SGE Strong Global Entertainment Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): September 25, 2024

 

STRONG GLOBAL ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

 

British Columbia, Canada		001-41688		N/A
(State or other jurisdiction of		(Commission		(IRS Employer
incorporation or organization)		File No.)		Identification Number)

 

108 Gateway Blvd, Suite 204 Mooresville, NC		28117
(Address of principal executive offices)		(Zip Code)

 

(704) 471-6784

(Registrant’s telephone number including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Class A Common Voting Shares, without par value		SGE		NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.01

Completion of Acquisition or Disposition of Assets.

 

Combination with Fundamental Global Inc.

 

On September 30, 2024, Strong Global Entertainment, Inc. (“SGE”), Fundamental Global Holdings BC ULC, an unlimited liability company existing under the laws of the Province of British Columbia and majority owner of SGE (“FG BC”), and 1483530 B.C. Ltd., a newly formed subsidiary of FG BC (“Subco”), completed an arrangement transaction pursuant to the terms of the Arrangement Agreement, dated May 30, 2024 (the “Arrangement Agreement”) among such parties, and implemented the plan of arrangement contemplated therein (the “Plan of Arrangement”). In connection with the Arrangement Agreement, among other matters, shares of Class A Common Voting shares of SGE (the “SGE Common Shares”) were deemed to be transferred by the holders thereof to FG BC in exchange for the arrangement consideration (“Arrangement Consideration”) consisting of 1.5 shares of the common stock of Fundamental Global Inc., the indirect sole owner of FG BC (the “Company”), with any fractional shares being rounded up to the nearest whole share.

 

The Arrangement Agreement and Plan of Arrangement were approved and authorized by stockholders of SGE on September 17, 2024, and a final order of the Supreme Court of British Columbia approving and authorizing the transaction was issued on September 23, 2024.

 

The issuance of the Arrangement Consideration was registered pursuant to a joint proxy statement/prospectus on Form S-4 (Registration No. 333-280346) (as amended, the “Joint Proxy Statement/Prospectus”) filed by the Company with the Securities Exchange Commission (the “Commission”) and declared effective on July 31, 2024 and filed as definitive proxy materials by SGE on August 13, 2024.

 

The Joint Proxy Statement/Prospectus contains among other things (i) summary descriptions of the Arrangement Agreement and Plan of Arrangement (see section titled “Arrangement Agreement and Plan of Arrangement” beginning on page 69), each of which is included as an exhibit thereto, (ii) historical financial statements of the parties (see “Financial Statements” beginning on page F-1) and pro forma financial information (see “Unaudited Pro Forma Combined Financial Information” beginning on page 14), and (iii) information regarding certain relationships and related transactions (see “Certain Relationships and Related Person Transactions” beginning on page 101), which descriptions are incorporated herein by reference. The summary descriptions of the Arrangement Agreement and Plan of Arrangement are not complete and are qualified in their entirety by reference to the full text of such documents filed with the Joint Proxy Statement/Prospectus.

 

Sale by SGE of Strong/MDI

 

On September 25, 2024, SGE completed the previously announced transfer of its subsidiary, Strong/MDI Screen Systems, Inc. (“MDI”), to FG Acquisition Corp., a Canadian special purpose acquisition company (“FGAC”), which was renamed Saltire Holdings, Ltd (“Saltire”). Pursuant to the acquisition agreement, dated May 3, 2024 (the “Acquisition Agreement”), SGE received the equivalent of approximately $29.5 million in cash and preferred and common shares of Saltire, consisting of: (i) cash consideration in an amount equal to 25% of the net proceeds of a concurrent private placement (or $0.8 million), (ii) the issuance of preferred shares with an initial preferred share redemption amount of $9.0 million, and (iii) the issuance $19.7 million of Saltire common shares. The summary description of the Acquisition Agreement is not complete and is qualified in its entirety by reference to the full text of such document filed with the Commission.

 

The Company, which is SGE’s indirect controlling shareholder, held an investment in FGAC. A description of the relationships between the Company and SGE is included in “Certain Relationships and Related Person Transactions” beginning on page 101 of the Joint Proxy Statement/Prospectus and is incorporated herein by reference.

