# EDGAR Filing Document

**Accession Number:** 0001893448
**File Stem:** 0001493152-23-001678
**Filing Date:** 2023-1
**Character Count:** 1435080
**Document Hash:** 4b9f4459e37616923c78629911e1e3c7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-001678.hdr.sgml**: 20230118

**ACCESSION NUMBER**: 0001493152-23-001678

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 27

**FILED AS OF DATE**: 20230118

**DATE AS OF CHANGE**: 20230117

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Strong Global Entertainment, Inc
- **CENTRAL INDEX KEY:** 0001893448
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** Z4

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-264165
- **FILM NUMBER:** 23532490

**BUSINESS ADDRESS:**
- **STREET 1:** 5960 FAIRVIEW ROAD, SUITE 275
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28210
- **BUSINESS PHONE:** 704-994-8279

**MAIL ADDRESS:**
- **STREET 1:** 5960 FAIRVIEW ROAD, SUITE 275
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28210

**As filed with the United States Securities and Exchange Commission on January 17, 2023.** 

**Registration No. 333-264165**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM S-1/A**

**(AMENDMENT NO. 8)** 

**REGISTRATION STATEMENT UNDER**

**THE SECURITIES ACT OF 1933**

**<u>Strong Global Entertainment, Inc.</u>**

*(Exact Name of Registrant as Specified in Its Charter)*

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| | | |
|:---|:---|:---|
| **British Columbia, Canada** | **3861** | **N/A** |
| *(State or Other Jurisdiction of* | *(Primary Standard Industrial* | *(I.R.S. Employer* |
| *Incorporation or Organization)* | *Classification Code Number)* | *Identification Number)* |

---

**5960 Fairview Road, Suite 275**

**Charlotte, NC 28210**

**(704) 471-6784**

*(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)*

**Mark D. Roberson**

**Chief Executive Officer**

**5960 Fairview Road, Suite 275**

**Charlotte, NC 28210**

**(704) 471-6784**

*(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)*

**Copies to:**

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| | |
|:---|:---|
| **Mitchell Nussbaum, Esq.** | **Oded Har-Even, Esq.** |
| **Janeane R. Ferrari, Esq.** | **Ron Ben-Bassat, Esq.** |
| **Loeb & Loeb LLP** | **Angela Gomes, Esq.** |
| **345 Park Avenue** | **Sullivan & Worcester LLP** |
| **New York, NY 10154** | **1633 Broadway** |
| **Phone: (212) 407-4000** | **New York, NY 10019** |
| **Fax: (212) 407-4990** | **Phone: (212) 660-3000** |
|  | **Fax: (212) 660-3001** |

---

**Approximate date of commencement of proposed sale to the public:** As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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 7(a)(2)(B) of the Securities Act. ☒

**The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.**

**The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.**

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| | | |
|:---|:---|:---|
| **PRELIMINARY PROSPECTUS** | **SUBJECT TO COMPLETION** | **DATED JANUARY 17, 2023** |

---

**2,000,000** **Shares**

**Class A Common Voting Shares**

![](logo_001.jpg)

**Strong Global Entertainment, Inc.**

This is a firm commitment initial public offering of Class A Common Voting Shares ("Class A Shares" or "Common Shares") of Strong Global Entertainment, Inc., a company incorporated under the Business Corporations Act (British Columbia) ("we", "us", "our" or the "Company"). We are selling Common Shares described below. Prior to this offering, there has been no public market for our Common Shares. We anticipate that the initial public offering price of our Common Shares will be $5.00.

We have applied to have our Common Shares listed on the New York Stock Exchange American ("NYSE American") under the symbol "SGE." No assurance can be given that our application will be approved. We believe that upon completion of the offering contemplated by this prospectus, we will meet the standards for listing on the NYSE American. However, we cannot guarantee that we will be successful in listing our Common Shares on the NYSE American. We will not consummate this offering unless our Common Shares will be listed on the NYSE American.

We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act (the "JOBS Act") and have elected to comply with certain reduced public company reporting requirements. See "Prospectus Summary—Emerging Growth Company Status" for additional information.

After the completion of this offering, FG Group Holdings Inc., a Nevada corporation (formerly Ballantyne Strong, Inc.) ("FG Group Holdings" or "Parent"), will continue to control a majority of the voting power of our Common Shares eligible to vote in the election of our directors. In addition, FG Group Holdings will indirectly own all of our issued and outstanding Class B Limited Voting shares ("Class B Shares") which provide the holders thereof certain board appointment rights. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE American. See "*Management— Director Independence and Controlled Company Exception*" and "*Principal Shareholders*."

**Investing in our Common Shares involves a high degree of risk. See "Risk Factors" beginning on page 17 of this prospectus for a discussion of the risk that you should consider in connection with an investment in our Common Shares.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

**We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.**

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| | | |
|:---|:---|:---|
|  | **Per Share** | **Total** |
| Initial public offering price | $— | $— |
| Underwriting discounts and commissions<sup>(1)</sup> | $— | $— |
| Proceeds to us, before expenses | $— | $— |

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(1) In
 addition, we have agreed to reimburse the representative of the underwriters for certain fees and expenses, including a non-accountable
 expense allowance equal to 1% of the initial public offering price payable to the underwriters. We refer you to "Underwriting"
 beginning on page 97 for additional information regarding underwriters' compensation.

We have granted a 45-day option to the representative of the underwriters to purchase up to an additional 300,000 Common Shares, or 15% of the total number of Common Shares sold in this offering, solely to cover over-allotments, if any. If the underwriters exercise their option in full, the total underwriting discounts and commissions payable by us will be $805,000, and the total proceeds to us, before expenses, will be $10,695,000.

The underwriters expect to deliver the Common Shares to purchasers on or about , 2023.

**ThinkEquity**

The date of this prospectus is , 2023.

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**STRONG GLOBAL ENTERTAINMENT, INC.**

**TABLE OF CONTENTS**

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| | |
|:---|:---|
|  | **Page** |
| [Prospectus Summary](#abc_001) | 1 |
| [The Offering](#abc_002) | 12 |
| [Summary Historical and Other Combined Financial Data](#abc_003) | 13 |
| [Risk Factors](#abc_004) | 17 |
| [Special Note Regarding Forward-Looking Statements](#abc_005) | 42 |
| [Use of Proceeds](#abc_006) | 43 |
| [Dividend Policy](#abc_007) | 44 |
| [Capitalization](#abc_008) | 45 |
| [Dilution](#abc_009) | 46 |
| [The Separation Transaction](#abc_010) | 47 |
| [Unaudited Pro Forma Condensed Combined Financial Statements](#abc_011) | 49 |
| [Selected Historical and Other Combined Financial Data](#abc_012) | 53 |
| [Management's Discussion and Analysis of Financial Condition and Results of Operations](#abc_013) | 56 |
| [Business](#abc_014) | 66 |
| [Management](#abc_015) | 69 |
| [Executive and Director Compensation](#abc_016) | 76 |
| [Certain Relationships and Related Party Transactions](#abc_017) | 82 |
| [Principal Shareholders](#abc_018) | 85 |
| [Description of Securities](#abc_019) | 86 |
| [Material U.S. Federal Tax Consequences](#abc_020) | 89 |
| [Certain Canadian Federal Income Tax Consequences to Holders of our Common Shares that are Non-Resident in Canada](#abc_021) | 94 |
| [Shares Eligible for Future Sale](#abc_022) | 96 |
| [Underwriting](#abc_023) | 97 |
| [Legal Matters](#abc_024) | 105 |
| [Experts](#abc_025) | 105 |
| [Where You Can Find More Information](#abc_026) | 105 |
| [Index to Financial Statements](#abc_027) | F-1 |

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Neither the Company nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by or on behalf of the Company. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide to you. We are offering to sell, and seeking offers to buy, Common Shares only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Common Shares.

Unless the context requires otherwise, (a) references to "Strong Global Entertainment," the "Company," "we," "us" and "our" refer to Strong Global Entertainment, Inc., and its consolidated subsidiaries after giving effect to the transactions described under the section titled "The Separation Transaction" (the "Separation"), and (b) references to "FG Group Holdings" and "Parent" refer to FG Group Holdings Inc.., Strong Global Entertainment's indirect parent, and its consolidated subsidiaries other than Strong Global Entertainment and Strong Global Entertainment's subsidiaries. Unless the context requires otherwise, statements relating to our history in this prospectus describe the history of FG Group Holdings' Entertainment operating segment (the "Entertainment Business").

i

You may only rely on the information contained in this prospectus or that we have referred you to. We have not authorized anyone to provide you with different information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the Common Shares offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any Common Shares in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made in connection with this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or that the information contained by reference to this prospectus is correct as of any time after its date.

**Until , 2023, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.**

**INDUSTRY AND OTHER DATA**

We obtained the industry, market and competitive position data in this prospectus from our own internal estimates and research as well as from industry and general publications and research, surveys and studies conducted by third parties. While we believe that the statistical data, market data and other industry data and forecasts are reliable, we have not independently verified the data. Information that is based on estimates, forecasts, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information based on various factors, including those discussed in the section titled "Risk Factors."

**TRADEMARKS, SERVICE MARKS AND TRADE NAMES**

We own or have rights to use a number of registered and common law trademarks, service marks and/or trade names in connection with our business in the United States and/or in certain foreign jurisdictions. Strong Global Entertainment will own these trademarks after completion of the Separation.

Solely for convenience, most trademarks, service marks, logos and trade names referred to in this prospectus are without the® and™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This prospectus contains additional trademarks, service marks and trade names of others, which are the property of their respective owners. All trademarks, service marks and trade names appearing in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies' trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

ii

**PROSPECTUS SUMMARY**

*This summary highlights certain information about us and this offering contained elsewhere in this prospectus, but it is not complete and does not contain all of the information you should consider before investing in our Common Shares. In addition to this summary, you should read this entire prospectus carefully, including the risks of investing in our Common Shares and the other information discussed in the section titled "Risk Factors," and the financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements."*

*You should read the entire prospectus carefully, including the "Risk Factors" beginning on page 17, and our financial statements and the notes to the financial statements included elsewhere in this prospectus, and our management's discussion and analysis of financial condition and results of operations. As used throughout this prospectus, the terms "Strong Global Entertainment," the "Company," "we," "us," or "our" refer to Strong Global Entertainment, Inc.*

*We describe in this prospectus the businesses that will be contributed to us by FG Group Holdings (previously known as Ballantyne Strong, Inc.) as part of our separation from FG Group Holdings as if they were our businesses for all historical periods described. Please see the section titled "The Separation Transaction" for a description of the Separation. Our historical and unaudited pro forma financial information included in this prospectus is not necessarily indicative of our future financial condition, results of operations or cash flows, nor does it reflect what our financial condition, results of operations or cash flows would have been as an independent public company during the periods presented. In particular, the historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows.*

**General**

We believe Strong Global Entertainment is positioned to be a leader in the entertainment industry, as FG Group Holdings has provided mission critical products and services to cinema exhibitors and entertainment venues for over 80 years.

We believe that we have cultivated a leadership position built on our exceptional reputation for quality and service in the industry. We manufacture and distribute premium large format projection screens, provide comprehensive managed services, technical support and related products and services primarily to cinema exhibitors, theme parks, educational institutions, and similar venues.

As a manufacturer and distributor of projection screens systems, we have contractual relationships to supply projection screens to major cinema exhibitors, including IMAX Corporation ("IMAX"), AMC Entertainment Holdings ("AMC"), and Cinemark Holdings, Inc. ("Cinemark"), and other cinema operators worldwide. In addition to traditional projection screens, we also manufacture and distribute our *Eclipse* curvilinear screens, which are specially designed for theme parks, immersive exhibitions, as well as simulation applications.

We also provide maintenance, repair, installation, network support services and other services to cinema operators, primarily in the United States. Many of our customers choose annual managed service arrangements for maintenance and repair services. We also provide maintenance services to customers on a time and materials basis. Our field service and Network Operations Center ("NOC") staff work hand in hand to monitor and resolve system and other issues for our customers. Our NOC, staffed by software engineers and systems technicians, operates 24/7/365 and monitors our customers' networked equipment remotely, often providing proactive solutions to systems' issues before they cause system failures.

