| | The Reporting Persons will monitor and evaluate their investment in the Issuer on a continuing basis and may engage in discussions with management, the board of directors of the Issuer and other shareholders of the Issuer concerning the business, operations and future plans of the Issuer. Depending on various factors, including, without limitation: (a) the Issuer's business, operations, assets, financial condition and prospects; (b) market, general economic and other conditions; and (c) other investment opportunities available to the Reporting Persons, the Reporting Persons may take such actions with respect to this investment as they deem appropriate including, without limitation, (1) acquiring Shares or other securities of the Issuer, (2) making proposals to the Issuer regarding changes in the capitalization, ownership structure, operations or board representation, or (3) disposing of some or all of the securities held by the Reporting Persons. Any such additional purchases or sales of such securities may be in open market or privately negotiated transactions or otherwise.
On October 15, 2025, the Issuer entered into a securities purchase agreement (the "Purchase Agreement") with NR-SOF and NR Co-Invest, pursuant to which the Issuer agreed to issue and sell to NR-SOF and NR Co-Invest, in a private placement (the "PIPE Transaction"), an aggregate of 30,000 shares of the Issuer's newly designated Series A Convertible Preferred Stock, $0.01 par value per share (the "Series A Preferred"), subject to the terms and conditions set forth in the Purchase Agreement. On November 6, 2025, the Issuer issued and sold an aggregate of 30,000 shares of Series A Preferred at a per-share purchase price of $1,000 (the "Stated Value") to NR-SOF and NR Co-Invest for aggregate gross proceeds of $30.0 million (the "Closing").
The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series A Preferred are set forth in the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (the "Certificate of Designations"). Shares of Series A Preferred accrue dividends at a rate of 5.25% per year on the Stated Value (as defined in Item 4) and additional Shares will be issuable upon conversion of the Series A Preferred when such dividends are taken into account. Shares of Series A Preferred are convertible into Shares at a rate calculated by dividing (i) the Stated Value plus an amount per share equal to dividends accrued and unpaid through the date of determination, by an initial conversion price of $3.00, subject to customary adjustments (the "Conversion Price"), and subject to the Exchange Cap and the Beneficial Ownership limitation, each as defined above. The Issuer intends to hold a meeting of its shareholders to approve the issuance of Shares upon conversion of the Series A Preferred in excess of the Exchange Cap and to permit the increase of the maximum Beneficial Ownership Limitation percentage to 49.99% ("Shareholder Approval"). The shares of Series A Preferred are subject to automatic redemption for cash upon a fundamental transaction by the Issuer, which includes a merger, sale of all or substantially all the assets of the Issuer, recapitalization, or the sale by the Issuer of shares resulting in more than 50% ownership by a person or group. In such event, the redemption price would be equal to the greater of the Stated Value of the Series A Preferred plus dividends accrued thereon or the consideration per Share in the event of an all-cash fundamental transaction (or in a fundamental transaction where that is not all-cash, the volume-weighted average price of the Issuer's Shares on the day immediately preceding the closing of the fundamental transaction).
The Series A Preferred is subject to the Beneficial Ownership Limitation and, unless and until shareholder approval is obtained, the Exchange Cap.
Except as otherwise set forth in the Certificate of Designations, the Series A Preferred will vote together with the Shares on an as-converted basis based on the number of Shares into which such shares of Series A Preferred are then convertible, subject to the Beneficial Ownership Limitation and the Exchange Cap.
The Purchase Agreement provides that the Board of Directors of the Issuer (the "Board") will recommend the nomination of and recommend the shareholders of the Company vote in favor of re-electing two designees of NR-SOF (currently Thomas B. Ellis and Michael Bosco) (together, the "Board Designees") to the Board, and the Board appointed the Board Designees as directors effective immediately following the Closing. Additionally, Company will not take any action to increase the size of the Board to more than seven (7) members.
In connection with the PIPE Transaction, on November 5, 2025, the Issuer, NR-SOF and NR Co-Invest entered into a registration rights agreement (the "Registration Rights Agreement"), whereby the Issuer is required to file a shelf registration statement pursuant to the Securities Act of 1933, as amended, to register for resale the Shares issuable upon conversion of the Series A Preferred.
