- The NYSE has granted the Company an initial cure period of up
to six months to regain compliance, subject to ongoing NYSE
monitoring
- The Company is providing an update on its ongoing financial
review process and debt restructuring
Eros STX Global Corporation (NYSE: ESGC) (“ErosSTX” or the
“Company”) announces that the New York Stock Exchange (the “NYSE”)
notified the Company that it is not in compliance with the NYSE
Listed Company Manual listing requirements for (i) the timely
filing of its Annual Report and (ii) the minimum trading price for
its common stock.
Such notifications are standard operating procedure for the NYSE
in such situations, as is this announcement by the Company. The
NYSE notifications have no immediate impact on the listing of the
Company’s common stock, which will continue to trade on the NYSE,
subject to the Company’s compliance with the other continued
listing requirements of the NYSE. Under the NYSE rules, the Company
has up to six months to regain compliance, subject to monitoring by
the NYSE.
The Company is also providing an update on its ongoing financial
review process and debt restructuring.
Annual Report Filing Delinquency and Ongoing Financial Review
Process Update
On August 18, 2021, the NYSE notified the Company that it is not
in compliance with Section 802.01E of the NYSE Listed Company
Manual due to the Company’s previous disclosure of the delay in
filing with the Securities and Exchange Commission (“SEC”) its
Annual Report on Form 20-F for the fiscal year ended March 31,
2021. Under the NYSE rules, the Company will have up to six months
from August 18, 2021 to file its Annual Report. The Company can
regain compliance with the NYSE listing standard by filing the
Annual Report before such date. If the Company fails to file its
Annual Report within six months from the filing due date, the NYSE
may, in its sole discretion, allow the Company’s securities to
trade for up to an additional six months depending on specific
circumstances, as outlined in Section 802.01E of the NYSE Listed
Company Manual. It is expected by the NYSE that the Company will
submit an official request for the NYSE’s consideration at the
appropriate time. If the NYSE determines that an additional six
month trading period is not appropriate, suspension and delisting
procedures will commence pursuant to Section 804.00 of the NYSE
Listed Company Manual. If the NYSE determines that an additional
trading period of up to six months is appropriate and the Company
fails to file its Annual Report and any subsequent delayed filings
by the end of that period, suspension and delisting procedures will
generally commence. Regardless of the procedures described above,
the NYSE may commence delisting proceedings at any time during the
period that is available to the Company to complete the filing of
the Annual Report, if circumstances warrant.
As previously disclosed in a Form 12b-25 filed with the SEC on
August 3, 2021, the Company is unable to file its Annual Report
without unreasonable effort or expense primarily because the
Company’s Audit Committee is currently conducting a formal internal
review of certain accounting practices and internal controls
related to its Eros subsidiaries. Significant revenue from the Eros
subsidiaries may not have been appropriately recognized during the
fiscal year ending March 31, 2020, which was before the completion
of the merger with STX Filmworks, Inc (“STX”).
Even though the Audit Committee has not completed the internal
review, during the course of its review it has determined that
approximately $85.5 million of Eros pre-merger revenue was not
properly recognized in the fiscal year ended March 31, 2020. The
Company cannot determine at this time when it will conclude the
remaining work necessary to complete the internal review,
preparation of the financial statements and assessment of its
internal controls over financial reporting.
Share Price Below Compliance Standard
On August 20, 2021, the NYSE notified the Company that it is not
in compliance with Section 802.01C of the NYSE Listed Company
Manual because the Company’s average closing share price was less
than $1.00 over a consecutive 30 trading-day period. Under the NYSE
rules, the Company will have up to six months from August 20, 2021
to cure the price condition. The Company can regain compliance at
any time during the cure period if on the last trading day of any
calendar month the Company has (i) a closing share price of at
least $1.00 and (ii) an average closing share price of at least
$1.00 over a consecutive 30 trading-day period.
Debt Restructuring Update
The Company is progressing with its plan to address requirements
to have delivered audited financial statements by July 31, 2021 and
the near-term debt maturities in connection with (i) the $150.1
million outstanding under the Asset-backed credit facility with
JPMorgan (the “JPM Facility”) that matures October 7, 2021, (ii)
the $22.7 million outstanding under the STX Mezzanine Debt Facility
that matures July 7, 2022 (“STX Mezzanine Debt”) and (iii) the
Company’s £50 million ($69 million) 6.50% UK retail bonds that
mature October 15, 2021 (the “UK Retail Bonds”).
In the Company’s press release dated August 3, 2021, STX
announced its possible plan to repay both the JPM Facility as well
as the STX Mezzanine Debt. Since then, the JPM Facility and STX
Mezzanine Debt financial statement delivery date has been extended
from July 31, 2021 to September 27, 2021.