We recently launched Strong Studios, Inc. ("Strong Studios"), a Delaware corporation and a wholly owned subsidiary of Strong Technical Services, Inc. ("STS"). The goal in launching Strong Studios is to expand our Entertainment Business to include content creation and production of feature films and series. The launch of Strong Studios is intended to further diversify our revenue streams and increase our addressable markets, while leveraging and expanding our existing relationships in the industry.

The coronavirus pandemic ("COVID-19") and inflationary pressures have been posing and may continue to pose challenges for our business. The COVID-19 global pandemic resulted in a significant impact to our customers and their ability and willingness to purchase our products and services. A significant number of our customers temporarily ceased operations at times during the pandemic, some of which continue to operate under COVID-19 restrictions. As such, we have experienced, and may continue to experience an impact on our results of operations.

**Key Trends Driving our Markets**

The following trends positively impact the outlook for the entertainment industry:

●  ***Post-COVID-19 Recovery —*** We believe there is pent-up demand for out-of-home entertainment that will drive favorable trends post-COVID-19 in the cinema exhibition and theme park industries. For example:

○ Avatar: The Way of Water ranks in the top 10 of highest grossing films globally of all time

○ Domestic box office gross receipts during 2022 increased approximately 64% over 2021

○ The Batman was IMAX's largest March opening since 2019

○ Spider-man ranks #3 of top grossing films domestically of all time

○ Spider-man delivered Cinemark's biggest opening night of all time

○ According to CNBC, 2023 is expected to have a much stronger slate of films than 2022, both in terms of number of films and diversity of content

The industry-wide reopening post-COVID has resulted in a recovery of our revenue amounts:

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●  ***Blockbuster Studio Releases*** – According to the Hollywood Reporter, "Box Office Rebound: "Exhibitor Carnage Is in the Past," as of October 4, 2021, the pace of Hollywood blockbuster movies scheduled for release to cinemas is poised to accelerate and is already creating stronger-than-expected demand trends. This fact, along with the return of exclusive theatrical releases, is encouraging industry analysts who are predicting movie theaters to rebound to near pre-pandemic levels by 2023.

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**Box Office Performance Driven by Hollywood Blockbusters**

●  ***Increasing Trend of Outsourcing in the Cinema Industry —*** We believe that cinema operators are increasing their use of outsourced services as they seek to reduce internal operating costs and maintain operational flexibility post-COVID-19. In September 2020, we became the exclusive provider of managed services for all of Marcus Theatres' cinema locations nationwide. These managed services include 24x7x365 monitoring, technical support, and maintenance on all projection and audio equipment across more than 1,100 screens.

●  ***Upgrade Cycle from Xenon to Laser Projection —*** We believe the transition from xenon projection to laser protection in the cinema exhibition industry will accelerate and continue over the next decade. Several exhibitors have publicly discussed plans to upgrade to an all-laser projection strategy, notably Cinemark and IMAX, to further improve the quality of the theatrical experience. In addition, in April 2022, AMC announced an agreement with Cinionic, Inc. to install Barco laser projectors in 3,500 of its U.S. auditoriums through 2026. We expect this upgrade cycle to drive increased demand for screen replacement as well as for our services to de-install, install and upgrade new and existing projection equipment.

●  ***Consolidating Industry –*** The cinema exhibition industry was consolidating via mergers and acquisitions pre-COVID-19. We expect consolidation of the supplier side of the cinema exhibition industry to accelerate post-COVID-19.

●  ***Growing Demand for Content and Acceleration of New Streaming Services –*** ![](forms-1_007.jpg)

 According to research completed by Purely Streamonomics in June 2021, the global entertainment business continues to grow and evolve, with the following factors contributing to increasingly favorable environment for content. ○ **Spending for new content continues to rise** — The gross cash amount spent producing and licensing new entertainment content (excluding sports) soared by 16.4% in 2020 to reach $220.2 billion. ○ **Global subscribers to streaming services is up** — Since 2019, the number of global customers subscribing to streaming video platforms has grown from 642 million to more than 1.1 billion, a 71% leap. Over the next few years, this rise is expected to continue to 1.6 billion in 2025. ○ **Spending in Indie content continues to surge** – As much as Netflix and the five major Hollywood Studios spend producing their own content, independently made and acquired content accounts for twice as much money globally. In 2020, global indie spending increased by +25.3% YoY and now accounts for 65.5% of the world's film and TV production activity. ○ **Budgets are Soaring** – In the U.S. average budgets across all new series – scripted, unscripted, daytime and kids – is still on the rise, up 16.5% in 2020.

**Competitive Strengths**

We believe the following strength and attributes position Strong Global Entertainment for accelerating growth.

●  ***Par*** *t **nerships with Industry Leaders —*** We believe our reputation for superior quality and customer service have made us the go-to screen provider for many of the leading operators in the industry. We provide projection screens and managed services to all of the top cinema operators in North America, including AMC, IMAX, Cinemark, Regal and many other regional cinema operators. We believe that we provide a majority of the large format projection screens used by the major operators in North America, including exclusive supply contracts with AMC and Cinemark, and we believe we also supply IMAX with substantially all of its projection screens globally. There is greater pressure on theaters to differentiate their experience from the at-home experience. We believe the global trend for premium entertainment plays to Strong Global Entertainment's strengths. The table below includes the top cinema companies in North America, all of which are our customers:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Circuits** | **Screens** | **Sites** | **Customer** | **Exclusive** |
| AMC Entertainment Holdings, Inc.<sup>1</sup> | 7850 | 600 | X | X |
| Regal Cinemas (Cineworld Group PLC)<sup>2</sup> | 6851 | 514 | X |  |
| Cinemark Holdings, Inc.<sup>1</sup> | 4426 | 323 | X | X |
| Cinepolis<sup>3</sup> | 4271 | 509 | X |  |
| Cineplex Entertainment LP<sup>4</sup> | 1676 | 164 | X |  |
| Marcus Theaters Corp.<sup>5</sup> | 1064 | 89 | X | X |

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1) Represents the quantity in the United States as of March 2022, for which we are the exclusive supplier of screen products.

2) Represents the quantity in the United States as of March 2022.

3) Represents the quantity in the United States and Mexico as of March 2022.

4) Represents the quantity in Canada as of March 2022.

5) Represents the quantity in the United States as of March 2022, for which we are the exclusive provider of both screen products and technical services.

●  ***Innovator in the Industry*** — We are constantly innovating as exemplified by our new, rapidly growing Eclipse curvilinear screen division which specially designs screens with proprietary coatings for maximum viewer engagement in media-based attractions and immersive projection environments. Recently our screens were used in the much publicized Van Gogh: The Immersive Experience exhibit that wowed audiences with its all-encompassing experience of art, light, sound, movement and imagination. We also recently collaborated with Illuminarium Intermediate (Cayman), LLC in Atlanta, Georgia and plan to assist them in other cities as they expand their sensory cinema business. Eclipse screens are also used in theme parks and military simulation applications.

●  ***Turn-Key, Vertically Integrated Partner —*** We offer a comprehensive turn-key solution for our customers, offering projection and audio equipment, projection screen systems, as well as installation, break/fix on demand and outsourced managed services providing customers with a one-stop shop for their needs.

●  ***World-Class and Scalable Manufacturing and Research & Development ("R&D") —*** We manufacture our screens in an approximately 80,000 square-foot facility in Joliette, Quebec, Canada (the "Joliette Plant") that we plan to lease on a long term basis from Strong/MDI (as defined below). The Joliette Plant is unique with two 90-foot-high screen coating towers which allows us to produce and finish large screens to precise specifications. The Joliette Plant also includes polyvinyl chloride ("PVC") welding operations with programmable automations and areas dedicated to the manufacture of our paints and coatings used on all our screens, as well as dedicated in-house chemists and R&D capabilities. We believe that our quality control procedures, in-house paint and coating capabilities and the quality standards for the products that we manufacture contribute significantly to our reputation for high performance and reliability.

●  ***Strong Studios launches with proven management and a portfolio of content and projects -*** We recently launched Strong Studios with an experienced team and the acquisition of rights to a slate of motion picture and television series from Landmark Studio Group LLC ("Landmark"), a Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CCSE) ("CSSE") company. One new scripted television series, *Safehaven*, commenced production in 2022 and another scripted television series, *Flagrant*, is expected to begin production in 2023. The Company has agreed to sell the distribution rights of *Safehaven* to Screen Media Ventures LLC ("SMV"), a CSSE subsidiary, for a total of $6.5 million and will also participate in a share of the profits of the series.

**Growth Strategy**

●  ***Increase Our Sales Efforts to Grow Our Customer Base and Increase Our Share of Our Customers' Businesses —*** We have expanded our direct sales force to position Strong Global Entertainment to gain market share post-COVID-19. We intend to continue to increase our sales efforts to grow our customer base and increase the share of our existing customer's businesses.

●  ***Geographic expansion*** — Although we believe we are a market leader in North America, we also believe we have a significant opportunity to expand our projection screen business and our services in the European and Asian markets. We recently opened a new outsourced screen finishing facility in China and believe that local presence will allow us to better serve our existing customers in the market and potentially to expand our reach. We are also opening an outsourced finishing facility in Belgium and may pursue similar strategies in other markets to better serve our customers and open additional growth opportunities.

●  ***Strategic Acquisitions and Industry Partnerships*** — We believe the cinema equipment and service markets are highly fragmented and that we can materially increase our revenues and scope through selected acquisitions and/or increased strategic partnerships with other players in the industry. Recently, we announced a preferred commercial relationship with Cinionic, Inc., the world's leading provider of laser cinema solutions, to enhance the services to operators across North America. We believe this relationship enhances our ability to service our valued customers by providing increased access to technology, better training for our technicians and will strengthen our global reach due to closer relationships with their international sales teams.

●  ***Diversify Screen Business into Theme Parks and Other Non-Cinema Applications —*** Non-cinema revenue has grown as a percent of total revenues in our screen manufacturing business, and we expect to continue to expand our Eclipse immersive product line and other products outside the theatrical cinema market. For example, the innovation of immersive art experiences reflects the market opportunity evidenced by the success of the recently launched nationwide tour of Van Gogh; The Immersive Experience, for which Strong Global Entertainment provided the projection screens. We believe Strong Global Entertainment is uniquely positioned to benefit from trends outside the theatrical cinema market. The Company's Eclipse curvilinear screen division, designs screens with proprietary coatings for maximum viewer engagement in media-based attractions and immersive projection environments. The Eclipse product line has experienced year-over-year growth and accounted for approximately 10% of total revenue during 2021 compared to approximately 5% of total revenue during 2020.

●  ***Capitalize on Laser Upgrade Cycle* —** Cinema operators have begun upgrading from Xenon lamp projectors to Laser projectors which we expect will drive additional demand for new screens and managed services. Laser projectors offer better quality than lamp alternatives, require less frequent bulb replacement, and consume up to 80% less energy lowering overall operating costs for the exhibitor.

**Recent Developments**

On March 3, 2022, Strong Studios, a wholly-owned subsidiary of STS, acquired, from Landmark, original feature films and television series, and has been assigned third party rights to content for global multiplatform distribution. The transaction entailed the acquisition of certain projects which are in varying stages of development, none of which have, as yet, produced revenue. In connection with such assignment and purchase, Strong Studios agreed to pay to Landmark approximately $1.7 million in four separate payments, $0.3 million of which was paid upon the closing of the transaction. We also have agreed to issue to Landmark no later than 10 days after the consummation of this offering, a warrant to purchase up to 150,000 of our Common Shares of the Company, exercisable for three years beginning six months after the consummation of this offering, at an exercise price equal to the per-share offering price of our Common Shares in this offering (the "Landmark Warrant"). The Landmark Warrant allows for cashless exercise in certain limited circumstances and provides for certain registration rights for such warrant shares.

