Portfolio Entertainment (The Cat in the Hat Knows A Lot About That! Doki, Freaktown), where she supported the expansion of the company from 17 to 120 employees, including a fully-intergrated in-house animation studio, and regularly negotiated international co-productions and co-ventures. Over the years, Sonya has represented properties and closed deals with major international broadcasters and their partners, including Disney, Corus, Nat Geo., Warner Bros., PBS, Discovery Channels and Scripps.
Julia Sereny Co-President, Sienna Films
Julia Sereny has over 25 years’ experience creating premium content for the international marketplace. She founded Sienna Films in 1992, producing theatrical feature April One starring David Strathairn and documentaries including series Hidden Children and Orphans of Manchuria with UK’s October Films for Channel 4 and TVO, before partnering with Jennifer Kawaja in 1995. Since that time, the duo has consistently made critically acclaimed and award-winning television, film and digital media building a reputation with indie documentary and feature films before moving into high caliber television series production, always venturing into challenging territory. Prior to founding Sienna Films, Sereny worked at The National Film Board, Rhombus Media and Atlantis Films, as well as consulting as an independent producer on co-productions including Hand of Stalin for the BBC.
Mike Sheerin Co-Chief Executive Officer, Architect Films
Mike Sheerin founded Architect Films in 2010. Prior to that time, he was an award-winning documentary director and producer covering a wide variety of topics from politics to wars to Santa Claus. He is regarded as a creative and operational powerhouse with a mastery of all elements of production. He created and grew brands such as Decked Out, which was subsequently spun-off into other series, such as Deck Wars, Disaster Decks and Custom Built. He created the popular game show, Ice Cold Cash and the successful series Extreme Collectors.
Carrie Stein EVP, Global Scripted Series, KMD
Carrie has worked in the entertainment industry for more than 20 years in all phases of the business, including feature film and television development and production. She was most recently Executive Vice President of Global Productions for Entertainment One Television. In that capacity, she forged strategic alliances with global producers and packaged and oversaw international co-productions including Ransom (CBS and Shaw) which is in its second season, Welcome to Sweden (TV4 and NBC), the multi award-winning The Book of Negroes (CBC and BET), Gap
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Year (Channel 4 and Hulu) and Cardinal (CTV), now in production for seasons 2 and 3. Prior to joining eOne, Carrie launched the global division of 3 Arts, managing production companies and showrunners worldwide. Before that, she was Chief Executive Officer of Alchemy Television, a UK and LA-based production and distribution company responsible for a slate of high-end television properties including Coco Chanel, Ben Hur, The Company and Flashpoint. Earlier, she ran the long-form packaging department at ICM for eleven years.
Dina Subhani Executive Director, TCB
As one of the founding directors of TCB, Dina Subhani has played a strategic role in the management and growth of the company since its inception, overseeing accounts, marketing and financial planning. In her current role as Executive Director, Dina oversees the newly expanded Marketing and Events division.
Dina began her career in sales at national UK newspaper The Daily Telegraph, regional television station Yorkshire Television and a number of radio stations including as Head of Sales and Marketing of the launch team for Liberty Radio. She then took a logistics management role at event organizer Original Concept, where she, along with an established team, planned corporate events and award ceremonies for clients such as Blockbuster and Colombia Films.
Liz West SVP, Digital and Development, 4East Media
Liz has a passion for storytelling. While she is best known for delivering the goods in front of the camera (reporting on everything from daily news to lifestyle and entertainment) Liz is also a seasoned producer. Curiosity, creativity and communicating make her tick. As the industry changed, Liz made the natural evolution into the digital world with her weekly podcast and content creation company, Your Newz Now. Now Liz has applied her broadcast skills to develop both short and long-format series and is always working to produce the next great content experience for viewers – across all platforms.
Conflicts of Interest
Certain of the directors and executive officers of Kew are officers and directors of, or are associated with, other public and private companies. Such associations may give rise to conflicts of interest with Kew from time to time. Our Executive Chairman and director Peter Sussman was a minority shareholder of Our House Media, Sienna Films and Awesome as well as a director of Frantic Films and a participant of Frantic Films’ deferred share unit plan prior to the Closing. See “Interest of Management and other in Material Transactions”.
The Corporations Act requires, among other things, that the directors and executive officers of Kew act honestly and in good faith with a view to the best interest of Kew, to disclose any personal interest which they may have in any material contract or transaction which is proposed to be entered into with Kew and, in the case of directors, to abstain from voting as a director for the approval of any such contract or transaction. To the extent that conflicts of interest arise, such conflicts will be resolved in accordance with the provisions of the Corporations Act.
Indemnification and Insurance
The Corporation maintains a director and officer insurance program to limit the Corporation’s exposure to claims against and to protect, its directors and officers. In addition, the Corporation has entered into indemnification agreements with its directors and officers. The indemnification agreements generally require that the Corporation indemnify and hold the indemnitees harmless to the greatest extent permitted by law for liabilities arising out of the indemnitees’ service to the Corporation as directors and officers, provided that the indemnitees acted honestly and in good faith and in a manner the indemnitees reasonably believed to be in, or not opposed to, the Corporation’s best interests and, with respect to criminal and administrative actions or proceedings that are enforced by monetary penalty, the indemnitees had no reasonable grounds to believe that his or her conduct was unlawful. The indemnification agreements also provide for the advancement of defence expenses to the indemnitees by the Corporation. Statutory indemnification rights also apply.
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Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions
To the knowledge of Kew, none of its directors and officers is, or within 10 years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company (including Kew) that (i) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the director or officer was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
To the knowledge of Kew, none of its directors and officers is, or within 10 years prior to the date hereof has been, a director or executive officer of any company (including Kew) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (ii) has, within 10 years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or executive officer.
To the knowledge of Kew, none of its directors and officers has been subject to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to invest in Kew.
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Except as described in this AIF, none of the directors or executive officers of Kew, or any person or company that is expected to beneficially own, or control or direct more than 10% of any class or series of shares of Kew, or any associate or affiliate of any of the foregoing persons, has or has had any material interest in any past transaction within the three years before the date of the AIF, or any proposed transaction, that has materially affected or would materially affect Kew or any of its expected subsidiaries. Our Executive Chairman and director Peter Sussman was a minority shareholder of Our House Media and Sienna Films, as well as a director of Frantic Films and participated in Frantic Films’ deferred share unit plan. In connection with closing of these acquisitions, Mr. Sussman sold his interests in Frantic Films, Our House Media and Sienna Films. Mr. Sussman remains a minority shareholder of Awesome by virtue of his holdings of 15% of the issued and outstanding shares in the capital of Awesome.
RISK FACTORS
The risks and uncertainties described in this AIF are those the Corporation currently believes to be material, but they are not the only ones it faces. If any of the following risks, or any other risks and uncertainties that the Corporation has not yet identified or that it currently considers not to be material, actually occur or become material risks, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could be materially and adversely affected.
Fluctuations in the price of Kew’s securities could contribute to the loss of all or part of your investment.
Fluctuations in the price of Kew’s securities could contribute to the loss of all or part of your investment. Any of the factors listed below could have a material adverse effect on your investment in Kew securities and they may trade at prices significantly below the price you paid for them. In such circumstances, the trading price may not recover and may experience a further decline.
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• actual or anticipated fluctuations in Kew’s quarterly financial results or the quarterly financial results of companies perceived to be similar;
• changes in the market’s expectations about operating results;
• success of competitors;
• Kew’s operating results failing to meet the expectation of securities analysts or investors in a particular period;
• operating and stock price performance of other companies that investors deem comparable to Kew;
• changes in laws and regulations affecting the business;
• commencement of, or involvement in, litigation involving Kew;
• changes in Kew’s capital structure, such as future issuances of securities or the incurrence of additional debt;
• any major change in the Board or Kew’s management; and
• sales of substantial amounts of Voting Shares by directors, executive officers or significant shareholders or the perception that such sales could occur.