 

Item 3.01

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

Prior to the completion of the Plan of Arrangement, SGE’s common stock was listed and traded on the New York Stock Exchange (“NYSE”) under the trading symbol “SGE.” In connection with the completion of the Plan of Arrangement, SGE will be delisted from NYSE prior to the open of trading on September 30, 2024. SGE will also file with the SEC a Form 15 requesting that the reporting obligations of SGE under Sections 13(a) and 15(d) of the Exchange Act be suspended.

 

 

Item 7.01

Regulation FD Disclosure.

 

On September 26, 2024, SGE and the Company issued a press release in connection with the completion of the MDI sale and on September 30, 2024, SGE and the Company issued a press release in connection with the completion of the Arrangement Agreement and Plan of Arrangement. Those press releases are furnished as Exhibits 99.1 and 99.2 hereto and are incorporated herein by reference.

 

The information in this Item 7.01 and in Exhibit 99.1 attached hereto is furnished pursuant to the rules and regulations of the SEC and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press Release, September 26, 2024
99.2		Press Release, September 30, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	STRONG GLOBAL ENTERTAINMENT, INC.
Date: October 2, 2024	By:	/s/ Todd R. Major
		Todd R. Major
		Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

Strong Global Entertainment Announces Closing of Sale of Strong/MDI for Approximately $30 Million

 

Mooresville, NC, September 26, 2024 –Strong Global Entertainment, Inc. (NYSE: SGE) (“Strong Global”) and Fundamental Global Inc. (Nasdaq: FGF, FGFPP) (“Fundamental Global”) are pleased to announce the closing of the previously announced sale of Strong/MDI Screen Systems, Inc. (“MDI”) from Strong Global to Saltire Holdings Ltd (“Saltire”).

 

Mark Roberson, Chief Executive Officer of Strong Global, commented, “We are pleased to announce the closing of the sale of MDI. This is one element of our previously announced strategy to streamline operations, increase liquidity and drive shareholder value. We expect the transaction to result in a net pre-tax financial statement gain in excess of $25 million. At closing, Strong Global holds approximately 37% of the outstanding common shares of Saltire, and we look forward to participating in the Saltires’ long term growth strategy.”

 

At closing, and after a working capital adjustment, Strong Global received total consideration of $29.5 million, consisting of $0.8 million of cash, $9.0 million of preferred shares of Saltire, and $19.7 million of common shares of Saltire.

 

Prior to the Closing, Strong Global did not own or control any securities of Saltire. Strong Global received 1,972,723 common shares and 900,000 series A preferred shares of Saltire as consideration under the transaction.

 

Strong Global may acquire additional securities including on the open market or through private acquisitions or sell the securities including on the open market or through private dispositions in the future depending on market conditions, general economic and industry conditions, Saltire’s business and financial condition, and/or other relevant factors, and Strong Global may develop such plans or intentions in the future.

 

A copy of the Early Warning Report to be filed by Strong Global in connection with the transaction described above will be available on its SEDAR+ profile at www.sedarplus.ca.

 

About Strong Global Entertainment, Inc.

 

Strong Global Entertainment, Inc., a majority owned subsidiary of Fundamental Global Inc., is a leader in the entertainment industry, providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years.

 

About Fundamental Global Inc.

 

Fundamental Global Inc. (Nasdaq: FGF, FGFPP) and its subsidiaries engage in diverse business activities including reinsurance, asset management, merchant banking, manufacturing and managed services.

 

The FG® logo and Fundamental Global® are registered trademarks of Fundamental Global LLC.