The Company reviewed the acquisition of the projects from Landmark from an accounting perspective and concluded substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets. Therefore, the Company determined the transaction was not the acquisition of a business, but instead should be treated as an asset acquisition. Costs of acquiring and producing films and television programs are capitalized when incurred. In connection with the transaction, the Company allocated the $1.7 million acquisition price to the various projects under development based upon the historical costs incurred by Landmark, which the Company believes approximates fair value. The Company also recorded a liability for the $1.4 million of remaining installment payments it will make to Landmark. Finally, the Company also determined the fair value of the Landmark Warrant and allocated an additional $0.4 million to the various projects under development. The Company will recognize the remaining payment obligations due to Landmark when the contingencies are resolved and the amounts become payable.

During the second quarter of 2022, Safehaven 2022, Inc. ("Safehaven 2022") was established to manage the production and financing of the *Safehaven* television series, one of the projects acquired from Landmark. Strong Studios owns 49% of Safehaven 2022 and the remaining 51% is owned by Unbounded Services, LLC ("Unbounded"). Unbounded will serve as a co-producer on the project and will manage the day to day activities of the project.

As part of the Landmark transaction, Strong Studios entered into a distribution agreement with SMV, pursuant to which SMV agreed to purchase the global distribution rights to Safehaven 2022 for $6.5 million upon delivery. This distribution agreement, along with the project's intellectual property, was assigned to Safehaven 2022 and serves as collateral for the production financing at Safehaven 2022.

The Company reviewed its ownership in Safehaven 2022 and concluded that it has significant influence, but not a controlling interest, in Safehaven 2022 based on its ownership being less than 50% along with having one of three representatives on the board. The Company also reviewed whether it otherwise had the power to make decisions that significantly impact the economic performance of Safehaven 2022 and concluded that it did not control the entity and is not the primary beneficiary. Accordingly, the Company will apply the equity method of accounting to its equity holding in Safehaven 2022 and will record its proportionate share of the net income/loss resulting from the equity holding as a new single line item captioned "equity method holding income (loss)" on its statement of operations.

In September 2022, Strong/MDI announced the introduction of its new HGA ReAct 1.4 Screen. The HGA React 1.4 was specifically developed for the new generation of high-resolution laser projectors.

In September 2022, STS introduced its new digital content delivery service. The new service enables STS customers to upload and distribute content from one convenient digital feed rather than downloading content files from multiple file-hosting services.

In December 2022, Strong/MDI announced that it entered into an exclusive three-year cinema screen supply agreement with Marcus Theatres.

In January 2023, Strong Studios amended its agreement with SMV resulting in Strong Studios retaining the worldwide global distribution rights for the *Flagrant* series and releasing SMV from the obligation to purchase the distribution rights for the series.

In January 2023, Strong/MDI entered into a demand credit agreement (the "2023 Credit Agreement") with a bank, which amended and restated the 2021 Credit Agreement (as defined below). The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million.

**Industry Challenges**

Recent challenges and negative trends for the industry and the Company include the continuing impact of COVID-19 on the global economy and on cinema and amusement operators, and as detailed below:

● Our business and the operations of our customers were severely impacted by the pandemic, and may continue to be impacted in future periods as a result of the pandemic. Although, most cinema operators in the United States are now open and studios have started to accelerate the release of new content to exhibitors, the COVID-19 pandemic and the additional variants may increase the possibility of additional closures or other measures in the future that could negatively impact the industry, and the Company's business as a result.

● In addition, COVID-19 accelerated the adoption of streaming and changes to the theatrical window which may negatively impact the cinema exhibition industry in the future.

● We have also seen inflationary pressures and disruptions in our supply chain recently that could impact the availability of certain products we sell to our customers, as well as the cost of materials, labor and freight, which could pose challenges to our ability to maintain or increase margins. For example, certain projector manufacturers are experiencing supply chain constraints, which could impact lead times for delivery of laser projectors to our customers and thereby affect the timing and amount of our revenues.

● Certain of the larger exhibitors in the cinema industry carry high levels of debt on their balance sheets resulting from pre-COVID acquisitions. Cineworld Group Plc, the parent company of Regal Cinemas and one of the largest cinema operators, initiated Chapter 11 bankruptcy proceedings on September 7, 2022 to restructure their balance sheet and alleviate their debt burden. Financial stress at our customers in general, and the Cineworld proceedings specifically, could impact our business by reducing overall exhibitor purchasing and payment on accounts receivable.

**The Separation**

Currently, we are a wholly-owned subsidiary of Strong/MDI Screen Systems, Inc. ("Strong/MDI"), a company incorporated under the laws of Quebec, Canada, which owns all of our outstanding Common Shares and Class B Shares. Strong/MDI owns all of the outstanding Common Shares of Strong/MDI Screen Systems, Inc., a company incorporated under the laws of British Columbia ("Strong Entertainment Subco"). Strong/MDI is wholly-owned by FG Group Holdings. FG Group Holdings also owns all of the outstanding capital stock of STS.

Prior to the completion of this offering, we will enter into various agreements that will govern the Separation of the Entertainment Business from FG Group Holdings and its contribution to us. A summary of these agreements is set forth under the heading "*Certain Relationships and Related Party Transactions*". These agreements will take effect immediately prior to the closing of this offering and provide for, among other things, the contribution: (i) from Strong/MDI to Strong Entertainment Subco of assets comprising Strong/MDI's operating business, except the Joliette Plant and the installment 20-year loan collateralized by the Joliette Plant, pursuant to the Master Asset Purchase Agreement; (ii) from FG Group Holdings to STS of a limited number of contracts and intellectual property used in the Entertainment Business, pursuant to an asset transfer agreement between FG Group Holdings and STS (the "FG Group Holdings Asset Transfer Agreement"); and (iii) of 100% of the outstanding Common Shares of Strong Entertainment Subco and 100% of the outstanding shares of capital stock of STS through certain share transfer agreements between FG Group Holdings and Strong/MDI and Strong/MDI and us (collectively, the "Share Transfer Agreements"). In addition to the above contributions, Strong/MDI has committed under the Master Asset Purchase Agreement (upon closing of this offering), to lease the Joliette Plant to Strong Entertainment Subco under a long term lease agreement (fifteen (15) year lease, with the option of Strong Entertainment Subco to renew for five (5) consecutive periods of five years each, with a right of first refusal to purchase the Joliette Plant in the event that Strong/MDI wishes to sell the property to a third-party in the future) (the "Joliette Plant Lease")." For more information regarding the assets and liabilities to be transferred to us, see our unaudited pro forma condensed combined financial statements and the related notes included elsewhere in this prospectus.

As a result of the transactions noted above, we will lease the Joliette Plant under a long-term lease, and acquire all of the assets and liabilities related to the screen manufacturing business held by Strong/MDI and/or FG Group Holdings and all of the shares of STS. In exchange, we will issue to Strong/MDI additional Common Shares and Class B Shares.

In addition, in connection with the Separation, effective upon the closing of this offering, we and FG Group Holdings intend to enter into a management services agreement (the "Management Services Agreement") that will provide a framework for our ongoing relationship with FG Group Holdings. For a description of this agreement, see "*Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings—Management Services Agreement."* We refer to the separation transactions, as described in the section titled "*The Separation Transaction*" as the "*Separation*."

The diagram below depicts a simplified version of our current organizational structure, together with the governing law of each corporate entity.

![](forms-1a_001.jpg)

The diagram below depicts a simplified version of our organizational structure immediately following the completion of the Separation and the closing of this offering, together with the governing law of each corporate entity, assuming the underwriters do not exercise their over-allotment option.

![](forms-1a_002.jpg)

\* The percentage calculation does not take into account the restricted stock units ("RSUs") to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants").

**Controlled Company**

Immediately following the completion of this offering, we expect that FG Group Holdings will control approximately 75.0% of our outstanding Common Shares (or approximately 72.3% if the representative of the underwriters exercises its over-allotment option in full), which percentage calculation does not take into account the RSUs to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants"), and 100% of our Class B Shares. Accordingly, we will be considered a "controlled company" under the NYSE American rules. Under these rules, a "controlled company" may elect not to comply with certain corporate governance requirements, including the requirement to have a board comprised of a majority of independent directors. We do not intend to take advantage of these exemptions following the completion of this offering, but may do so. See *"Management— Director Independence and Controlled Company Exception."*

**Emerging Growth Company Status**

We are an "emerging growth company" within the meaning of the JOBS Act. For as long as we are an emerging growth company, we will not be required to comply with certain requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these exemptions until we are no longer an emerging growth company. We may remain an emerging growth company for up to five years, although we will lose that status as of the last day of the fiscal year in which we have more than $1.235 billion of revenues, have more than $700 million in market value of our Common Shares held by non-affiliates (assessed as of the most recently completed second quarter), or if we issue more than $1.0 billion of non-convertible debt over a three-year period.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have irrevocably elected not to avail ourselves of this exemption and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

**Implications of Being a Smaller Reporting Company**

Additionally, we are a "smaller reporting company" as defined in Rule 10(f)(1) of Regulation S-K of the Securities Act ("Regulation S-K"). Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our Common Shares held by non-affiliates equals or exceeds $250 million as of the end of that year's second fiscal quarter, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our Common Shares held by non-affiliates equals or exceeds $700 million as of the end of that year's second fiscal quarter.

**Corporate Information**

We were incorporated on November 9, 2021, under the *Business Corporations Act* (British Columbia) (the "BCBCA"). Our principal executive offices are located at 5960 Fairview Road, Suite 275, Charlotte, NC 28210, and our telephone number is (704) 471-6784. The Company's website address is www.strong-entertainment.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our Common Shares.

**Summary Risk Factors**

We face numerous risks that could materially affect our business, financial condition, results of operations, and cash flows. Many of the risks summarized below and described herein historically relate to our operations as part of FG Group Holdings. Following the Separation, these risks will apply to us and our business going forward. Our management believes that the most significant of these risks include the following:

● The COVID-19 pandemic and ensuing governmental responses have negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations and cash flows.

● Our operating results could be materially harmed if we are unable to accurately forecast demand for our products and services and adequately manage our inventory.

● If we are unable to maintain our brand and reputation, our business, results of operations and prospects could be materially harmed.

● The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our financial condition, results of operations and strategic objectives.

● We may fail to achieve the expected benefits of the Separation, including enhancing strategic and management focus, providing a distinct investment identity and allowing us to efficiently allocate resources and capital.

● Any failure to maintain the security of information relating to our customers, employees and suppliers, whether as a result of cybersecurity attacks or otherwise, could expose us to litigation, government enforcement actions and costly response measures, and could disrupt our operations and adversely affect our business and reputation.

● Any potential future acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business.

● Failure to effectively utilize or successfully assert intellectual property rights could negatively impact us.

● Natural disasters and other catastrophic events beyond our control could adversely affect our business operations and financial performance.

● We are a holding company with no operations of our own.

● We have no history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.

● FG Group Holdings may fail to perform under various transaction agreements that will be executed as part of the Separation or it may fail to have necessary systems and services in place when certain of the transaction agreements expire.

● Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Separation.

● If FG Group Holdings sells a controlling interest in our company to a third party in a private transaction, you may not realize any change-of-control premium on our Common Shares and we may become subject to the control of a presently unknown third party.

● Some of our directors and officers may have actual or potential conflicts of interest because of their equity ownership in FG Group Holdings, and some of our officers and directors may have actual or potential conflicts of interest because they also serve as officers and directors of FG Group Holdings.

● We need to make certain capital investments to bring the Joliette Plant into compliance with applicable environmental standards and certain building codes, which if not done properly or quickly enough could result in financial penalties and potential interruptions in production.

● We have agreed to indemnify FG Group Holdings for future losses, if any, related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to us in the Separation, in an aggregate amount not to exceed $250,000 per year, as well as to indemnify FG Group Holdings for all expenses (including legal fees) related to the defense of such claims.

● There may not be an active, liquid trading market for our Common Shares.

● We will be a "controlled company" within the meaning of the rules of the NYSE American and, as a result, will qualify for exemptions from certain corporate governance requirements. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to such requirements.