In addition, broad market and industry factors may materially harm the market price of Kew’s securities irrespective of operating performance. The stock market in general and the TSX in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks and of Kew’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to Kew could depress the share price regardless of Kew’s business, prospects, financial conditions or results of operations. A decline in the market price of Kew’s securities also could adversely affect its ability to issue additional securities and to obtain additional financing in the future.
There can be no assurance of adequate recovery by Kew from the vendors for any breach of the representations, warranties and covenants of the vendors under the respective purchase agreements.
There can be no assurance of adequate recovery by Kew from any of the vendors (collectively, the “Vendors”) of the businesses that Kew acquired in connection with and since, the Qualifying Acquisition (collectively, the “Acquired Businesses”) for any breach of the representations, warranties and covenants of the Vendors under any of the purchase agreements in respect of the Acquired Businesses because there can be no assurance that the amount and length of the indemnification obligations will be sufficient to satisfy such obligations or that the Vendors will have any assets or continue to exist. Moreover, to the extent that Kew becomes entitled to recover from, or indemnification obligations arise against, any of the Vendors that continue with Kew, Kew’s relationship with such Vendor(s) may be negatively impacted.
Kew may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on the financial condition, results of operations and Common Share price, which could cause you to lose some or all of your investment.
Although Kew conducted due diligence on each of the Acquired Businesses, Kew cannot assure you that this diligence revealed all material issues that may be present in each of their respective businesses, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of either party’s control will not later arise. As a result, Kew may be forced to later write down or write-off assets, restructure its
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operations, or incur impairment or other charges that could result in losses. Even if due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with Kew’s preliminary risk analysis. In addition, charges of this nature may cause the Kew to be unable to obtain future financing on favorable terms or at all.
Warrants are exercisable for Shares, which could increase the number of shares eligible for future resale in the public market and result in dilution to shareholders.
Outstanding Warrants to purchase an aggregate of 7,442,000 Shares are exercisable in accordance with the terms of the Warrant Agreement. These Warrants became exercisable on April 19, 2018 and will expire at 5:00 p.m., Toronto time, on March 20, 2022 or earlier upon redemption or liquidation. The exercise price of these Warrants is $11.50 per share, or approximately $85.6 million in the aggregate for all shares underlying these Warrants. The extent to which such Warrants are exercised will result in dilution to the holders of Shares and increase the number of Shares eligible for resale in the public market. Sales of substantial numbers of such Shares in the public market or the fact that such Warrants may be exercised could adversely affect the market price of the Shares.
There is no guarantee that the Warrants will ever be in-the-money and the Warrants may expire worthless.
There is no guarantee that the Warrants will ever be in-the-money prior to their expiration and, as a result, the Warrants may expire worthless.
As a business in the content production and distribution industry, Kew may be adversely affected by various operating risks common to the production and distribution industry, including competition, consumer opinions and reviews, technological changes and strong dependence on government subsidies for a large portion of the production budgets, which may ultimately adversely affect Kew.
Operating in the production and distribution of content involves a certain amount of risk. A consumer’s acceptance of the content is determined by the audience’s personal tastes, which can be unpredictable, preferences and reactions to the artistic direction of the content, as well as audience ratings, considerable competitive content released at the same time, technological advances and the ability to deliver content to both traditional and digital platforms. In addition, Kew is subject to various operating risks that are common to the production and distribution industry, many of which are beyond its control, including, among others, the following:
• competition from other businesses, in particular, larger and more established companies, in the markets in which Kew operates;
• reduction in broadcaster and other platform programming budgets in the markets in which Kew operates, which may adversely affect its new production and revenues;
• strong dependency on local government tax credits and subsidies as well as pre-sales to fund the production budgets;
• the requirement for continuous investment of capital into new production annually;
• increased costs of production and/or delays due to overruns, labour disputes or strikes within the guild or unions, death or disability of lead performers, as applicable, or other unforeseen events;
• management’s estimates of projected revenues and expenses may be insufficient to cover the costs of production and may cause substantial loss on new production;
• changes in the regulatory environment of the production and distribution industry in the geographic area of the business;
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• operating in the anticipated geographic areas of the United States, the United Kingdom and Australia may expose Kew to foreign exchange fluctuations and may adversely affect its profitability and cause a loss on repatriation of funds to Canada;
• Kew’s ability to attract, recruit and retain quality employees and key talent to continue the development of fresh content and key franchises and brands;
• Kew has long-term output licensing agreements with a certain broadcaster and distributor, which may not be renewed;
• difficulties protecting IP and defending against IP infringements and claims;
• exposure to key broadcast customers and/or key distribution customers, based on business relationships that might be changed or terminated or that may not survive over the long term;
• increased exposure to and risks of content piracy, including digital and internet piracy;
• Kew and certain of its current and former employees may be subject to allegations of sexual harassment and discrimination relating to alleged misconduct; and
• risks generally associated with the ownership of a business in the production and distribution industry.
The occurrence of any of the foregoing could materially and adversely affect Kew.
Kew faces risks inherent in doing business internationally, many of which are beyond its control and which could have a material adverse effect on its results of operations or financial condition.
Kew produces and distributes content and conducts other business activities outside of Canada and derives revenues from these sources. As a result, Kew is subject to certain risks inherent in international business, many of which are beyond its control. These risks include: changes in local regulatory requirements, including restrictions on content; changes in the laws and policies affecting trade, investment and taxes (including laws and policies relating to the repatriation of funds and to withholding taxes); differing degrees of protection for IP; instability of foreign economies and governments; cultural barriers; wars and acts of terrorism; and the spread of viruses, diseases or other widespread health hazards. Any of these factors could have a material adverse effect on Kew’s results of operations or financial condition.
Funds from the foreign exploitation of Kew’s properties may be paid in foreign currencies, which may vary substantially relative to the Canadian dollar in a production period due to factors beyond Kew’s control. In addition, foreign currency and exchange control regulations may adversely affect the repatriation of funds to Canada.
The returns to Kew from foreign exploitations of its properties are customarily paid in U.S. dollars, U.K. pounds sterling and Australian dollars, and, as such, may be affected by fluctuations in the exchange rates. Currency exchange rates are determined by market factors beyond the control of Kew and may vary substantially during the course of a production period. In addition, the ability of Kew to repatriate to Canada funds arising in connection with the foreign exploitation of its properties may also be adversely affected by currency and exchange control regulations imposed by the country in which the production is exploited. At present, Kew is not aware of any existing currency or exchange control regulations in any country in which Kew currently contemplates exploiting its properties, which would have
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an adverse effect on Kew’s ability to repatriate such funds. Where appropriate, Kew may hedge its foreign exchange risk through the use of derivatives.
Kew cannot guarantee the avoidance of production budget overruns.
The operating model of production companies requires that they be diligent in managing their production expenses. Any cost overruns are unlikely to be recouped. There can be no assurance that Kew will be successful in minimizing production budget overruns. If Kew does experience significant budget overruns on current and future productions, it will have a material adverse impact on its business.
Kew relies on key personnel, the loss of any one of whom could have a negative effect on its business.
Our success depends to a significant extent upon the efforts and abilities of our senior management team and key financial and operating personnel. Competition for highly qualified personnel is intense and the loss of any executive officer, senior manager, or other key employee without adequate replacement or the inability to attract new qualified personnel could have a material adverse effect on our business, results of operations and financial condition. We do not maintain key-man life insurance on our management team. Kew faces substantial competition.
The industry within which Kew operates is competitive, with many content production companies competing to have their ideas and scripts funded and productions aired. Some of Kew’s competitors are much larger, more diversified and have greater financial resources. The resources and influence that Kew’s larger competitors have may give them an advantage in terms of having projects ordered.
Kew’s success depends on external factors in the content industry.
Kew’s success depends on the commercial success of content, which is unpredictable. Operating in this industry involves risk. It is difficult to predict how the audience will receive a production. The audience reaction and reviews and ratings of the production are determining factors in the commercial success of a production.