To address the UK Retail Bonds, the Company has submitted a
request to bondholders to, among other things, extend the fiscal
2021 financial statement delivery date from July 31, 2021 to
November 30, 2021, as well as to extend the maturity date of the
bonds to April 15, 2023, as disclosed in the Company’s Form 6-K
furnished to the SEC on August 10, 2021. The bondholder meeting
will be held on September 3, 2021. The meeting requires a quorum of
at least 75% of the Bonds outstanding and for the proposal to pass
at least 75% of the votes cast must be in favor. If the quorum is
not achieved at this first meeting, the Company has the right, and
expects to, adjourn and convene a second meeting as soon as
September 17, 2021. The second meeting requires a quorum of at
least 25% of the Bonds outstanding and at least 75% of the votes
cast in favor of the proposal.
Nothing in this document constitutes an offer to buy or the
solicitation of an offer to sell securities in any jurisdiction in
which such offer or solicitation would be unlawful.
About Eros STX Global Corporation:
Eros STX Global Corporation, (“ErosSTX”) (NYSE: ESGC) is a
global entertainment company that acquires, co-produces and
distributes films, digital content and music across multiple
formats such as theatrical, television and OTT digital media
streaming to consumers around the world. Eros International Plc
changed its name to Eros STX Global Corporation pursuant to the
July 2020 merger with STX Entertainment, merging two international
media and entertainment groups to create a global entertainment
company with a presence in over 150 countries. ErosSTX delivers
star-driven premium feature film and episodic content across a
multitude of platforms at the intersection of the world's most
dynamic and fastest-growing global markets, including US, India,
Middle East, Asia and China. For further information, please visit
ErosSTX.com.
Special Note Regarding Forward Looking Statements:
Information provided in this communication includes
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, and
such statements are subject to the safe harbors created thereby.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as “approximately,”
“anticipate,” “believe,” “estimate,” “continue,” “could,” “expect,”
“future,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “seek,” “should,” “will”, “trending” and similar
expressions. Those statements include, among other things, the
discussions of the Company’s business strategy and expectations
concerning its and the Company’s market position and future
operations. All such forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially from those that we are expecting, including, without
limitation: our ability to successfully and cost-effectively source
film content; the Company’s ability to achieve the desired growth
rate of Eros Now; our ability to maintain or raise sufficient
capital; delays, cost overruns, cancellation or abandonment of the
completion or release of the Company’s films; our ability to
predict the popularity of its films, or changing consumer tastes;
our ability to maintain existing rights, and to acquire new rights,
to film content; our ability to successfully defend any future
class action lawsuits we are a party to in the U.S.; anonymous
letters to regulators or business associates or anonymous
allegations on social media regarding the Company’s business
practices, accounting practices and/or officers and directors; our
ability to recoup the full amount of box office revenues to which
it is entitled due to underreporting of box office receipts by
theater operators; our dependence on our relationships with theater
operators and other industry participants to exploit the Company’s
film content; our ability to mitigate risks relating to
distribution and collection in international markets; our ability
to compete with other forms of entertainment; our ability to combat
piracy and to protect our intellectual property; our ability to
maintain an effective system of internal control over financial
reporting; contingent liabilities that may materialize, our
exposure to liabilities on account of unfavorable
judgments/decisions in relation to legal proceedings involving the
Company or its subsidiaries and certain of its directors and
officers; our ability to successfully respond to technological
changes; our ability to satisfy debt obligations, fund working
capital and pay dividends; the monetary and fiscal policies of
countries around the world, inflation, deflation, unanticipated
turbulence in interest rates, foreign exchange rates, equity prices
or other rates or prices; our ability to address the risks
associated with acquisition opportunities; risks that the ongoing
novel coronavirus pandemic and its spread, and related public
health measures, may have material adverse effects on our business,
financial position, results of operations and/or cash flows;
challenges, disruptions and costs of the Merger and related
transactions, integrating the Eros and STX businesses and achieving
anticipated synergies, and the risk that such synergies will take
longer to realize than expected or may not be realized in whole or
in part; the amount of any costs, fees, expenses, impairments and
charges related to the Merger and related transactions; completion
of the contemplated refinancing transactions; and uncertainty as to
the long-term value of the Company’s ordinary shares, and the
completion of the Company’s fiscal 2021 audit and filing of its
Annual Report on Form 20-F.
The forward-looking statements contained in this communication
are based on historical performance and management’s current plans,
estimates and expectations in light of information currently
available and are subject to uncertainty and changes in
circumstances. There can be no assurance that future developments
affecting the Company will be those that it has anticipated. Actual
results may differ materially from these expectations due to
changes in global, regional or local political, economic, business,
competitive, market, regulatory and other factors, many of which
are beyond the Company’s control. Should one or more of these risks
or uncertainties materialize or should any of the Company’s
assumptions prove to be incorrect, the Company’s actual results may
vary in material respects from what the Company may have expressed
or implied by these forward-looking statements. The Company
cautions that you should not place undue reliance on any of its
forward-looking statements. Any forward-looking statement made by
the Company in this communication speaks only as of the date on
which the Company makes it. Factors or events that could cause the
Company’s actual results to differ may emerge from time to time,
and it is not possible for the Company to predict all of them. The
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20210825005816/en/
Investor Contact: Drew Borst EVP, Investor Relations
& Business Development ErosSTX Global Corporation
drew@erosstx.com
Eros STX Global (NYSE:ESGC)
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