● Our share price may fluctuate significantly, and you may not be able to resell your Common Shares at or above the initial public offering price.

● Our Board can, without shareholder approval, cause preferred shares to be issued on terms that adversely affect common shareholders or which could be used to resist a potential take-over of us.

● The special rights and restrictions attached to the Class B Shares, including the transfer restrictions and right to nominate or elect fifty percent (50%) or a majority of our board could impede or discourage an acquisition attempt or other transaction that some, or a majority, of shareholders might believe to be in its best interests or in which a shareholder might receive a premium for the Company's Common Shares over the market price of the Common Shares. Such a right will also limit the right of holders of our Common Shares to nominate or elect directors to our board.

● The future sales by FG Group Holdings or others of our Common Shares, or the perception that such sales may occur, could depress the price of our Common Shares.

● We are governed by the corporate laws of British Columbia, Canada, which in some cases have a different effect on the rights of shareholders than the corporate laws of the United States.

● Provisions in our Articles, Canadian law and certain restrictive covenants applicable to us could make an acquisition of us, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current management and/or limit the market price of our Common Shares.

● Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

● We are entering a new line of business with the launch of Strong Studios, which could require additional capital and increase the volatility of our reported revenues and results of operations.

● We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Shares less attractive to investors.

● Canada does not have a system of exchange controls, and control of the Company by "non-Canadians" may be subject to review and further government action.

● We do not know whether an active market for our Common Shares will be sustained or what the market price of our Common Shares will be and as a result it may be difficult for investors to sell their Common Shares.

● The market price of our Common Shares may fluctuate significantly, which could result in substantial losses by our investors.

● Our management will have broad discretion over the use of the net proceeds from this offering and we may use the net proceeds in ways with which you disagree or which do not produce beneficial results.

For further discussion of these and other risks, see "*Risk Factors*" beginning on page 17.

**The Offering**

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| | |
|:---|:---|
| Common Shares offered by us | 2,000,000 Common Shares |
| Common Shares outstanding prior to this offering | 6,000,000 Common Shares |
| Common Shares to be outstanding after this offering | 8,000,000 Common Shares |
| Option to purchase additional Common Shares | We have granted the representative of the underwriters a 45-day option to purchase up to 300,000 additional Common Shares from us at the public offering price, less underwriting discounts and commissions. |
| Use of proceeds | We estimate the net proceeds to us in this offering will be approximately $6.9 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. This assumes an initial public offering price of $5.00 per share; and assumes no exercise of the underwriters' over-allotment option to purchase additional Common Shares. We plan to use the proceeds of the offering for general corporate purposes, which may include (i) working capital, (ii) capital expenditures, including those related to bringing the Joliette Plant (which we expect to be leased to us post-Separation pursuant to the Joliette Plant Lease) into compliance with certain codes and environmental permits, and a potential expansion of the Joliette Plant, (iii) operational purposes, including working capital to accelerate growth in our new content business and expand our cinema screen and services offerings and (iv) potential acquisitions in complementary businesses. While we do not currently have any agreement with respect to an acquisition, we intend to evaluate potential opportunities and could use proceeds of the offering to invest in one or more complementary businesses. The principal reasons for this offering are to increase our working capital, create a public market for our Common Shares, improve our ability to access the capital markets in the future, and to provide capital for general corporate purposes. See "*Use of Proceeds*" for a more complete description of the intended use of proceeds from this offering. |
| Dividend policy | We do not anticipate declaring or paying any cash dividends to holders of our Common Shares in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. See "*Dividend Policy*." |
| Risk factors | Investing in our securities involves a high degree of risk. See "*Risk Factors*" beginning on page 17 and the other information in this prospectus for a discussion of the factors you should consider carefully before you decide to invest in our Common Shares. |
| <br>Proposed NYSE American trading symbol | We have applied to have our Common Shares listed on the NYSE American under the symbol "SGE." No assurance can be given that our application will be approved. |
| Transfer Agent and Registrar | The transfer agent and registrar for our Common Shares is Broadridge Corporate Issuer Solutions, Inc. |
| Lock-up Agreements | We have agreed with the representative that, without the prior written consent of the representative, subject to certain exceptions, our directors and executive officers, for a period of twelve (12) months, and we and any other holder of our outstanding Common Shares, for a period of twelve (12) months, will not in either case, following the date of this prospectus, offer or contract to sell any of our Common Shares. See "*Underwriting.*" |

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Unless otherwise indicated, all information in this prospectus, including information regarding the number of Common Shares outstanding:

● assumes an initial public offering price of $5.00 per share;

● assumes no exercise of the underwriters' over-allotment option to purchase additional Common Shares, if any;

● assumes no exercise of representative's warrants to be issued upon consummation of this offering, which would be for a maximum of 115,000 shares underlying such representative's warrants assuming a total of 2,300,000 shares are issued in this offering with the exercise of the underwriters' over-allotment option, at an exercise price equal to 125% of the initial offering price;

● gives effect to the Separation and related transactions;

● assumes no issuance or exercise of the Landmark Warrant, which is to be issued within 10 days of the closing of this offering, and which exercise would be for a maximum of 150,000 shares underlying such Landmark Warrant at an exercise price equal to the initial offering price;

● excludes an aggregate 2,000,000 Common Shares reserved for issuance under our 2023 Share Compensation Plan that we adopted in connection with this offering, which includes the Common Shares underlying (i) the aggregate of 160,000 RSUs to be issued to our officers upon completion of this offering, with the weighted average grant date fair value of $5.00 per share, the assumed initial public offering price, one-half of which will vest immediately, and one-half of which will vest in one-third annual installments, beginning on the first anniversary of the grant date, subject to continued employment, (ii) the aggregate of 94,000 RSUs to be issued to our non-officer employees with the weighted average grant date fair value of $5.00 per share, the assumed initial public offering price, with the RSUs vesting in three annual installments, beginning on the first anniversary of the grant date, subject to continued employment, (iii) the aggregate of 156,000 stock options to be issued to our non-officer employees with the exercise price of $5.00 per share, the assumed initial public offering price, with the stock options vesting in five annual installments, beginning on the first anniversary of the grant date, subject to continued employment, (iv) the aggregate of 90,000 RSUs to be issued to our directors upon completion of this offering, all of which will vest immediately and (v) the aggregate of 20,000 RSUs with an aggregated value of $100,000 and the weighted average grant date fair value of $5.00 per share, the assumed initial public offering price, to be issued to the four non-employee directors upon completion of this offering, all of which will vest on the anniversary of the grant date, subject to continued service. See "Executive and Director Compensation—Long-Term Incentives—Equity Grants".

**SUMMARY HISTORICAL AND OTHER COMBINED FINANCIAL DATA**

The summary historical condensed combined statements of income of Strong Global Entertainment for the years ended December 31, 2021 and December 31, 2020 have been derived from the audited combined financial statements of Strong Global Entertainment included elsewhere in this prospectus. The selected historical condensed combined statement of income of Strong Global Entertainment for the year ended December 31, 2019 has been derived from the audited combined financial statements of Strong Global Entertainment not included elsewhere in this prospectus. The summary historical condensed combined statements of operations of Strong Global Entertainment for the nine months ended September 30, 2022 and September 30, 2021 and the related summary historical condensed combined balance sheet as of September 30, 2022 have been derived from the unaudited combined financial statements of Strong Global Entertainment included elsewhere in this prospectus. In the opinion of management, the unaudited data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial information in those statements.

Our historical results are not necessarily indicative of our results in any future period. To ensure a full understanding of the summary financial data, the information presented below should be reviewed in combination with the audited combined financial statements and the related notes thereto included elsewhere in this prospectus.

This information is only a summary and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of Strong Global Entertainment" and the financial statements of Strong Global Entertainment and the notes thereto included elsewhere in this prospectus.

Our historical combined financial statements, which are discussed below, are prepared on a stand-alone basis in accordance with U.S. generally accepted accounting principles ("GAAP") and are derived from FG Group Holdings' consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations, and include allocations of expenses from FG Group Holdings. Our combined results are not necessarily indicative of our future performance and do not reflect what our financial performance would have been had we been a stand-alone public company during the periods presented.

FG Group Holdings currently provides certain services to us, and costs associated with these functions have been allocated to us. The allocations include costs related to corporate services, such as information technology, legal, finance and accounting, human resources, tax, treasury, and other services. These costs were allocated on a basis of revenue, headcount or other measures we have determined as reasonable. Stock-based compensation includes expense attributable to our employees are also allocated from FG Group Holdings. These allocations are reflected within operating expenses in our combined statements of income. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the offering or of the costs we will incur in the future.

Following the completion of this offering, we expect FG Group Holdings to continue to provide certain services to us and we expect to provide certain services to FG Group Holdings pursuant to the Management Services Agreement. See the section titled *"Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings – Management Services Agreement".* Pursuant to the Management Services Agreement, we will charge FG Group Holdings a fee based on our actual costs for providing those services to FG Group Holdings (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). In turn, FG Group Holdings will also charge us a fee that is based on its actual costs for providing those services to us in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). In addition, we expect the Joliette Plant will be leased to us post-Separation pursuant to the Joliette Plant Lease to be entered into as part of the Separation between Strong Entertainment Subco and Strong/MDI, which will result in additional expense in the future.

Following the completion of this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including audit, investor relations, stock administration and regulatory compliance costs. These additional costs will differ from the costs that were historically allocated to us from FG Group Holdings.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September 30,** | **Nine** **Months Ended**<br> **September 30,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2022** | **2021** | **2021** | **2020** | **2019** |
| **Statement of Income Data:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net product sales | $22076 | $11811 | $19631 | $15987 | $26448 |
| &nbsp;&nbsp;&nbsp;Net service revenues | 6370 | 4395 | 6341 | 4833 | 10921 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenues | 28446 | 16206 | 25972 | 20820 | 37369 |
| &nbsp;&nbsp;&nbsp;Cost of products sold | 16233 | 7831 | 14078 | 10980 | 16369 |
| &nbsp;&nbsp;&nbsp;Cost of services | 5538 | 2861 | 4526 | 5193 | 8842 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenues | 21771 | 10692 | 18604 | 16173 | 25211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 6675 | 5514 | 7368 | 4647 | 12158 |
| &nbsp;&nbsp;&nbsp;Selling and administrative expenses: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling | 1723 | 1156 | 1781 | 1656 | 2080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative | 4138 | 2960 | 4387 | 4312 | 4700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total selling and administrative expenses | 5861 | 4116 | 6168 | 5968 | 6780 |
| &nbsp;&nbsp;&nbsp;Loss on disposal of assets | - | - | - | (33) | (69) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from operations | 814 | 1398 | 1200 | (1354) | 5309 |
| &nbsp;&nbsp;&nbsp;Other income (expense): |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | 3 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (85) | (84) | (107) | (112) | (139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustment to notes receivable |  |  |  |  | (2857) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign transaction income (loss) | 646 | (56) | (65) | (292) | (288) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 15 | 167 | 153 | 3129 | 1732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | 579 | 27 | (19) | 2725 | (1552) |
| &nbsp;&nbsp;&nbsp;Income before income taxes | 1393 | 1425 | 1181 | 1371 | 3757 |
| &nbsp;&nbsp;&nbsp;Income tax (expense) benefit | (417) | (346) | (360) | 74 | (1864) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | $976 | $1079 | $821 | $1445 | $1893 |

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| | | |
|:---|:---|:---|
|  | **September** **30, 2022** | **September** **30, 2022** |
|  | **Actual** | **Pro Forma As Adjusted<sup>(1)</sup>** |
| **Balance Sheet Data:** |  |  |
| **Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $3189 | $10125 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 4901 | 4901 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 3666 | 3666 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 4652 | 1479 |
| **Liabilities and equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other current liabilities | $10029 | $9665 |
| &nbsp;&nbsp;&nbsp;Short and long-term debt | 2723 | 407 |
| &nbsp;&nbsp;&nbsp;Lease obligations | 313 | 4889 |
| &nbsp;&nbsp;&nbsp;Total equity | 9235 | 15678 |

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(1) The pro forma as adjusted balance sheet data in the table above reflects (i) the Separation and (ii) the sale and issuance by us of our Common Shares in this offering, based upon the receipt of an estimated of $6.9 million of net proceeds therefrom, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. This assumes no exercise of the underwriters' over-allotment option to purchase additional Common Shares.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30,** | **Nine** **Months Ended**<br> **September** **30,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2022** | **2021** | **2021** | **2020** | **2019** |
| **Statement of Cash Flow Data:** |  |  |  |  |  |
| Net cash (used in) provided by operating activities | $(1808) | $3158 | $4831 | $4023 | $4185 |
| Net cash used in investing activities | (604) | (150) | (394) | (467) | (1597) |
| Net cash provided by (used in) financing activities | 1037 | (613) | (3334) | (3353) | (2561) |
| **Other Supplemental Metrics:** |  |  |  |  |  |
| Gross margin | 23.5% | 34.0% | 28.4% | 22.3% | 32.5% |
| EBITDA(1) | $1996 | $2193 | $2194 | $2353 | $4792 |
| Adjusted EBITDA(1) | 1447 | 674 | 725 | (119) | 6984 |

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**(1) Use of Non-GAAP Measures**

We have prepared our combined financial statements in accordance with United States GAAP. In addition to disclosing financial results prepared in accordance with GAAP, we disclose information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes, share-based compensation, fair value adjustments, severance, foreign currency transaction gains (losses), gains on insurance recoveries and other cash and non-cash charges and gains.

EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating our operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of our operations that, when coupled with the GAAP results, provides a more complete understanding of our financial results.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or to net cash from operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are (i) they do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, our working capital needs, (iii) EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, (v) they do not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, and (vii) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

We believe EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present EBITDA and Adjusted EBITDA because (i) we believe these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use EBITDA and Adjusted EBITDA internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.

The following table presents a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:

**EBITDA and Adjusted EBITDA Data (unaudited):**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30,** | **Nine** **Months Ended**<br> **September** **30,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2022** | **2021** | **2021** | **2020** | **2019** |
| Net income | $976 | $1079 | $821 | $1445 | $1893 |
| Interest expense, net | 82 | 84 | 107 | 112 | 139 |
| Income tax expense (benefit) | 417 | 346 | 360 | (74) | 1864 |
| Depreciation and amortization | 521 | 684 | 906 | 870 | 896 |
| &nbsp;&nbsp;&nbsp;EBITDA | 1996 | 2193 | 2194 | 2353 | 4792 |
| Stock-based compensation | 97 | 134 | 175 | 232 | 213 |
| Loss on disposal of assets and impairment charges |  |  |  | 33 | 69 |
| Foreign currency transaction (gain) loss | (646) | 56 | 65 | 292 | 288 |
| Gain on property and casualty and business interruption insurance recoveries |  | (148) | (148) | (3107) | (1235) |
| Employee retention credit |  | (1576) | (1576) |  |  |
| Fair value adjustment to notes receivable |  |  |  |  | 2857 |
| Severance and other | - | 15 | 15 | 78 | - |
| &nbsp;&nbsp;&nbsp;Adjusted EBITDA | $1447 | $674 | $725 | $(119) | $6984 |

---

**RISK FACTORS**

*An investment in our Common Shares involves a high degree of risk. You should consider carefully the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, for information regarding the risks associated with our business and ownership of our Common Shares. If any of the following risks actually occur, our business, financial condition, results of operations, and cash flows could suffer significantly. In any of these cases, the market price of our Common Shares could decline.*

*The risks described below that relate to the prior operations, business activities, and history of the Entertainment Business relate to those operations as part of FG Group Holdings, and not to our operations as an independent business. However, following the Separation, our management believes that the risks described below will continue to apply to us as an independent business.*

**Risks Related to Our Business**

***The COVID-19 pandemic and ensuing governmental responses have negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations and cash flows.***

The COVID-19 pandemic has had, and may continue to have, a widespread and detrimental effect on the global economy particularly in the United States, and actions by public health and governmental authorities, businesses, other organizations and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns. The COVID-19 pandemic and ensuing governmental responses have materially negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations and cash flows. The ultimate impact of the COVID-19 pandemic on our business and results of operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the COVID-19 pandemic, including variants thereof and any repeat or cyclical outbreaks, and any additional preventative and protective actions that governments, or we or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations. For instance, some areas of the United States have experienced surges in COVID-19 cases and new variants of COVID-19, which has, in some cases, led to the closure of recently re-opened businesses and further postponed opening other businesses, including movie theaters. Any resulting financial impact cannot be reasonably estimated at this time, but we expect it will continue to have a material impact on our business, financial condition and results of operations.

The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and advertising industries, and their ability and willingness to purchase our products and services, which continues to negatively impact us. A significant number of our customers temporarily ceased operations during the pandemic, some of which continue to be suspended; as such, we have experienced, and anticipate that we will continue to experience at least until our customers have resumed normal operations, a significant decline in our results of operations. For instance, during this time, many movie theaters and other entertainment centers were forced to close or curtail their hours and, correspondingly, have terminated or deferred their non-essential capital expenditures. While some movie theaters and chains have begun to re-open, or announced plans to re-open in the near future, theater operators may continue to experience reduced revenues for an extended period due to, among other things, consumer concerns over safety and social distancing, depressed consumer sentiment due to adverse economic conditions, including job losses, capacity restrictions, and postponed release dates, shortened "release windows" between the release of motion pictures in theaters and an alternative delivery method, or the release of motion pictures directly to alternative delivery methods, bypassing the theater entirely, for certain movies, and continued COVID-19 outbreaks could cause these theaters to suspend operations again. The COVID-19 pandemic has also adversely affected film production and may adversely affect the pipeline of feature films available in the short- or long-term. In addition to decreased business spending by our customers and prospective customers and reduced demand for our products, lower renewal rates by our customers, increased customer losses/churn, increased challenges in or cost of acquiring new customers and increased risk in collectability of accounts receivable may have a material adverse effect on our business and results of operations. We have also experienced other negative impacts; among other actions, we were required to temporarily close our screen manufacturing facility in Canada due to the governmental response to COVID-19, which we were able to re-open on May 11, 2020, and have experienced lower revenues from field services and a reduction in non-recurring time and materials-based services. The completion of our outsourced screen finishing facility in China by a third party was also delayed by the COVID-19 pandemic. We may also experience one or more of the following conditions that could have a material adverse impact on our business operations and financial condition: adverse effects on our strategic partners' businesses or on the businesses of companies in which we hold investments; impairment charges; extreme currency exchange-rate fluctuations; inability to recover costs from insurance carriers; and business continuity concerns for us, our customers and our third-party vendors.

In response to uncertainties associated with the COVID-19 pandemic, we have taken significant steps to preserve cash and remain in a strong competitive position when the current crisis subsides by eliminating non-essential costs, reducing employee hours and deferring all non-essential capital expenditures to minimum levels. Among other mitigating actions, we implemented targeted furloughs, temporarily curtailed our service and distribution activities in the United States and temporarily reduced compensation of our executive officers and certain other employees, and FG Group Holdings' board of directors waived its cash compensation for 2020. We have also implemented remote work policies for many employees, and the resources available to such employees may not enable them to maintain the same level of productivity and efficiency. In addition, these and other employees may face additional demands on their time, such as increased responsibilities resulting from school and childcare closures or illness of family members. Our increased reliance on remote access to our information systems also increases our exposures to potential cybersecurity breaches. We cannot provide any assurance that these actions, or any other mitigating actions we may take, will help mitigate the impact of the COVID-19 pandemic on us.

We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to the unprecedented nature of the disruption to our operations and the unpredictability of the COVID-19 global pandemic. As a consequence, our estimates of the duration of the pandemic and the severity of the impact on our future earnings and cash flows could change and have a material impact on our financial condition and results of operations. Furthermore, we applied for and received wage subsidies, and are in the process of reviewing tax credits and other financial support under the newly enacted COVID-19 relief legislation in the U.S. and Canada. However, the legislation and guidance from the authorities continues to evolve; as such, the amount and timing of support, if any, that we could receive is not determinable at this time, and there can be no guarantees that we will receive financial support through these programs. In addition, certain government benefits that we seek to access have not previously been administered on the present scale or at all. Government or third-party program administrators may be unable to cope with the volume of applications in the near term, and any benefits we receive may not be as extensive as we currently estimate, may impose additional conditions and restrictions on our operations or may otherwise provide less relief than we contemplate. In the event of a sustained market deterioration, and continued declines in net sales, including the impact of such events on the borrowing base under the Strong/MDI credit facilities, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. We cannot provide any assurance that we will be able to obtain additional sources of financing or liquidity on acceptable terms, or at all.

The ultimate duration and impact of the COVID-19 pandemic on our business, financial condition, results of operations, and cash flows is dependent on future developments, the duration of the pandemic, including repeat or cyclical outbreaks, new and potentially more contagious variants, additional "waves" and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time due to the daily evolution of the COVID-19 pandemic and the global responses to curb its spread. Furthermore, the extent to which our mitigation efforts are successful, if at all, is not presently ascertainable. However, we expect that our results of operations, including revenues, in future periods will continue to be adversely impacted by the COVID-19 pandemic and its negative effects on global economic conditions, which include a global recession, and that, as result of such effects, we may continue to be adversely affected even after the COVID-19 pandemic has subsided.

***We have no assurance of future business from any of our customers.***

We estimate future revenue associated with customers and customer prospects for purposes of financial planning and measurement of our sales pipeline, but we have limited contractual assurance of future business from our customers. While we do have arrangements with some of our customers, customers are not required to purchase any minimum amounts, and could stop doing business with us. Some customers maintain simultaneous relationships with our competitors, and could shift more of their business away from us if they choose to do so in the future.

There is no guarantee that we will be able to service and retain or renew existing agreements, maintain relationships with any of our customers or business partners on acceptable terms or at all, or collect amounts owed to us from insolvent customers or business partners. The loss of any of our large customers could have a material adverse impact on our business.

***Our operating results could be materially harmed if we are unable to accurately forecast demand for our products and services and adequately manage our inventory.***

To ensure adequate inventory supply, we forecast inventory needs, place orders and plan personnel levels based on estimates of future demand. Our ability to accurately forecast demand for our products and services is limited and could be affected by many factors, including an increase or decrease in customer demand for our products and services or for products and services of our competitors, product and service introductions by competitors, unanticipated changes in general market conditions, effects of the COVID-19 pandemic and the weakening of economic conditions or consumer confidence in future economic conditions. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale. Conversely, if we underestimate customer demand for our products and services, we may not be able to deliver products to meet requirements, and this could result in damage to our brand and customer relationships and adversely affect our revenue and operating results.

***Interruptions of, or higher prices of, components from our suppliers may affect our results of operations and financial performance.***

A portion of our revenues are dependent on the distribution of products supplied by various key suppliers. If we fail to maintain satisfactory relationships with our suppliers, or if our suppliers experience significant financial difficulties, we could experience difficulty in obtaining needed goods and services. Some suppliers could also decide to reduce inventories or raise prices to increase cash flow. The loss of any one or more of our suppliers could have an adverse effect on our business, and we may be unable to secure alternative manufacturing arrangements. Even if we are able to obtain alternative manufacturing arrangements, such arrangements may not be on terms similar to our current arrangements or we may be forced to accept less favorable terms in order to secure a supplier as quickly as possible so as to minimize the impact on our business operations. In addition, any required changes in our suppliers could cause delays in our operations and increase our production costs and new suppliers may not be able to meet our production demands as to volume, quality or timeliness.

***The markets for our products and services are highly competitive and if market share is lost, we may be unable to lower our cost structure quickly enough to offset the loss of revenue.***

The domestic and international markets for our product lines are highly competitive, evolving and subject to rapid technological and other changes. We expect the intensity of competition in each of these areas to continue in the future for a number of reasons including:

● Certain of the competitors for our digital equipment have longer operating histories and greater financial, technical, marketing and other resources than we do, which, among other things, may permit them to adopt aggressive pricing policies. As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues and our results of operations. Some of our competitors also have greater name and brand recognition and a larger customer base than us.