 

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “budget,” “can,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “evaluate,” “forecast,” “goal,” “guidance,” “indicate,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “possibly,” “potential,” “predict,” “probable,” “probably,” “pro-forma,” “project,” “seek,” “should,” “target,” “view,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative thereof or other variations thereon or comparable terminology. In particular, discussions and statements regarding the Company’s future business plans and initiatives are forward-looking in nature. We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these to be reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, and may impact our ability to implement and execute on our future business plans and initiatives. Management cautions that the forward-looking statements in this release are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation: risks associated with our inability to identify and realize business opportunities, and the undertaking of any new such opportunities; our lack of operating history or established reputation in the reinsurance industry; our inability to obtain or maintain the necessary approvals to operate reinsurance subsidiaries; risks associated with operating in the reinsurance industry, including inadequately priced insured risks, credit risk associated with brokers we may do business with, and inadequate retrocessional coverage; our inability to execute on our investment and investment management strategy, including our strategy to invest in the risk capital of special purpose acquisition companies (SPACs); our ability to maintain and expand our revenue streams to compensate for the lower demand for our digital cinema products and installation services; potential interruptions of supplier relationships or higher prices charged by suppliers in connection with our Strong Global business; our ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments; our ability to maintain Strong Global’s brand and reputation and retain or replace its significant customers; challenges associated with Strong Global’s long sales cycles; the impact of a challenging global economic environment or a downturn in the markets; the effects of economic, public health, and political conditions that impact business and consumer confidence and spending, including rising interest rates, periods of heightened inflation and market instability; potential loss of value of investments; risk of becoming an investment company; fluctuations in our short-term results as we implement our new business strategy; risks of being unable to attract and retain qualified management and personnel to implement and execute on our business and growth strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective system of internal controls; our limited operating history as a public company; the requirements of being a public company and losing our status as a smaller reporting company or becoming an accelerated filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling stockholders; potential conflicts of interest between us and our directors and executive officers; risks associated with our related party transactions and investments; and risks associated with our investments in SPACs, including the failure of any such SPAC to complete its initial business combination. Our expectations and future plans and initiatives may not be realized. If one of these risks or uncertainties materializes, or if our underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. You are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements are made only as of the date hereof and do not necessarily reflect our outlook at any other point in time. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect new information, future events or developments.

 

Investor Relations Contacts:

 

IR@strong-entertainment.com

 

investors@fundamentalglobal.com

 

 

Exhibit 99.2

 

 

 

Fundamental Global Completes Combination with Strong Global Entertainment

 

Business Combination Advances Strategic Streamlining Efforts

 

Mooresville, NC, September 30, 2024 – Fundamental Global Inc. (Nasdaq: FGF, FGFPP) (“Fundamental Global”) has completed its combination with Strong Global Entertainment, Inc. (NYSE: SGE) (“Strong Global Entertainment”) pursuant to a previously announced arrangement agreement.

 

The combination received overwhelming support, with more than 99% of the shares cast at the Strong Global shareholders meeting on September 17, 2024 voting to approve the transaction.

 

Shareholders of Strong Global Entertainment will receive 1.5 common shares of Fundamental Global for each common share they hold.

 

Kyle Cerminara, Chief Executive Officer of Fundamental Global, stated, “We have completed two significant transactions this week: our combination with Strong Global Entertainment and the sale of Strong/MDI to Saltire Holdings. These actions are part of our strategy to streamline operations, reduce operating costs, and boost liquidity.

 

About Fundamental Global Inc.

 

Fundamental Global Inc. (Nasdaq: FGF, FGFPP) and its subsidiaries engage in diverse business activities including reinsurance, asset management, merchant banking, and managed services.

 

The FG^® logo and Fundamental Global^® are registered trademarks of Fundamental Global LLC.

 

Forward-Looking Statements

 

In addition to the historical information included herein, this press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” in the final prospectus related to the public offering filed with the SEC, our Annual Report on Form 10-K for the year ended December 31, 2023, and the Company’s other reports filed with the SEC. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

 

Investor Relations Contacts:
investors@fundamentalglobal.com

 

 

v3.24.3

Cover	Sep. 25, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 25, 2024
Entity File Number	001-41688
Entity Registrant Name	STRONG GLOBAL ENTERTAINMENT, INC.
Entity Central Index Key	0001893448
Entity Incorporation, State or Country Code	A1
Entity Address, Address Line One	108 Gateway Blvd
Entity Address, Address Line Two	Suite 204
Entity Address, City or Town	Mooresville
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28117
City Area Code	(704)
Local Phone Number	471-6784
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Voting Shares, without par value
Trading Symbol	SGE
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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