Kew’s success is also impacted by the quality of productions released by its competition. If a certain competitors’ content that has become popular is exhibited at the same time, or are seen as an alternative to certain Kew content, it may detract people who may otherwise choose to watch Kew’s content.
The availability and access to different forms of entertainment and leisure activities, general economic conditions and other factors may change and Kew may have limited or no control over the outcome.
Kew’s success is also dependent on the public’s continued demand for subscriptions of cable television and services provided by VOD companies. Kew’s customers rely on funds generated through cable and/or VOD subscriptions to fund the acquisition of new content. If customers decide to cancel their subscriptions to cable and/or VOD, it could have an impact on the number of networks and broadcasters with whom Kew could do business.
The above external factors could have a material adverse effect on the business, operating results and financial condition of Kew.
Kew may be subject to claims and legal proceedings that could be time-consuming, expensive and result in significant liabilities for the company.
Governmental, legal or arbitration proceedings may be brought in the future or threatened against Kew. Regardless of their merit, any such claims could be time consuming and expensive to evaluate and defend, divert management’s attention and focus away from the business and subject Kew to potentially significant liabilities.
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Kew’s results of operations may fluctuate significantly depending on the number and timing of content delivered or made available to various media.
Results of operations for any periods are significantly dependent on the number and timing of content delivered or made available. Consequently, Kew’s results of operations may fluctuate materially from period to period and the results of any one period are not necessarily indicative of results for future periods. Cash flows may also fluctuate and are not necessarily closely correlated with revenue recognition. Because of the cyclical and seasonal nature of content “greenlights”, Kew’s revenues may not be earned on an even basis throughout the year. Results from operations can fluctuate materially from quarter to quarter and the results for any one quarter are not necessarily indicative of results for future quarters. Management estimates for revenues and expenses for a production may not be accurate.
Kew makes numerous estimates as to its revenues and matching production costs on a project by project basis. As a result of this accounting policy, earnings can widely fluctuate if management has not accurately forecasted the revenue potential of a production. Kew is subject to income taxes both federally and provincially and to audits from tax authorities in those jurisdictions. Any audits could materially affect the income taxes payable or receivable in any jurisdiction, which changes would affect Kew’s financial statements.
In preparing its financial statements, Kew is required to estimate production tax credits receivable in each of the jurisdictions in which it operates, taking into consideration tax laws, regulations and interpretations that pertain to its activities. In addition, Kew is subject to audits from these tax authorities on an ongoing basis and the outcome of such audits could materially affect the amount of tax credits receivable recorded on its consolidated balance sheets and the income tax expense recorded on its consolidated statements of earnings. Any cash payment or receipt resulting from such audits would have an impact on Kew’s cash resources available for its operations and its overall results of operations. The Company’s failure to adequately manage liquidity could adversely affect it and its results of operations.
Kew’s production and distribution revenues for any period are dependent on the number and timing of content delivered, which cannot be predicted with certainty. Content distribution revenues can fluctuate significantly from period to period, driven by timing fluctuations and/or quarterly reporting from its distribution partners. While Kew intends to manage liquidity by forecasting and monitoring operating cash flows and through the use of interim production financing, any failure to adequately manage liquidity could adversely affect the business and its results of operations, including by limiting its ability to meet its working capital needs. There can be no assurance that Kew will continue to have access to sufficient short term capital resources, on acceptable terms or at all, to meet its liquidity requirements. Loss of Canadian status may result in loss of government tax credits and incentives or default by Kew under broadcast licenses. As well, Kew may fail to qualify for tax credits.
In addition to license fees from domestic and foreign broadcasters, Kew finances a significant portion of its production budgets from federal and provincial governmental agencies and incentive programs, including, in some cases, the Canada Media Fund, provincial film equity investment and incentive programs, federal tax credits and provincial tax credits, and other investment and incentive programs. Tax credits are considered part of a business’ equity in any production for which they are used as financing. There can be no assurance that individual incentive programs available to Kew will not be reduced, amended or eliminated or that Kew or its productions will qualify for such incentive programs, or that Kew will not have compliance issues in respect of tax credits, any of which may have an adverse effect on Kew’s results of operations or financial condition.
Furthermore, Kew could lose its ability to exploit Canadian government tax credits and incentives described above if it ceases to be “Canadian” as defined under the ICA. The ICA establishes a number of rules and presumptions (the “Canadian Status Rules”) for determining who is a “Canadian” for purposes of the ICA. Under the Canadian Status Rules, Kew would not be considered to be a Canadian if one non-Canadian or two or more members of a voting group who are non-Canadians own 50% or more of the voting shares of Kew. Moreover, as Kew is engaged in a prescribed business which is related to Canada’s cultural heritage or national identity (i.e. a so called “cultural business” which
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includes among others, any business which is engaged in film or television production or distribution in Canada), even if Kew qualifies as Canadian-controlled by virtue of the normal Canadian Status Rules, the Minister of Canadian Heritage may nevertheless determine that Kew is not Canadian-controlled where, after considering any information and evidence submitted by or behalf of Kew or otherwise made available to the Minister, the Minister is satisfied that Kew is controlled in fact by one or more non-Canadians.
In Canada and under international co-production treaties, under applicable regulations, a program will generally qualify as a “Canadian-content” production if, among other things: (i) it is produced and owned or co-owned by a Canadian-controlled entity with the involvement of Canadians in certain key prescribed principal functions; and (ii) a substantial portion of the budget is spent on Canadian elements and post-production in Canada. In addition, (and with the exception of a treaty co-production) the Canadian producer must have full creative and financial control of the project. A substantial number of Kew’s programs are contractually required by broadcasters to be certified as “Canadian-content” productions. In such cases, in the event that a production does not qualify for “Canadian content” certification, the program supplier would be in default under any government incentive and broadcast licenses for that production which require “Canadian content” certification. In the event of such default, among other remedies, the broadcaster could refuse acceptance of Kew’s productions.
Recently, the Minister of Canadian Heritage conducted a comprehensive review of Canada’s cultural industries and on September 28, 2017, she outlined the Government of Canada’s new policy approach called “Creative Canada” for Canada’s cultural industries in a digital world. In conjunction with the release of the “Creative Canada” policy, the Minister ordered the Canadian Radio-television and Telecommunications Commission (the “CRTC”) to review the federal Broadcasting and Telecommunications Acts and report to the government on future distribution models and how they will support Canadian programming. The CRTC issued calls for submissions in October and December of 2017, asking the media industry to provide insight into how Canadians’ content consumption habits are likely to evolve in the future and how the government can help to ensure a vibrant domestic market going forward. In their submissions to the CRTC, broadcasters, producers, guilds, industry groups and other stakeholders offered many widely different recommendations on how to alter and improve the Canadian broadcasting and online distribution systems. Calls for comment closed in mid-February of 2018 and the CRTC’s report to the government was delivered on May 31, 2018. Presently, it is uncertain as to whether the CRTC’s report will result in any changes to the laws, regulations, rules, institutions, policies or programs governing Canada’s cultural or broadcasting industries and whether such changes, if any, would impact Kew or its Canadian business.
Changes in the regulatory environment of the content industry could have a material adverse effect on Kew’s revenues and earnings.
Currently the content industry is subject to a variety of rules and regulations. In addition to the regulatory risks applicable to Kew, Kew’s production and distribution operations may be affected in varying degrees by future changes in the regulatory environment of the industry in Canada and other countries in which it operates. Any change in the regulatory environment applicable to Kew’s operations could have a material adverse effect on its revenues and earnings. Management constantly monitors the regulatory environment to identify risks and opportunities resulting from any changes.
Kew may be unable to realize its growth strategy.