● Some of our competitors are manufacturing their own digital equipment while we employ a distribution business model through our distribution agreements with NEC Display Solutions of America, Inc. ("NEC"), Barco, Inc. ("Barco") and certain other suppliers. As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues.

● Suppliers could decide to utilize their current sales force to supply their products directly to customers rather than utilizing channels.

In addition, we face competition for consumer attention from other forms of entertainment, including streaming services and other forms of entertainment that may impact the cinema industry. Other forms of entertainment may be more attractive to consumers than those utilizing our technologies, which could harm our business, prospects and operating results.

For these and other reasons, we must continue to enhance our technologies and our existing products and services and introduce new, high-quality technologies, products and services to meet the wide variety of competitive pressures that we face. If we are unable to compete successfully, our business, prospects and results of operations will be materially adversely impacted.

***We depend in part on distributors, dealers and resellers to sell and market our products and services, and our failure to maintain and further develop our sales channels could harm our business.***

In addition to our in-house sales force, we sell some of our products and services through distributors, dealers and resellers. As we do not have long-term contracts and these agreements may be cancelled at any time, any changes to our current mix of distributors could adversely affect our gross margin and could negatively affect both our brand image and our reputation. If our distributors, dealers and resellers are not successful in selling our products, our revenue would decrease. Specifically, the shutdowns of local and state economies as a result of the COVID-19 pandemic have and may continue in the future to adversely affect the operations of our dealers and resellers. In addition, our success in expanding and entering into new markets internationally will depend on our ability to establish relationships with new distributors. If we do not maintain our relationship with existing distributors or develop relationships with new distributors, dealers and resellers, our ability to grow our business and sell our products and services could be adversely affected and our business may be harmed.

***Certain of our officers and directors are engaged in other activities and may not devote sufficient time to our affairs, which may affect our ability to conduct operations and generate revenues.***

Certain of our officers and directors have existing responsibilities to provide management and services to other entities including FG Group Holdings. For example, Mark D. Roberson, our Chief Executive Officer and director, Todd R. Major, our Chief Financial Officer, Secretary and Treasurer, and D. Kyle Cerminara, our Chairman, also have responsibilities as FG Group Holdings' Chief Executive Officer, Chief Financial Officer and Chairman, respectively. While post-Separation, the majority of FG Group Holdings' operating business will have moved to the Company, Messrs. Roberson and Major will continue to act as officers of FG Group Holdings, with corresponding responsibilities, and will therefore still spend some of their time on the business of FG Group Holdings. However, post-Separation, we expect Messrs. Roberson and Major to each spend a majority, but not all, of their time on the business of our Company. As a result, demands for the time and resources from our Company and other entities, including FG Group Holdings, may conflict from time to time. Because we rely primarily on each of our officers and directors to manage our company, our officers' and directors' limited devotion of time and resources to our business may negatively impact the operation of our business.

***If we are unable to maintain our brand and reputation, our business, results of operations and prospects could be materially harmed.***

Our business, results of operations and prospects depend, in part, on maintaining and strengthening our brand and reputation for providing high quality products and services. Reputational value is based in large part on perceptions. Although reputations may take decades to build, any negative incidents can quickly erode trust and confidence, particularly if they result in adverse publicity, governmental investigations or litigation. If problems with our products cause operational disruption or other difficulties, or there are delays or other issues with the delivery of our products or services, our brand and reputation could be diminished. Damage to our reputation could also arise from actual or perceived legal violations, product safety issues, data security breaches, actual or perceived poor employee relations, actual or perceived poor service, actual or perceived poor privacy practices, operational or sustainability issues, actual or perceived ethical issues or other events within or outside of our control that generate negative publicity with respect to us. Any event that has the potential to negatively impact our reputation could lead to lost sales, loss of new opportunities and retention and recruiting difficulties. Further, we are a newly formed company, and we have no history of operating as an independent company, and our brand and reputation may be aligned with that of FG Group Holdings, which means that any harm to FG Group Holdings' brand may harm our brand, and similarly, it may take time to promote our brand and reputation as a separate independent company. If we fail to promote and maintain our brand and reputation successfully, our business, results of operations and prospects could be materially harmed.

***Our operating margins may decline as a result of increasing product costs.***

Our business is subject to pressure on pricing and costs caused by many factors, including supply chain disruption, intense competition, the cost of components used in our products, labor costs, constrained sourcing capacity, inflationary pressure, pressure from customers to reduce the prices we charge for our products and services, and changes in consumer demand. While inflation has been relatively low in recent years, it began to increase in the second half of 2021. Factors including global supply chain disruptions have resulted in shortages in labor, materials and services. Such shortages have resulted in cost increases, particularly for labor, and could continue to increase. Costs for the raw materials used in the manufacture of our products are affected by, among other things, energy prices, demand, fluctuations in commodity prices and currency, shipping costs and other factors that are generally unpredictable and beyond our control such as the escalating military conflict between Russia and Ukraine. Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows.

***Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results.***

Our operations and performance may depend on global, regional, economic and geopolitical conditions. Russia's invasion and military attacks on Ukraine have triggered significant sanctions from North American and European leaders. These events are currently escalating and creating increasingly volatile global economic conditions. Resulting changes in North American trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a "trade war." A trade war could result in increased costs for raw materials that we use in our manufacturing and could otherwise limit our ability to sell our products abroad. These increased costs would have a negative effect on our financial condition and profitability. Furthermore, the military conflict between Russia and Ukraine may increase the likelihood of supply interruptions and further hinder our ability to find the materials we need to make our products. If the conflict between Russia and Ukraine continues for a long period of time, or if other countries become further involved in the conflict, we could face significant adverse effects to our business and financial condition.

***Our sales cycle can be long and timing of orders and shipments unpredictable, particularly with respect to large enterprises, which could harm our business and operating results.***

The timing of our sales is difficult to predict, and customers typically order screen and other distribution products with limited advance notice which impacts our ability to forecast revenue and manage operations. For our managed service offerings, the sales cycle can be long and involve educating and achieving buy-in from multiple parts of a customer organization. As a result the length and variable nature of customer ordering patterns and timing could materially adversely impact our business and results of operations.

***We are substantially dependent upon significant customers who could cease purchasing our products at any time.***

Our top ten customers accounted for approximately 54% and 48% of combined net revenues during the nine months ended September 30, 2022 and September 30, 2021, respectively, and accounted for 39% of net revenues during 2021. Trade accounts receivable from these customers represented 45% and 29% of net receivables at September 30, 2022 and December 31, 2021, respectively. None of our customers accounted for more than 10% of our combined net revenues during the nine months ended September 30, 2022, and none of our customers accounted for more than 10% of our net combined receivables as of September 30, 2022. One of our customers accounted for more than 10% of our combined net revenues during the nine months ended September 30, 2021. None of our customers accounted for more than 10% of both our combined net revenues during 2021 and our net combined receivables as of December 31, 2021. While we believe our relationships with such customers are stable, most arrangements with these customers are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from our significant customers could have a material adverse effect on our business, financial condition and results of operations. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

Several larger operators in the cinema industry carry high levels of balance sheet leverage arising from pre-COVID acquisitions. Cineworld Group Plc, the parent company of Regal Cinemas and one of the largest cinema operators, filed for Chapter 11 bankruptcy on September 7, 2022 to restructure their balance sheet and alleviate their debt burden. As of September 30, 2022, the Company had $0.3 million in accounts receivable related to products and services sold to Regal Cinemas. The bankruptcy filing is expected to negatively impact the collectability of our accounts receivable and could also negatively impact our revenue in future periods.

Financial instruments that potentially expose us to a concentration of credit risk principally consist of accounts receivable. We sell products to a large number of customers in many different geographic regions. To minimize credit concentration risk, we perform ongoing credit evaluations of our customers' financial condition or use letters of credit.

***Our business is subject to the economic and political risks of selling products in foreign countries.***

Sales outside the United States accounted for 18% of combined sales in the fiscal year ended December 31, 2021. We expect that international sales will continue to be important to our business for the foreseeable future. Foreign sales are subject to general political and economic risks, including the adverse impact of changes to international trade and tariff policies, including in the U.S. and China, which have created uncertainty regarding international trade, unanticipated or unfavorable circumstances arising from host country laws or regulations, unfavorable changes in U.S. policies on international trade and investment, the imposition of governmental economic sanctions on countries in which we do business, quotas, capital controls or other trade barriers, whether adopted by individual governments or addressed by regional trade blocks, threats of war, terrorism or governmental instability, currency controls, fluctuating exchange rates with respect to sales not denominated in U.S. dollars, changes in import/export regulations, tariffs and freight rates, potential negative consequences from changes to taxation policies, restrictions on the transfer of funds into or out of a country and the disruption of operations from labor, political and other disturbances, such as the impact of the coronavirus and other public health epidemics or pandemics. Government policies on international trade and investment can affect the demand for our products, impact the competitive position of our products or prevent us from being able to sell or manufacture products in certain countries. The implementation of more restrictive trade policies, such as higher tariffs or new barriers to entry, in countries in which we sell large quantities of products and services could negatively impact our business, financial condition and results of operations. For example, a government's adoption of "buy national" policies or retaliation by another government against such policies could have a negative impact on our results of operations. If we were unable to navigate the foreign regulatory environment, or if we were unable to enforce our contract rights in foreign countries, our business could be adversely impacted. Any of these events could reduce our sales, limit the prices at which we can sell our products, interrupt our supply chain or otherwise have an adverse effect on our operating performance.

In addition, a portion of our foreign sales are denominated in foreign currencies and amounted to approximately $1.5 million in 2021. To the extent that orders are denominated in foreign currencies, our reported sales and earnings are subject to foreign exchange fluctuations. In addition, there can be no assurance that our remaining international customers will continue to accept orders denominated in U.S. dollars. For those sales which are denominated in U.S. dollars, a weakening in the value of foreign currencies relative to the U.S. dollar could have a material adverse impact on us by increasing the effective price of our products in international markets. Certain areas of the world are also more cost conscious than the U.S. market and there are instances where our products are priced higher than local manufacturers. We are also exposed to foreign currency fluctuations between the Canadian and U.S. dollar due to our screen manufacturing facility in Canada where a majority of its sales are denominated in the U.S. dollar while its expenses are denominated in Canadian currency. We cannot predict the effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates.

Any of these factors could adversely affect our foreign activities and our business, financial condition and results of operations.

***The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our financial condition, results of operations and strategic objectives.***

Our global operations subject us to regulation by U.S. federal and state laws and multiple foreign laws, regulations and policies, which could result in conflicting legal requirements. These laws and regulations are complex, change frequently, have tended to become more stringent over time and increase our cost of doing business. These laws and regulations include import and export control, environmental, health and safety regulations, data privacy requirements, international labor laws and work councils and anti-corruption and bribery laws such as the U.S. Foreign Corrupt Practices Act, the U.N. Convention Against Bribery and local laws prohibiting corrupt payments to government officials. We are subject to the risk that we, our employees, our affiliated entities, contractors, agents or their respective officers, directors, employees and agents may take action determined to be in violation of any of these laws. An actual or alleged violation could result in substantial fines, sanctions, civil or criminal penalties, debarment from government contracts, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our financial condition, results of operations and strategic objectives.

In addition, we are subject to Canadian and foreign anti-corruption laws and regulations such as the Canadian Corruption of Foreign Public Officials Act. In general, these laws prohibit a company and its employees and intermediaries from bribing or making other prohibited payments to foreign officials or other persons to obtain or retain business or gain some other business advantage. We cannot predict the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing laws might be administered or interpreted. Failure by us or our predecessors to comply with the applicable legislation and other similar foreign laws could expose us and our senior management to civil and/or criminal penalties, other sanctions and remedial measures, legal expenses and reputational damage, all of which could materially and adversely affect our business, financial condition and results of operations. Likewise, any investigation of any alleged violations of the applicable anti-corruption legislation by Canadian or foreign authorities could also have an adverse impact on our business, financial condition and results of operations.