On October 15, 2025, the Issuer entered into a Share Purchase Agreement (the "Share Purchase Agreement") by and among the Issuer, 1001372953 Ontario Inc., an Ontario corporation and a wholly-owned subsidiary of the Issuer ("Buyer") and Cineplex Entertainment Limited Partnership, a Manitoba limited partnership ("Cineplex"), pursuant to which the Buyer agreed, immediately following the Closing of the PIPE Transaction, to acquire from Cineplex all of the issued and outstanding shares of DDC Group International, Inc. ("CDM"). Cineplex received aggregate consideration consisting of CAD$70,000,000. The Issuer funded the acquisition of CDM with a portion of the proceeds from the PIPE Transaction.
The foregoing descriptions of the Purchase Agreement, the Certificate of Designations, and the Registration Rights Agreement are qualified in their entirety by reference to the full text of the Purchase Agreement, the Certificate of Designations, and the Registration Rights Agreement, which are included as Exhibit 99.1, Exhibit 99.2, and Exhibit 99.3, respectively, hereto and are incorporated by reference herein.
Effective upon the Closing, Messrs. Ellis and Bosco were designated by NR-SOF to serve as directors of the Issuer as described above, and, in such capacity, may have influence over the corporate activities of the Issuer, including activities which may relate to items described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Other than in the Board Designees' capacity as a director of the Issuer following such appointment, no Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein; however, the Reporting Persons, at any time and from time to time, may review, reconsider and change their intention with respect to any and all matters referred to in Item 4. |
| (a) | The aggregate percentage of Shares reported owned by each person named herein is based upon 10,518,932 Shares outstanding as of November 5, 2025, plus the Shares underlying the Series A Preferred that may be converted by the Reporting Persons, subject to the Beneficial Ownership Limitation.
Pursuant to the terms of the Series A Preferred, the Reporting Persons cannot convert any of the Series A Preferred if the Reporting Persons would beneficially own, after any such conversion, more than the Beneficial Ownership Limitation. The percentages set forth herein for each of the Reporting Persons gives effect to the Beneficial Ownership Limitation. The conversion of the Series A Preferred is also subject to the Exchange Cap.
As of the date hereof, NR-SOF may be deemed to directly beneficially own 2,627,269 Shares, constituting approximately 19.99% of the Shares that would be outstanding following conversion of the Series A Preferred into Shares, giving effect to the Beneficial Ownership Limitation but not giving effect to the Exchange Cap. The reported beneficial ownership excludes all other Shares that are issuable upon conversion of the shares of Series A Preferred but are not presently issuable due to the Beneficial Ownership Limitation.
As of the date hereof, NR Co-Invest may be deemed to directly beneficially own 1,666,667 Shares, which number does not give effect to the Exchange Cap.
As of the date hereof, NR GP, as the general partner of NR-SOF and NR Co-Invest, may be deemed to beneficially own 2,627,269 Shares, constituting approximately 19.99% of the Shares that would be outstanding following conversion of the Series A Preferred into Shares, giving effect to the Beneficial Ownership Limitation but not giving effect to the Exchange Cap. The reported beneficial ownership excludes all other Shares that are issuable upon conversion of the shares of Series A Preferred but are not presently issuable due to the Beneficial Ownership Limitation.
Each of Mr. Hammer and Mr. Ellis, as the members of NR GP, may be deemed to beneficially own 2,627,269 Shares, constituting approximately 19.99% of the Shares that would be outstanding following conversion of the Series A Preferred into Shares, giving effect to the Beneficial Ownership Limitation but not giving effect to the Exchange Cap. The reported beneficial ownership excludes all other Shares that are issuable upon conversion of the shares of Series A Preferred but are not presently issuable due to the Beneficial Ownership Limitation.
The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer that he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own. |
| | The disclosure with respect to the PIPE Transaction set forth in Item 4 above, including the descriptions of the Purchase Agreement, the Certificate of Designations, and the Registration Rights Agreement, is incorporated herein by reference.
On November 12, 2025, the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.4 and is incorporated herein by reference.
The Purchase Agreement includes a standstill provision pursuant to which NR-SOF has agreed that neither it nor any of its affiliates or associates will, for a period of two years after the PIPE Transaction, initiate any corporate action relating to (i) the nomination of any individual to serve as a director of the Issuer (other than the pursuant to the director designation right described above), or (ii) any business combination, merger, tender offer, sale or acquisition of material assets, recapitalization, reorganization or any other extraordinary transaction involving the Issuer or its subsidiaries, subject to certain exceptions.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer. |