Kew’s growth strategy involves executing a series of acquisitions pursuant to a roll-up strategy, beginning with the Qualifying Acquisition. However, there can be no assurance that Kew will be able to achieve this objective. The successful implementation of such a growth strategy depends on Kew’s ability to continue to identify suitable acquisition candidates, acquire such companies on acceptable terms, integrate the acquired company’s operations and technology successfully with its own and maintain the goodwill of the acquired business. Kew is unable to predict whether or when it will be able to identify any suitable additional acquisition candidates that are available for a suitable price, or the likelihood that any potential acquisition will be completed. When evaluating a prospective acquisition opportunity, Kew cannot assure that it will correctly identify the costs and risks inherent in the business to be acquired. The scale of such acquisition risks will be related to the size of the company or companies acquired relative to that of Kew at the time of acquisition and certain target companies may be larger than Kew.
Growth and expansion resulting from future acquisitions may place significant demands on Kew’s management
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resources. In addition, while management believes it has the experience and know-how to integrate acquisitions, such efforts entail significant risks including, but not limited to: (a) the failure to integrate successfully the personnel, information systems, technology and operations of the acquired business; (b) the potential loss of key employees or customers from either Kew’s current business or the business of the acquired company; (c) failure to maximize the potential financial and strategic benefits of the transaction; (d) the failure to realize the expected synergies from acquired businesses; (e) impairment of goodwill; (f) reductions in future operating results from amortization of intangible assets; (g) the assumption of significant and/or unknown liabilities of the acquired company; and (h) the diversion of management’s time and resources.
Future acquisitions are accompanied by the risk that the obligations and liabilities of an acquired company may not be adequately reflected in the historical financial statements of such company and the risk that such historical financial statements may be based on assumptions, which are incorrect or inconsistent with Kew’s assumptions or approach to accounting policies. In addition, such future acquisitions could involve tangential businesses which could alter the strategy and direction of Kew.
There can be no assurance that Kew will continue to be able to successfully identify, consummate or integrate any potential acquisitions into its operations. In addition, future acquisitions may result in potentially dilutive issuances of equity securities, have a negative effect on Kew’s share price, or may result in the incurrence of debt or the amortization of expenses related to intangible assets, all of which could have a material adverse effect on Kew’s business, financial condition and results of operations.
Technological development, including changes in entertainment delivery formats, drives frequent changes within the film and television industry and Kew’s failure to respond to or capitalize on these changes could have a material adverse effect on Kew.
The entertainment industry experiences frequent change, driven by technological development, including development with respect to the formats through which content is delivered to consumers. For example, in recent years, content consumers have spent an increasing amount of time on the internet and on mobile devices and increasingly seek to download and/or view content on a time-delayed or on-demand basis, via televisions and on handheld or portable devices, which has caused significant changes to the retail distribution of content. Additionally, the emergence of new production or computer generated imagery (“CGI”) technologies, or a new digital television broadcasting standard, may diminish the value of the Company’s existing equipment and content. Although Kew is committed to production technologies such as CGI and digital post-production, there can be no assurance that it will be able to incorporate other new production and post-production technologies, which may become de facto industry standards. In particular, the advent of new broadcast standards, which may result in content being presented with greater resolution and on a wider screen than is currently the case, may diminish the evergreen value of the Kew’s programming library because such productions may not be able to take full advantage of such features. The overall effect that technological development and new forms of entertainment have on the revenue and profit that Kew derives from its entertainment content is unpredictable and Kew’s business, financial condition, operating results or prospects could be materially and adversely affected if Kew fails to accurately assess and effectively respond to technological change in the entertainment industry.
Kew is dependent on its relationships with content producers and distribution channels and those relationships are critical to Kew’s operations.
Kew obtains distributions rights for content from third-party content producers that Kew sells to a number of buyers. Kew’s financial performance is affected by its relationships with these content producers. Some of these content producers are affiliates of major studios that have their own distribution capability in the market in which Kew operates and some of these distribution channels produce their own content or are affiliated with other content producers. These content producers may decide, or be required by their respective parent companies, to use their intra-company distribution or content production capabilities, rather than contracting with Kew for distribution or content production. Kew’s business, financial condition, operating results or prospects could be materially and adversely affected if the content producers with which Kew works stops licensing content to Kew, or purchasing content from Kew, on favourable terms or at all and Kew is unable to establish new relationships to ensure the acquisition and sale of content in a timely and efficient manner.
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Kew may incur impairments and write-offs if the content it acquires and produces do not perform well enough to recoup Kew’s acquisition, production, marketing and distribution costs.
Kew incurs significant costs to acquire, produce and distribute content.
Most agreements to acquire content for distribution require minimum guarantees against royalties. The minimum guarantees are derived from Kew’s estimate of net revenues that will be realized from its distribution of the title in the relevant markets and actual results may differ from those estimates. If sales do not meet Kew’s original estimates, Kew may: (i) not recognize the expected gross margin or net profit; (ii) not recoup its minimum guarantees or distribution expenses; (iii) record accelerated amortization and/or fair value write-downs of minimum guarantee paid; or (iv) not recoup the additional funds and expenses invested to market files that Kew has produced or acquired.
With respect to content that Kew produces, it is required to amortize capitalized production costs based on estimated ultimate revenues as Kew recognizes revenue from the associated content productions. Unamortized production costs are evaluated for impairment each reporting period on a project-by-project basis. If estimated remaining revenue is not sufficient to recover the unamortized production costs, the unamortized production costs will be written down to fair value. In any given quarter, if Kew lowers its previous forecast with respect to total anticipated revenue from any individual film or other project, it may be required to accelerate amortization or record impairment charges with respect to the unamortized costs, even if Kew has previously recorded impairment charges for such project or other projects. Such impairment and accelerated amortization charges and write-offs could materially and adversely impact Kew’s business, financial condition and operating results or prospects.
Kew may have difficulty raising additional capital that may be required, on favourable terms or at all and such could adversely affect the market for Kew’s securities.
Kew may require capital in the future in order to meet additional working capital requirements, to make capital expenditures, to take advantage of investment and/or acquisition opportunities or for other reasons (the specific risks of which are described in more detail below). Additionally, if Kew increases (through internal growth or acquisition) its production slate or its production budgets, it may be required to increase overhead, make larger up-front payments to talent and consequently bear greater financial risks. Accordingly, it may need to raise additional capital in the future. Kew cannot provide assurance that it will be able to successfully implement financing arrangements or that it will not be subject to substantial financial risks relating to the production, acquisition, completion and release of future content. Kew’s ability to obtain additional financing will be subject to a number of factors, including market conditions and its operating performance. These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable for Kew.
In order to raise such capital, Kew may sell additional equity securities in subsequent offerings and may issue additional equity securities. Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market price for the securities. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and Kew may experience dilution in its earnings per share. Capital raised through debt financing would require Kew to make periodic interest payments and may impose restrictive covenants on the conduct of Kew’s business. Furthermore, additional financings may not be available on terms favourable to Kew, or at all. Kew’s failure to obtain additional funding could prevent Kew from making expenditures that may be required to grow its business or maintain its operations. Kew may issue additional Voting Shares, including upon the exercise of its currently outstanding Warrants. Accordingly, holders of Voting Shares may suffer dilution.
There can be no assurance that the actions taken by Kew to protect its IP will be adequate to protect against copying by others or to prevent third parties from asserting their own IP rights in filmed entertainment.
Distribution rights to content, as well as ancillary rights, are granted legal protection under the copyright laws and other laws of Canada, the United States and foreign jurisdictions, as contractually required. These laws impose substantial civil and criminal sanctions for the unauthorized duplication and exhibition of film and television programming. Kew takes and intends to continue to take, all appropriate and reasonable measures to secure, protect and maintain or obtain agreements from licensees to secure, protect and maintain copyright and other IP rights.
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Kew cannot give any assurance that its actions will be adequate to prevent imitation or copying of its content by others or to prevent third parties from seeking to block sales of its content as a violation of its proprietary rights. Moreover, Kew cannot give any assurance that others will not assert rights in, or ownership of, the Company’s proprietary rights, or that it will be able to successfully resolve these conflicts. In addition, the laws of certain foreign countries may not protect proprietary rights to the same extent as do the laws of Canada and the United States.