***A reversal of the U.S. economic recovery and a return to volatile or recessionary conditions in the United States or abroad could adversely affect our business or our access to capital markets in a material manner.***

Worsening economic and market conditions, downside shocks, or a return to recessionary economic conditions could serve to reduce demand for our products and adversely affect our operating results. These economic conditions may also impact the financial condition of one or more of our key suppliers, which could affect our ability to secure products to meet our customers' demand. In addition, a downturn in the cinema market could impact the valuation and collectability of certain receivables held by us. Our results of operations and the implementation of our business strategy could be adversely affected by general conditions in the global economy, including conditions that are outside of our control, such as the impact of health and safety concerns from the current outbreak of COVID-19 and variants thereof. The most recent global financial crisis caused by the coronavirus resulted in extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business and could have a material adverse effect on us. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

***We rely extensively on our information technology systems and are vulnerable to damage and interruption.***

We rely on our information technology systems and infrastructure to process transactions, summarize results and manage our business, including maintaining client and supplier information. Additionally, we utilize third parties, including cloud providers, to store, transfer and process data. From time to time, we experience cyber-attacks on our information technology systems. Our information technology systems, as well as the systems of our customers, suppliers and other partners, whose systems we do not control, are vulnerable to outages and an increasing risk of continually evolving deliberate intrusions to gain access to company sensitive information. Likewise, data security incidents and breaches by employees and others with or without permitted access to our systems pose a risk that sensitive data may be exposed to unauthorized persons or to the public. A cyber-attack or other significant disruption involving our information technology systems, or those of our customers, suppliers and other partners, could also result in disruptions in critical systems, corruption or loss of data and theft of data, funds or intellectual property. We may be unable to prevent outages or security breaches in our systems. We remain potentially vulnerable to additional known or yet unknown threats as, in some instances, we, our suppliers and our other partners may be unaware of an incident or its magnitude and effects. We also face the risk that we expose our customers or partners to cybersecurity attacks. Any or all of the foregoing could adversely affect our results of operations and cash flows, as well as our business reputation.

***Any failure to maintain the security of information relating to our customers, employees and suppliers, whether as a result of cybersecurity attacks or otherwise, could expose us to litigation, government enforcement actions and costly response measures, and could disrupt our operations and adversely affect our business and reputation.***

In connection with the sales and marketing of our products and services, we may from time to time transmit confidential information. We also have access to, collect or maintain private or confidential information regarding our customers, employees, and suppliers, as well as our business. We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology networks and related systems. These risks include operational interruption, private data exposure and damage to our relationship with our customers, among others. Cyber-attacks are rapidly evolving and becoming increasingly sophisticated. It is possible that computer hackers and others might compromise our security measures, or the security measures of those parties that we do business with now or in the future, and obtain the personal information of our customers, employees and suppliers or our business information. A security breach of any kind, including physical or electronic break-ins, computer viruses and attacks by hackers, employees or others, could expose us to risks of data loss, litigation, government enforcement actions, regulatory penalties and costly response measures, and could seriously disrupt our operations. Any resulting negative publicity could significantly harm our reputation, which could cause us to lose market share and have an adverse effect on our results of operations.

***If we fail to retain key members of management, or successfully integrate new executives, our business may be materially harmed.***

Our future success depends, in substantial part, on the efforts and abilities of our current management team. If certain of these individuals were to leave unexpectedly, we could experience substantial loss of institutional knowledge, face difficulty in hiring qualified successors and could experience a loss in productivity while any successor obtains the necessary training and experience. Our loss of services of any of our senior executives, or any failure to effectively integrate new management into our business processes, controls, systems and culture, could have a material adverse effect on us.

***Any potential future acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business.***

Our long-term strategy may include identifying and acquiring, investing in or merging with suitable candidates on acceptable terms, entry into new lines of business and markets or divesting of certain business lines or activities. In particular, over time, we may acquire, make investments in or merge with providers of product offerings that complement our business or may terminate such activities. Mergers, acquisitions, divestitures and entries into new lines of business include a number of risks and present financial, managerial and operational challenges, including but not limited to:

● diversion of management attention from running our existing business;

● possible material weaknesses in internal control over financial reporting;

● increased expenses including legal, administrative and compensation expenses related to newly hired or terminated employees;

● increased costs to integrate, develop or, in the case of a divestiture, separate the technology, personnel, customer base and business practices of the acquired, new or divested business or assets;

● potential exposure to material liabilities not discovered in the due diligence process;

● potential adverse effects on reported results of operations due to possible write-down of goodwill and other intangible assets associated with acquisitions;

● potential damage to customer relationships or loss of synergies in the case of divestitures; and

● unavailability of acquisition financing or inability to obtain such financing on reasonable terms.

Any acquired business, technology, service or product or entry into a new line of business could significantly under-perform relative to our expectations, and may not achieve the benefits we expect. For all these reasons, our pursuit of an acquisition, investment, new line of business, divestiture, merger or joint venture could cause our actual results to differ materially from those anticipated.

***Failure to effectively utilize or successfully assert intellectual property rights could negatively impact us.***

We own or otherwise have rights to various trademarks and trade names used in conjunction with the sale of our products, the most significant of which is Strong®. We rely on trademark laws to protect these intellectual property rights. We cannot assure that these intellectual property rights will be effectively utilized or, if necessary, successfully asserted. There is a risk that we will not be able to obtain and perfect our own intellectual property rights, or, where appropriate, license from others, intellectual property rights necessary to support new product introductions. Our intellectual property rights, and any additional rights we may obtain in the future, may be invalidated, circumvented or challenged in the future. Our failure to perfect or successfully assert intellectual property rights could harm our competitive position and could negatively impact us.

***Natural disasters and other catastrophic events beyond our control could adversely affect our business operations and financial performance.***

The occurrence of one or more natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes; geo-political events, such as civil unrest in a country in which our suppliers are located or terrorist or military activities disrupting transportation, communication or utility systems; or other highly disruptive events, such as nuclear accidents, public health epidemics or pandemics, such as the ongoing COVID-19 pandemic, the impact of which is uncertain and which, if it persists for an extended period of time, could disrupt our global supply chain and result in significant expenses or delays outside of our control, unusual weather conditions or cyber-attacks, could adversely affect our operations and financial performance. For example, the COVID-19 pandemic has impacted and could further impact our operations, customers and suppliers as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak. In addition, temporary cinema closures in domestic and foreign markets and delays to movie release schedules may potentially negatively impact our customers' operations and timing of orders. Further, adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business. In the event of a major disruption caused by the outbreak of epidemics or pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Such events could result, among other things, in operational disruptions, physical damage to or destruction or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions. We cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy. Such occurrences could have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.

***The insurance that we maintain may not fully cover all potential exposures.***

We maintain property, business interruption and casualty insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We are potentially at risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain.

***We are a holding company with no operations of our own.***

We are a holding company, and our ability to operate is dependent upon the earnings from the business conducted by our subsidiaries that operate the centers. The effect of this structure is that we depend on the earnings of our subsidiaries, and the distribution or payment to us of a portion of these earnings to meet our obligations, including those under any of our debt obligations. The distributions of those earnings or advances or other distributions of funds by these entities to us, all of which are contingent upon our subsidiaries' earnings, are subject to various business considerations. In addition, distributions by our subsidiaries could be subject to statutory restrictions, including state laws requiring that such subsidiaries be solvent, or contractual restrictions. Some of our subsidiaries may become subject to agreements that restrict the sale of assets and significantly restrict or prohibit the payment of dividends or the making of distributions, loans or other payments to shareholders, partners or members.

***We are entering a new line of business which could require additional capital.***

The production, acquisition and distribution of feature films and series content requires substantial capital. We intend to mitigate risks by pre-selling rights to content and utilizing tax credit incentives in most cases to offset production costs. However, a significant amount of time may elapse between our expenditure of funds and the receipt of revenues after release or distribution of such content. Although we intend to reduce the risks of production exposure through pre-sale of rights, tax credit programs, government and industry programs, co-financiers and other sources, we cannot assure you that we will successfully implement these arrangements or that we will not be subject to substantial financial risks relating to the production, acquisition and distribution of content. Additionally, the production, completion and distribution of motion picture and television content can be subject to a number of uncertainties, including delays and increased expenditures due to disruptions or events beyond our control. As a result, if production incurs substantial budget overruns, we may have to seek additional financing or fund the overrun ourselves. We cannot make assurances regarding the availability of such additional financing on terms acceptable to us, or that we will recoup these costs. For instance, increased costs or budget overruns incurred with respect to a particular film may prevent a picture from being completed or released or may result in a delayed release and the postponement to a potentially less favorable date, all of which could cause a decline in performance, and, thus, the overall financial success of such film. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

***We may incur significant write-offs if our projects do not perform well enough to recoup costs.***

We will be required to amortize content capitalized production costs over the expected revenue streams as we recognize revenue from films or other projects. The amount of production costs that will be amortized each quarter depends on, among other things, how much future revenue we expect to receive from each project. Unamortized production costs will be 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, including because of delayed theatrical distribution of films as a result of the COVID-19 global pandemic and its effects, those costs would be written down to fair value. In any given quarter, if we lower our previous forecast with respect to total anticipated revenue from any film or other project, we may be required to accelerate amortization or record impairment charges with respect to the unamortized costs, even if we previously recorded impairment charges for such film or other project. Such impairment charges could adversely impact our business, operating results and financial condition.

***Our revenues and results of operations may fluctuate significantly from period to period.***

Our revenues and results of operations can vary based on the timing of shipments of our cinema products particularly with regard to the timing of cinema screen shipments and timing of customer orders and shipments of projection equipment. With the launch of Strong Studios, those fluctuations could increase on a quarter-to-quarter basis as timing of revenue and amortization of production costs will depend on timing delivery of content, among other factors. The degree of commercial success of content that we sell, license or distribute, which cannot be predicted with certainty may cause our revenue and earnings results to fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future periods.

**Risks Related to the Separation**

***We may not realize the anticipated benefits from the Separation, and the Separation could harm our business.***

We have historically operated as a business segment of FG Group Holdings. We may not be able to achieve the full strategic and financial benefits expected to result from the Separation, or such benefits may be delayed or not occur at all. The Separation is expected to enhance strategic and management focus, provide a distinct investment identity and allow us to efficiently allocate resources and deploy capital. We may not achieve these and other anticipated benefits for a variety of reasons, including, among others:

● the Separation will require significant amounts of management's time and effort, which may divert management's attention from operating and growing our business;

● following the Separation, we may be more susceptible to economic downturns and other adverse events than if we were still a part of FG Group Holdings;

● following the Separation, our business will be less diversified than FG Group Holdings' business prior to the Separation; and

● the other actions required to separate the respective businesses could disrupt our operations.

If we fail to achieve some or all of the benefits expected to result from the Separation, or if such benefits are delayed, our business could be harmed.

***The services that FG Group Holdings will provide to us post-Separation, pursuant to the Management Services Agreement, may not be sufficient to meet our needs, which may result in increased costs and otherwise adversely affect our business.***

Pursuant to the Management Services Agreement, we and FG Group Holdings expect to continue to provide certain services to each other, which could include information technology, legal, finance and accounting, human resources, tax, treasury, and other services in exchange for the fees specified in the Management Services Agreement between us and FG Group Holdings (calculated on the basis of cost and expenses, with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). FG Group Holdings is not obligated to provide these services in a manner that differs from the nature of the services provided to the Strong Entertainment operating segment during the period prior to the Separation, and thus we may not be able to modify these services in a manner desirable to us as a stand-alone public company. Further, if we no longer receive these services from FG Group Holdings due to the termination of the Management Services Agreement or otherwise, we may not be able to perform these services ourselves and/or find appropriate third party arrangements at a reasonable cost (and any such costs may be higher than those charged by FG Group Holdings). See the section titled "*Certain Relationships and Related Party Transactions-Relationship with FG Group Holdings*."