Kew operates a comprehensive clearance and rights management system to both protect its rights and to ensure that the works that it uses have the requisite clearances or licenses from the owners. A key element of contracts for copyright works is the term or time period of the license granted, which, in the content sector, can vary, but usually is for a time period of one to three years. Rights management in a digital business environment is becoming increasingly complex due to challenges with definitions, semantics and taxonomic issues related to contractual rights. Failure to adequately manage such rights can expose Kew to risks related to inadequate clearances or licenses.
Kew’s business involves risks of liability claims for content, which could adversely affect Kew’s business, results of operations and financial condition.
As a distributor and producer of content, Kew may face potential liability for: • defamation;
• invasion of privacy;
• negligence;
• copyright or trademark infringement; and
• other claims based on the nature and content of the materials distributed.
These types of claims have been brought sometimes, successfully, against producers and distributors of content. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on Kew’s business, financial condition, operating results or prospects.
Kew is dependent on its management information systems.
Kew’s ability to conduct its business, including maintaining financial controls, is based in part on the efficient and uninterrupted operation of its computer systems, including its management information systems and access to the internet. If any of Kew’s financial, rights management, personnel, email, other information technology systems, internet access or other systems or processes were to stop operating properly for any significant period of time for any reason (including, for example, hardware or software malfunctions, computer viruses, internet problems or sabotage), Kew could suffer a disruption to its business, loss of data, regulatory intervention or reputational damage.
Kew may be exposed to credit risk arising from cash and cash equivalents as well as outstanding receivables which may have a material adverse effect on its financial condition.
Credit risk arises from cash and cash equivalents, as well as credit exposure to customers, including outstanding receivables. Kew will manage credit risk on cash and cash equivalents by ensuring that the counterparties are banks, governments and government agencies with high credit ratings. The balance of trade amounts receivable are mainly with a range of broadcasters and other distribution customers. Management manages credit risk by regularly reviewing and accounts receivable and appropriate credit analysis.
In assessing credit risk, management includes in its assessment the long-term receivables and considers what impact the long-term nature of the receivable has on credit risk. For certain arrangements with licensees, Kew is considered the agent and only reports the revenue net of the licensor’s share. When Kew bills a third party in full where it is an agent for the licensor, Kew records an offsetting amount in accounts payable that is only payable to a licensee when
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the amount is collected from the third party. This reduces the risk, as Kew is only exposed to the amounts receivable related to the revenue it records.
If any non-Kew owners of Kew’s minority-owned production companies initiate forced sale and/or other sale provisions under their governing documents, Kew’s business, results of operations and financial condition may be adversely affected.
Some of Kew’s production is carried on by production companies that are jointly owned by Kew and the applicable producer. The governing documents of these production companies contain forced sale and other sale provisions that, if initiated by the non-Kew owners of such production companies, may adversely affect Kew’s business, results of operations and financial condition.
If any of certain key personnel cease to perform their current roles with Kew and/or its subsidiaries, Kew’s business, results of operations and financial condition may be adversely affected.
Several contracts, including Kew’s credit facilities and some production arrangements, require that certain members of management remain in their current position, or require involvement from certain key personnel in productions. If any of such individuals cease to perform their current roles with Kew and/or its subsidiaries, Kew’s business, results of operations and financial condition may be adversely affected.
There can be no assurance that Kew will not suffer a data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on Kew’s systems, or that any such incident will be discovered in a timely manner.
The protection of customer, employee and company data is critically important to Kew. Kew’s business requires it to use and store personally identifiable and other sensitive information of its customers and employees. The collection and use of personally identifiable information is governed by federal and provincial laws and regulations. Privacy and information security laws continue to evolve and may be inconsistent from one jurisdiction to another. Compliance with all such laws and regulations may increase Kew’s operating costs and adversely affects its ability to market its products and services.
The security measures put in place by Kew cannot provide absolute security and Kew’s information technology infrastructure may be vulnerable to criminal cyber-attacks or data security incidents, including, ransom of data, such as, without limitation, customer and/or employee information, due to employee error, malfeasance, or other vulnerabilities. Any such incident could compromise Kew’s networks and the information stored by Kew could be accessed, misused, publicly disclosed, corrupted, lost, or stolen, resulting in fraud, including wire fraud related to Kew’s assets, or other harm. Moreover, if a data security incident or breach affects Kew’s systems or results in the unauthorized release of personally identifiable information, Kew’s reputation and brand could be materially damaged and Kew may be exposed to a risk of loss or litigation and possible liability, which could result in a material adverse effect on Kew’s business, results of operations and financial condition.
Privacy and information security risks have generally increased in recent years because of the proliferation of new technologies, such as ransomware and the increased sophistication and activities of perpetrators of cyber-attacks. In the future, Kew may expend additional resources to continue to enhance Kew’s information security measures and/or to investigate and remediate any information security vulnerabilities. Despite these steps, there can be no assurance that Kew will not suffer a data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on Kew’s systems, or that any such incident will be discovered in a timely manner. Further, the techniques used by criminals to obtain unauthorized access to sensitive data, such as phishing and other forms of human engineering, are increasing in sophistication and are often novel or change frequently; accordingly, Kew may be unable to anticipate these techniques or implement adequate preventative measures.
If Kew does not allocate and effectively manage the resources necessary to build and sustain reliable information technology infrastructure, fails to timely identify or appropriately respond to cybersecurity incidents, or Kew’s information systems are damaged, destroyed, shut down, interrupted or cease to function properly, Kew’s business could be disrupted and Kew could, among other things, be subject to: the loss of revenue; the loss or unauthorized access to confidential information or other assets; the loss of or damage to trade secrets; damage to its reputation;
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litigation; regulatory enforcement actions; violation of privacy, security or other laws and regulations; and remediation costs.
AUDIT COMMITTEE
Overview
The Audit Committee consists of David Fleck (Chair), Patrice Merrin and Maurice Kagan, each of whom is and must at all times be financially literate within the meaning of National Instrument 52-110 – Audit Committees (“NI 52- 110”). Each of David Fleck, Patrice Merrin and Maurice Kagan are also independent within the meaning of NI 52- 110.
The relevant education and experience of each member of the Audit Committee is described as part of their respective biographies above under the sub-heading “Directors and Officers – Name, Address, Occupation and Security Holding – Directors” above.
The Board has adopted a written charter for the Audit Committee, which sets out the Audit Committee’s responsibility in reviewing and approving the financial statements of Kew and public disclosure documents containing financial information and reporting on such review to the Board, ensuring that adequate procedures are in place for the reviewing of Kew’s public disclosure documents that contain financial information, overseeing the work and reviewing the independence of the external auditors. The text of the written charter of the Audit Committee and other Audit Committee information are set out in Appendix A.
Pre-Approval Policies and Procedures
All non-audit services to be provided by the Corporation’s external auditor are required to be pre-approved by the Audit Committee. It is expected that, on an annual basis, the Audit Committee will continue to pre-approve a budget for certain specific non-audit services, such as assistance with tax returns.
External Audit Service Fees
The fees billed to Kew by its auditor for the financial years ended December 31, 2018 and December 31, 2017 were as follows:
Year Audit Fees(1) Audit-Related Tax Fees(3) All Other Fees(4) Fees(2) 2018 $846,150 $277,365 $689,890 $195,415 2017 $669,500 $179,000 $237,514 $446,000 ______Notes: (1) Includes the audits and interim reviews of Kew’s financial statements, as well as, prospectus related assistance to underwriters, as applicable, and related procedures in connection with Kew’s private placement and non-offering prospectus in respect of the Qualifying Acquisition in 2017. (2) Includes fees for assurance services that are reasonably related to the audit or review of the financial statements that are not reported under “Audit Fees”, including special attest services not required by statute or regulation, accounting consultations, and services relating to French translation. (3) Includes fees performed by Kew’s auditor’s tax division, except those tax services related to the audit. These services include: fees for tax compliance, tax planning and tax advice. (4) Includes fees for other services not included in “Audit Fees”, “Audit-Related Fees” and “Tax Fees”, which includes fees for advisory services relating to acquisitions by Kew.
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TRANSFER AGENT AND WARRANT AGENT
TSX Trust Company, at its principal offices in Toronto, Ontario, is the transfer agent and registrar for our Voting Shares and is the Warrant Agent for our Warrants under the Warrant Agreement.
EXPERTS
Our auditor, Grant Thornton LLP, Chartered Professional Accountants, Licensed Public Accountants, having an address of 200 King Street West, 11th Floor, Box 11 Toronto, Ontario, M5H 3T4, was first appointed effective November 3, 2015. Grant Thornton LLP has advised the Corporation that, as of the date hereof, it is independent of the Corporation within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.
PROMOTERS
Each of John Schmidt and KMG, have been promoters of Kew within the meaning of meaning of applicable securities legislation within the two most recently completed financial years or during the current financial year. As of the date of this AIF:
• KMG does not own, directly or indirectly, any Voting Shares or Warrants; and
• John Schmidt beneficially owns, or controls or directs, directly or indirectly, 247,101 Voting Shares, representing approximately 1.81% of the Voting Shares issued and outstanding.
Pursuant to an administrative services agreement, which terminated upon Closing, Kew formerly paid KMG a total of $10,000 (plus applicable taxes) per month for office space, utilities and administrative support.
LEGAL PROCEEDINGS AND REGULATORY ACTIONS
Legal Proceedings
There are no material legal proceedings to which Kew is a party or to which its property is subject, nor were there any such proceedings since November 3, 2015 (the date of Kew’s incorporation) and, to Kew’s knowledge, no such proceedings are contemplated.
Regulatory Actions
We are not aware of any penalties or sanctions imposed by a court or securities regulatory authority or other regulatory body against us, nor have we entered into any settlement agreements before a court or with a securities regulatory authority.
MATERIAL CONTRACTS
The following are the only material contracts of the Corporation (other than certain agreements entered into in the ordinary course of business):
(a) the SunTrust Facility;
(b) the implementation agreement dated February 2, 2017 by and among, CMC, Kew and the vendors of CMC relating to the acquisition of CMC, as it may be amended, supplemented or otherwise modified from time to time (the “CMC Implementation Agreement”);
(c) the share purchase agreement dated February 2, 2017 by and among Kew, Architect Films and Mike Sheerin and The Sheerin Linton Family Trust, as the vendors, relating to the acquisition of Architect
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Films, as it may be amended, supplemented or otherwise modified from time to time (the “Architect Purchase Agreement”);
(d) the share purchase agreement dated February 2, 2017 by and among Kew, Bristow Global Media and Julie Bristow, as the vendor, relating to the acquisition of Bristow Global Media, as it may be amended, supplemented or otherwise modified from time to time (the “BGM Purchase Agreement”);
(e) the share purchase agreement dated February 2, 2017 by and among Kew, Frantic Films and James Scott Brown, Jeffrey L. Peeler and Priveq III Limited Partnership, as the vendors, relating to the acquisition of Frantic Films, as it may be amended, supplemented or otherwise modified from time to time (the “Frantic Purchase Agreement”);
(f) the share purchase agreement dated February 2, 2017 by and among Kew, Media Headquarters and Robert Cohen, Jonathan Isenberg and 2553642 Ontario Inc., as the vendors, relating to the acquisition of Media Headquarters, as it may be amended, supplemented or otherwise modified from time to time (the “MHQ Purchase Agreement”);
(g) the share purchase agreement dated February 2, 2017 by and among Kew, Our House Media and Simon Lloyd, Joe Houlihan, DB10 Investments Inc., TH14 Investment Inc., Jane Lloyd, Samantha De France, Dagmar Charlton and Tricycle Media ULC, as the vendors, relating to the acquisition of Our House Media, as it may be amended, supplemented or otherwise modified from time to time (the “OHM Purchase Agreement” and, together, with the CMC Implementation Agreement, the Architect Purchase Agreement, the BGM Purchase Agreement, the Frantic Purchase Agreement and the MHQ Purchase Agreement, the “Qualifying Acquisition Purchase Agreements”);
(h) the form of agreement between Kew and the Resale Vendors (as defined in the Resale Agreement (as hereinafter defined)) dated as of Closing (the “Resale Agreement”);
(i) the shareholder rights plan agreement between Kew and TSX Trust Company, as rights agent, dated as of the Closing (the “Rights Plan”);
(j) the underwriting agreement dated June 13, 2016 among the Corporation, KMG and the underwriters of the IPO (the “IPO Underwriting Agreement”);
(k) the Forfeiture and Transfer Restrictions Agreement and Undertaking; and
(l) the Warrant Agreement.
Copies of these agreements are available on SEDAR at www.sedar.com. Key provisions of those agreements which have not otherwise been described in this AIF are described below.
IPO Underwriting Agreement
In connection with the IPO, the Corporation entered into the IPO Underwriting Agreement with the IPO underwriters and KMG pursuant to which, among other things, the Corporation agreed to sell and the IPO underwriters agreed to purchase 7,000,000 Class A Restricted Voting Units (or 7,700,000 Class A Restricted Voting Units, including 700,000 Class A Restricted Voting Units issuable pursuant to the IPO over-allotment option) at a price of $10.00 per Class A Restricted Voting Unit. See “General Development of the Business – Initial Public Offering”.
Forfeiture and Transfer Restrictions Agreement and Undertaking
On closing of the IPO, the Founders entered into the forfeiture and transfer restrictions agreement and undertaking dated as of June 13, 2016, in favour of Kew, the joint book-runners of the IPO and the TSX (the “Forfeiture and Transfer Restrictions Agreement and Undertaking”) pursuant to which each Founder agreed to certain forfeiture
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conditions and transfer restrictions in respect of their Founders’ Shares and their Class B Units and their Voting Shares and Warrants underlying the Class B Units. Pursuant to the Forfeiture and Transfer Restrictions Agreement and Undertaking, in the event that the required consent to effect a transfer of the securities is obtained, as a condition to such transfer, the Founders agreed that they shall cause any transferee of their respective securities to become a party to the Forfeiture and Transfer Restrictions Agreement and Undertaking and be bound by the terms and conditions therein.
Pursuant to TSX rules and the Forfeiture and Transfer Restrictions Agreement and Undertaking, the Founders agreed not to transfer any of their Founders’ Shares prior to completion of a qualifying acquisition. In addition to the TSX requirements and other resale restrictions, as of the closing of the IPO, each of our Founders agreed, pursuant to the Forfeiture and Transfer Restrictions Agreement and Undertaking, that he, she or it would not, except if required due to the structuring of a qualifying acquisition, in which case such restriction would apply to the securities received in connection with such qualifying acquisition, transfer any of his, her or its Class B Units (or any of his, her or its Voting Shares or Warrants underlying his, her or its Class B Units) until a date that is 30 days after the closing of the qualifying acquisition, subject to applicable securities laws. In addition, following completion of a qualifying acquisition, the Founders’ Shares could not be sold or transferred until the earlier of: one year following completion of the qualifying acquisition and the closing share price of the Voting Shares equalling or exceeding $12.00 per share (as adjusted for stock splits or combinations, stock dividends, extraordinary dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period at any time following Closing.
In addition to the foregoing transfer restrictions and pursuant to the Forfeiture and Transfer Restrictions Agreement and Undertaking, the Founders agreed that 25% of the Founders’ Shares held by each of the Founders (the “Founders’ Forfeiture Shares”) would be subject to forfeiture by the Founders on the fifth anniversary of closing of the qualifying acquisition unless the closing share price of the Voting Shares exceeds $13.00 (as adjusted for stock splits or combinations, stock dividends, extraordinary dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period at any time following the closing of the qualifying acquisition. The Founders’ Forfeiture Shares will be subject to additional transfer restrictions until the foregoing $13.00 closing share price forfeiture condition is satisfied. The Class B Units (including the shares acquired upon exercise of the Warrants) are not subject to forfeiture based on performance.
SunTrust Facility
Under terms of the SunTrust Facility, a syndicate led by SunTrust, with SunTrust Robinson Humphrey, Inc. acting as lead arranger and including The Toronto-Dominion Bank and Bank of Montreal as syndication agents, has provided Kew Media International Limited (previously Content Media Corporation International Limited) with a US$80,000,000 senior secured revolving credit facility and a US$20,000,000 senior secured term loan facility.
The SunTrust Facility is guaranteed by Kew and certain subsidiaries in the Kew group of companies (together, the “Kew Guarantors”). The Kew Guarantors have also provided a security interest to SunTrust for the term of the loan in respect of their collateral, including the right, title and interest in all of the Kew Guarantors’ personal property, tangible and intangible, wherever located or situated and whether now owned, presently existing or hereafter acquired or created. The interest rate on the loan approximates to US LIBOR plus 3.25-3.5%.
The SunTrust Facility contains customary positive, financial and reporting covenants, including, among others, a requirement to maintain a minimum Consolidated EBITDA and a prescribed Fixed Charge Coverage Ratio. The SunTrust Facility also contains customary negative covenants, including, among others, restrictions on the ability of the Loan Parties to incur or assume any indebtedness or preferred partnership interest, grant liens, provide any guarantee, or pay dividends or distributions, in each case subject to specified exceptions.
The SunTrust Facility contains customary events of default, including an event of default upon certain circumstances constituting a Change in Management, as more specifically set out in the SunTrust Facility. Failure to comply with the terms of the SunTrust Facility would entitle SunTrust and the Lenders party to the SunTrust Facility to accelerate all amounts outstanding under the SunTrust Facility and upon such acceleration, the Administrative Agent and the Lenders would be entitled to enforce on the security granted by each of the Loan Parties. The Lenders would then be repaid in full from the proceeds of all available assets prior to the repayment of claims of any unsecured creditors or equity holders.
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Purchase Agreements
Key provisions of each of the Qualifying Acquisition Purchase Agreements are described in the Corporation’s final non-offering long form prospectus dated February 10, 2017 in respect of the Qualifying Acquisition (the “Qualifying Acquisition Prospectus”) under the heading “The Qualifying Acquisition” at pages 98 to 108, which section is incorporated by reference herein. The Qualifying Acquisition Prospectus is available at www.sedar.com under the Corporation’s profile.
Resale Agreement
Key provisions of the Resale Agreement are described in the Qualifying Acquisition Prospectus under the heading “The Qualifying Acquisition”, at pages 108 to 110, which section is incorporated by reference herein. The Qualifying Acquisition Prospectus is available at www.sedar.com under the Corporation’s profile.
Rights Plan
Key provisions of the Rights Plan are described in the Qualifying Acquisition Prospectus under the heading “Shareholder Rights Plan”, at pages 118 to 121, which section is incorporated by reference herein. The Qualifying Acquisition Prospectus is available at www.sedar.com under the Corporation’s profile.
ADDITIONAL INFORMATION
Additional information relating to the Corporation may be found on SEDAR at www.sedar.com. Additional information regarding Kew, including the directors’ and officers’ remuneration and indebtedness, principal holders of Kew’s securities and securities authorized for issuance under equity compensation plans, is contained in Kew’s management information circular for the annual general meeting of Kew’s shareholders that will be held on May 14, 2019. The circular will be filed on SEDAR. Additional financial information is provided in our audited financial statements and management’s discussion & analysis for the period ended December 31, 2018.
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APPENDIX A CHARTER OF THE AUDIT COMMITTEE
Section 1 PURPOSE
The audit committee (the “Audit Committee”) is a committee of the board of directors (the “Board”) of the Corporation. The primary function of the Audit Committee is to assist the directors of the Corporation in fulfilling their applicable roles by:
(a) recommending to the Board the appointment and compensation of the Corporation’s external auditor;
(b) overseeing the work of the external auditor, including the resolution of disagreements between the external auditor and management;
(c) pre-approving all non-audit services (or delegating such pre-approval if and to the extent permitted by law) to be provided to the Corporation by the Corporation’s external auditor;
(d) satisfying themselves that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information, other than those described in (g) below, extracted or derived from its financial statements, including periodically assessing the adequacy of such procedures;
(e) establishing procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal controls or auditing matters, and for the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters;
(f) reviewing and approving any proposed hiring of current or former partner or employee of the current and former auditor of the Corporation; and
(g) reviewing and approving the annual and interim financial statements, related Management Discussion and Analysis (“MD&A”) and other financial information provided by the Corporation to any governmental body or the public.
The Audit Committee should primarily fulfill these roles by carrying out the activities enumerated in this Charter. However, it is not the duty of the Audit Committee to prepare financial statements, to plan or conduct internal or external audits, to determine that the financial statements are complete and accurate and are in accordance with International Financial Reporting Standards, to conduct investigations, or to assure compliance with laws and regulations or the Corporation’s internal policies, procedures and controls, as these are the responsibility of management, and in certain cases, the external auditor.
Section 2 LIMITATIONS ON AUDIT COMMITTEE’S DUTIES
In contributing to the Audit Committee’s discharge of its duties under this Charter, each member of the Audit Committee shall be obliged only to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Nothing in this Charter is intended to be, or may be construed as, imposing on any members of the Audit Committee a standard of care or diligence that is in any way more onerous or extensive than the standard to which the directors are subject.
Members of the Audit Committee are entitled to rely, absent actual knowledge to the contrary, on (i) the integrity of the persons and organizations from whom they receive information, (ii) the accuracy and completeness of the information provided, (iii) representations made by management as to the non-audit services provided to the Corporation by the external auditor, (iv) financial statements of the Corporation represented to them by a member of management or in a written report of the external auditors to present fairly the financial position of the Corporation in
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accordance with generally accepted accounting principles, and (v) any report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by any such person.
Section 3 COMPOSITION AND MEETINGS
The Audit Committee should be comprised of not less than three directors as determined by the Board, all of whom shall be independent within the meaning of National Instrument 52-110 – Audit Committees (“52-110”) of the Canadian Securities Administrators (or exempt therefrom), and free of any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Audit Committee. All members of the Audit Committee should have (or should gain within a reasonable period of time after appointment) a working familiarity with basic finance and accounting practices. At least one member of the Audit Committee should have accounting or related financial management expertise and be considered a financial expert. Each member should be “financially literate” within the meaning of 52-110. The Audit Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by the Corporation or an outside consultant.
The members of the Audit Committee shall be elected by the Board on an annual basis or until their successors shall be duly appointed. Unless a Chair of the Audit Committee (the “Chair”) is elected by the full Board, the members of the Audit Committee may designate a Chair by majority vote of the full Audit Committee membership.
In addition, the Audit Committee members should meet all of the requirements for members of audit committees as defined from time to time under applicable legislation and the rules of any stock exchange on which the Corporation’s securities are listed or traded.
The Audit Committee should meet at least four times annually, or more frequently as circumstances require. The Audit Committee should meet within forty-five (45) days following the end of the first three financial quarters to review and discuss the unaudited financial results for the preceding quarter and the related MD&A, and should meet within 90 days following the end of the fiscal year end to review and discuss the audited financial results for the preceding quarter and year and the related MD&A.
The Audit Committee may ask members of management or others to attend meetings and provide pertinent information as necessary. For purposes of performing their duties, members of the Audit Committee shall have full access to all corporate information and any other information deemed appropriate by them, and shall be permitted to discuss such information and any other matters relating to the financial position of the Corporation with senior employees, officers and the external auditor of the Corporation, and others as they consider appropriate.
For greater certainty, management is indirectly accountable to the Audit Committee and is responsible for the timeliness and integrity of the financial reporting and information presented to the Board.
In order to foster open communication, the Audit Committee or its Chair should meet at least annually with management and the external auditor in separate sessions to discuss any matters that the Audit Committee or each of these groups believes should be discussed privately. In addition, the Audit Committee or its Chair should meet with management quarterly in connection with the Corporation’s interim financial statements.
A quorum for the transaction of business at any meeting of the Audit Committee shall be a majority of the number of members of the Audit Committee or such greater number as the Audit Committee shall by resolution determine.
Meetings of the Audit Committee shall be held from time to time and at such place as any member of the Audit Committee shall determine upon 48 hours’ notice to each of its members. The notice period may be waived by all members of the Audit Committee. Each of the Chair of the Board, the external auditor, the Chief Executive Officer, or the Chief Financial Officer shall be entitled to request that any member of the Audit Committee call a meeting.
This Charter is subject in all respects to the Corporation’s articles of incorporation and by-laws from time to time.
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Section 4 ROLE
As part of its function in assisting the Board in fulfilling its oversight role (and without limiting the generality of the Audit Committee’s role), the Audit Committee should:
(1) Determine any desired agenda items;
(2) Review and recommend to the Board changes to this Charter, as considered appropriate from time to time;
(3) Review the public disclosure regarding the Audit Committee required by 52-110;
(4) Review and seek to ensure that disclosure controls and procedures and internal control over financial reporting frameworks are operational and functional;
(5) Summarize in the Corporation’s annual information form the Audit Committee’s composition and activities, as required; and
(6) Submit the minutes of all meetings of the Audit Committee to the Board upon request.
Documents / Reports Review
(7) Review and recommend to the Board for approval the Corporation’s annual and interim financial statements, including any certification, report, opinion, undertaking or review rendered by the external auditor and the related MD&A, as well as such other financial information of the Corporation provided to the public or any governmental body as the Audit Committee or the Board require.
(8) Review other financial information provided to any governmental body or the public as they see fit.
(9) Review, recommend and approve any of the Corporation’s press releases that contain financial information.
(10) Seek to satisfy itself and ensure that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements and related MD&A and periodically assess the adequacy of those procedures.
External Auditor
(11) Recommend to the Board the selection of the external auditor, considering independence and effectiveness, and review the fees and other compensation to be paid to the external auditor.
(12) Review and seek to ensure that all financial information provided to the public or any governmental body, as required, provides for the fair presentation of the Corporation’s financial condition, financial performance and cash flow.
(13) Instruct the external auditor that its ultimate client is not management and that it is required to report directly to the Audit Committee, and not management.
(14) Monitor the relationship between management and the external auditor including reviewing any management letters or other reports of the external auditor and discussing any material differences of opinion between management and the external auditor.
(15) Review and discuss, on an annual basis, with the external auditor all significant relationships it has with the Corporation to determine the external auditor’s independence.
(16) Pre-approve all non-audit services (or delegate such pre-approval as the Audit Committee may determine and as permitted by applicable Canadian securities laws) to be provided by the external auditor.
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(17) Review the performance of the external auditor and any proposed discharge of the external auditor when circumstances warrant.
(18) Periodically consult with the external auditor out of the presence of management about significant risks or exposures, internal controls and other steps that management has taken to control such risks, and the fullness and accuracy of the financial statements, including the adequacy of internal controls to expose any payments, transactions or procedures that might be deemed illegal or otherwise improper.
(19) Communicate directly with the external auditor and arrange for the external auditor to be available to the Audit Committee and the full Board as needed.
(20) Review and approve any proposed hiring by the Corporation of current or former partners or employees of the current (and any former) external auditor of the Corporation.
Audit Process
(21) Review the scope, plan and results of the external auditor’s audit and reviews, including the auditor’s engagement letter, the post-audit management letter, if any, and the form of the audit report. The Audit Committee may authorize the external auditor to perform supplemental reviews, audits or other work as deemed desirable.
(22) Following completion of the annual audit and quarterly reviews, review separately with each of management and the external auditor any significant changes to planned procedures, any difficulties encountered during the course of the audit and, if applicable, reviews, including any restrictions on the scope of work or access to required information and the cooperation that the external auditor received during the course of the audit and, if applicable, reviews.
(23) Review any significant disagreements among management and the external auditor in connection with the preparation of the financial statements.
(24) Where there are significant unsettled issues between management and the external auditor that do not affect the audited financial statements, the Audit Committee shall seek to ensure that there is an agreed course of action leading to the resolution of such matters.
Financial Reporting Processes
(25) Review the integrity of the financial reporting processes, both internal and external, in consultation with the external auditor as they see fit.
(26) Consider the external auditor’s judgments about the quality, transparency and appropriateness, not just the acceptability, of the Corporation’s accounting principles and financial disclosure practices, as applied in its financial reporting, including the degree of aggressiveness or conservatism of its accounting principles and underlying estimates, and whether those principles are common practices or are minority practices.
(27) Review all material balance sheet issues, material contingent obligations (including those associated with material acquisitions or dispositions) and material related party transactions.
(28) Review with management and the external auditor the Corporation’s accounting policies and any changes that are proposed to be made thereto, including all critical accounting policies and practices used, any alternative treatments of financial information that have been discussed with management, the ramification of their use and the external auditor’s preferred treatment and any other material communications with management with respect thereto.
(29) Review the disclosure and impact of contingencies and the reasonableness of the provisions, reserves and estimates that may have a material impact on financial reporting.
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(30) If considered appropriate, establish separate systems of reporting to the Audit Committee by each of management and the external auditor.
(31) Periodically consider the need for an internal audit function, if not present.
Risk Management
(32) Review program of risk assessment and steps taken to address significant risks or exposures of all types, including insurance coverage and tax compliance.
General
(33) With prior Board approval, the Audit Committee may at its discretion retain independent counsel, accountants and other professionals to assist it in the conduct of its activities and to set and pay (as an expense of the Corporation) the compensation for any such advisors.
(34) Respond to requests by the Board with respect to the functions and activities that the Board requests the Audit Committee to perform.
(35) Periodically review this Charter and, if the Audit Committee deems appropriate, recommend to the Board changes to this Charter.
(36) Review the public disclosure regarding the Audit Committee required from time to time by applicable Canadian securities laws, including:
a) the Charter of the Audit Committee;
b) the composition of the Audit Committee;
c) the relevant education and experience of each member of the Audit Committee;
d) the external auditor services and fees; and
e) such other matters as the Corporation is required to disclose concerning the Audit Committee.
(37) Review in advance, and approve, the hiring and appointment of the Corporation’s senior financial executives by the Corporation, if any.
(38) Perform any other activities as the Audit Committee deems necessary or appropriate including ensuring all regulatory documents are compiled to meet Committee reporting obligations under 52-110.
Section 5 AUDIT COMMITTEE COMPLAINT PROCEDURES
Submitting a Complaint
(39) Anyone may submit a complaint regarding conduct by the Corporation or its employees or agents (including its independent auditors) reasonably believed to involve questionable accounting, internal accounting controls or auditing matters. The Chair should oversee treatment of such complaints.
Procedures
(40) The Chair will be responsible for the receipt and administration of employee complaints.
(41) In order to preserve anonymity when submitting a complaint regarding questionable accounting or auditing matters, the employee may submit a complaint confidentially.
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Investigation
(42) The Chair should review and investigate the complaint. Corrective action will be taken when and as warranted in the Chair’s discretion.
Confidentiality
(43) The identity of the complainant and the details of the investigation should be kept confidential throughout the investigatory process.
Records and Report
(44) The Chair should maintain a log of complaints, tracking their receipt, investigation, findings and resolution, and should prepare a summary report for the Audit Committee.
The Audit Committee is a committee of the Board and is not and shall not be deemed to be an agent of the Corporation’s securityholders for any purpose whatsoever. The Board may, from time to time, permit departures from the terms hereof, either prospectively or retrospectively, and no provision contained herein is intended to give rise to civil liability to securityholders of the Corporation or other liability whatsoever.
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