***We have no history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.***

Our historical and unaudited pro forma financial information included in this prospectus is not necessarily indicative of our future financial condition, results of operations or cash flows, nor does it reflect what our financial condition, results of operations or cash flows would have been as an independent public company during the periods presented. In particular, the historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows primarily because of the following factors:

● Prior to the Separation, our business has been operated by FG Group Holdings as part of its broader corporate organization, rather than as an independent company; FG Group Holdings or one of its affiliates provide support for various corporate functions for us, such as information technology, compensation and benefits, human resources, engineering, finance and internal audit.

● Our historical financial results reflect the direct, indirect and allocated costs for such services historically provided by FG Group Holdings. Our historical financial information does not reflect our obligations under the Management Services Agreement we will enter into with FG Group Holdings in connection with the Separation. At the termination of the Management Services Agreement, we will need to perform these functions ourselves or hire third parties to perform these functions on our behalf, and these costs may differ significantly from the comparable expenses we have incurred in the past.

● Our working capital requirements and capital expenditures historically have been satisfied as part of FG Group Holdings' corporate-wide cash management and centralized funding programs, and our cost of debt and other capital may significantly differ from the historical amounts reflected in our historical financial statements.

● Currently, our business is integrated with that of FG Group Holdings and we benefit from FG Group Holdings' size and scale in costs, employees and vendor and customer relationships. Thus, costs we will incur as an independent company may significantly exceed comparable costs we would have incurred as part of FG Group Holdings.

We based the pro forma adjustments included in this prospectus on available information and assumptions that we believe are reasonable; actual results, however, may vary. In addition, our unaudited pro forma financial information included in this prospectus may not give effect to various ongoing additional costs we may incur in connection with being an independent public company. Accordingly, our unaudited pro forma financial statements do not reflect what business, financial condition, results of operations, and cash flows would have been as an independent public company and are not necessarily indicative of our future financial condition or future results of operations.

Please refer to "Unaudited Pro Forma Condensed Combined Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited historical financial statements and the notes to those statements included elsewhere in this prospectus.

***FG Group Holdings***  ***may fail to perform under various transaction agreements that will be executed as part of the Separation or it may fail to have necessary systems and services in place when certain of the transaction agreements expire.***

In connection with the Separation, we, through Strong Entertainment Subco or STS, will enter into a Master Asset Purchase Agreement, Confirmatory of Ownership Assignment of Intellectual Property between Strong/MDI Screen Systems, Inc., a company existing under the laws of Quebec and Strong/MDI Screen Systems Inc., a company incorporated under the laws of British Columbia (the "IP Assignment Agreement"), the FG Group Holdings Asset Transfer Agreement, Patent Assignment between FG Group Holdings, and Strong Technical Services, Inc. (the "FG Group Holdings IP Assignment Agreement"), the Joliette Plant Lease and the Share Transfer Agreements with FG Group Holdings and/or Strong/MDI. The Master Asset Purchase Agreement, the FG Group Holdings Asset Transfer Agreement and the Joliette Plant Lease will determine the allocation of assets and liabilities (including by means of licensing) between the companies following the Separation and will include any necessary indemnifications related to liabilities and obligations. If Strong/MDI and/or FG Group Holdings are unable to satisfy their respective obligations under these agreements, we could incur operational difficulties or losses, which may not be adequately indemnified under those agreements. If we do not have in place our own systems and services, or if we do not have agreements with other providers of these services once these transaction agreements expire or terminate, we may not be able to operate our business effectively and our profitability may decline.

***Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Separation.***

Our financial results previously were included within the consolidated results of FG Group Holdings, and its reporting and control systems were appropriate for subsidiaries of a public company. We may need to upgrade our systems, including duplicating computer hardware infrastructure, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, finance and information technology staff. If we are unable to do this in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired and our business could be harmed.

***Until completion of the Separation, FG Group Holdings will control the direction of our business, and post-Separation, FG Group Holdings will continue to indirectly control the direction of our business, as their concentrated ownership of our Common Shares and Class B Shares will prevent you and other shareholders from influencing significant decisions.***

Immediately following the completion of this offering, FG Group Holdings will control 75.0% of our outstanding Common Shares (or 72.3% if the underwriters exercise their option to purchase additional Common Shares in full) and 100% of the outstanding Class B Shares, which will entitle FG Group Holdings, or an entity controlled by FG Group Holdings, to nominate and elect at least 50% of our board, until such Class B Shares are redeemed. As long as FG Group Holdings beneficially controls a majority of the voting power of our outstanding Common Shares with respect to a particular matter, or FG Group Holdings directly or indirectly holds any number of Class B Shares, it will generally be able to determine the outcome of all corporate actions requiring shareholder approval, including by the election and removal of at least 50% of our directors. Even if FG Group Holdings were to control less than a majority of the voting power of our outstanding Common Shares and ceased to hold any Class B Shares, it may be able to influence the outcome of such corporate actions so long as it owns a significant portion of our Common Shares. If FG Group Holdings does not complete the Separation or otherwise dispose of its Common Shares, it could remain our controlling shareholder for an extended period of time or indefinitely.

FG Group Holdings' interests may not be the same as, or may conflict with, the interests of our other shareholders. Investors in this offering will not be able to affect the outcome of any shareholder vote while FG Group Holdings controls the majority of the voting power of our outstanding Common Shares. As a result, FG Group Holdings may be able to control, directly or indirectly and subject to applicable law, all matters affecting us, including:

● any determination with respect to our business direction and policies, including the appointment and removal of directors;

● any determinations with respect to mergers, business combinations or dispositions of assets;

● our financing and dividend policy, and the payment of dividends on our Common Shares, if any;

● compensation and benefit programs and other human resources policy decisions;

● changes to any other agreements that may adversely affect us; and

● determinations with respect to our tax returns.

Because FG Group Holdings' interests may differ from ours or from those of our other shareholders, actions that FG Group Holdings takes with respect to us, as our controlling shareholder, may not be favorable to us or our other shareholders.

***If FG Group Holdings sells a controlling interest in our company to a third party in a private transaction, you may not realize any change-of-control premium on our Common Shares and we may become subject to the control of a presently unknown third party.***

Following the completion of this offering, FG Group Holdings will continue to control a significant equity interest in our company. FG Group Holdings will have the ability, should it choose to do so, to sell some or all of our Common Shares it owns in a privately-negotiated transaction, which, if sufficient in size, could result in a change of control of our company.

The ability of FG Group Holdings to privately sell the Common Shares it owns, with no requirement for a concurrent offer to be made to acquire all of the Common Shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your Common Shares that may otherwise accrue to FG Group Holdings on its private sale of our Common Shares. Additionally, if FG Group Holdings privately sells its significant equity interests in our company, we may become subject to the control of a presently unknown third party. Such third party may have interests that conflict with those of other shareholders.

***Some of our directors and officers may have actual or potential conflicts of interest because of their equity ownership in FG Group Holdings, and some of our directors may have actual or potential conflicts of interest because they also serve as officers of FG Group Holdings.***

Because of their current or former positions with FG Group Holdings, some of our executive officers and directors may own FG Group Holdings Common Shares or have options to acquire FG Group Holdings Common Shares, and the individual holdings may be significant for some of these individuals compared to their total assets. In addition, following the Separation, certain of officers and directors will also continue to serve as officers and directors of FG Group Holdings. Although all transactions with related parties after this offering will be approved by a committee of non-FG Group Holdings-affiliated directors, this ownership or service may create the appearance of conflicts of interest when the FG Group Holdings-affiliated officers and/or directors are faced with decisions that could have different implications for FG Group Holdings or us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between FG Group Holdings and us regarding the terms of the agreements governing the Separation and the relationship thereafter between the companies, including the Management Services Agreement.

***The IRS may not agree with the position that we should be treated as a foreign corporation for U.S. federal income tax as a result of the Separation*.**

Although we are incorporated under the laws of Canada, the IRS may assert that we should be treated as a U.S. corporation (and, therefore, a U.S. tax resident) for U.S. federal income tax purposes pursuant to section 7874 of the Code. For U.S. federal income tax purposes, a corporation is generally considered a tax resident in the jurisdiction of its organization or incorporation. Because we are incorporated under the laws of Canada, we would generally be classified as a foreign corporation (and, therefore, a non-U.S. tax resident) for U.S. federal income tax purposes. Section 7874 provides an exception pursuant to which a foreign incorporated entity may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes. These rules are complex and require analysis of all relevant facts and circumstances, and there is limited guidance and significant uncertainties as to their application. If it were determined that we should be taxed as a U.S. corporation for U.S. federal income tax purposes under section 7874, we would be liable for U.S. federal income tax on our income like any other U.S. corporation and certain distributions made by us to non-U.S. holders of our Common Shares would be subject to U.S. withholding tax. Taxation as a U.S. corporation could have a material adverse effect on our financial position and results from operations.

Section 7874 is currently expected to apply to the Separation in a manner such that we should not be treated as a U.S. corporation for U.S. federal income tax purposes. However, holders are cautioned that the application of section 7874 to us is extremely complex and the applicable Treasury Regulations are subject to significant uncertainty and there is limited guidance regarding their application. Moreover, the application of section 7874 to the facts and circumstances of the Separation are uncertain. In addition, there could be a future change in law under section 7874 of the Code, the Treasury Regulations promulgated thereunder or otherwise that could have an effect on the application of section 7874 to us. No IRS ruling has been requested or will be obtained regarding the U.S. federal income tax consequences of the Separation or any other matter described in this prospectus/proxy statement. There can be no assurance that the IRS will not challenge the U.S. federal income tax treatment described above or that, if challenged, such treatment will be sustained by a court.

***We potentially could have received better terms from unaffiliated third parties than the terms we received in our agreements with FG Group Holdings.***

The agreements we entered into with FG Group Holdings in connection with the Separation were negotiated while we were still part of FG Group Holdings' business. See "*Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings.*" Accordingly, during the period in which the terms of those agreements will have been negotiated, we did not have an independent board of directors (the "Board of Directors") or a management team independent of FG Group Holdings. The terms of the agreements negotiated in the context of the Separation relate to, among other things, the allocation of assets, intellectual property, liabilities, rights and other obligations between FG Group Holdings and us, and arm's-length negotiations between FG Group Holdings and an unaffiliated third party in another form of transaction, such as a buyer in a sale of a business, may have resulted in more favorable terms to the unaffiliated third party.

***Because we will lease, instead of own, the Joliette Plant where we manufacture all of our screens, it is possible that Strong/MDI as landlord may terminate the lease which would negatively impact our production.***

We manufacture our screens in the Joliette Plant, an approximately 80,000 square-foot facility near Montreal, Quebec, Canada. Strong/MDI, our major shareholder after this offering, will continue to own this facility. We plan to lease it through Strong Entertainment Subco, our subsidiary post-Separation. While we plan to enter into the Joliette Plant Lease, which will be a fifteen (15) year lease for the Joliette Plant (with the option of Strong Entertainment Subco to renew for five (5) consecutive periods of five years each, and a right of first refusal to purchase the Joliette Plant in the event that Strong/MDI wishes to sell the property to a third-party in the future) with Strong/MDI, it is possible that Strong/MDI may terminate the lease under certain limited circumstances, and therefore interrupt our screen production. In addition, we plan to use part of the proceeds from this offering to improve and expand the Joliette Plant, because it is our only manufacturing facility in North America. Compared to the ownership, the rental relationship may not provide us enough protection on our interests and investments in this facility.

***Government agencies in Canada have notified Strong/MDI that certain modifications are required to be made to the Joliette Plant in order to meet safety and emissions standards.***

Strong/MDI has been informed by certain government agencies in Canada, including but not limited to, the Joliette Fire Department and the Quebec Ministry of the Environment, that certain aspects of the Joliette Plant must be modified to fully comply with safety and emissions standards. Strong/MDI has implemented changes to address some, but not all, of the identified requirements.

The required modifications include installing new air evaluator and exhaust chimneys as well as modifying the walls and doors in the paint and coatings area to achieve a 2-hour fire resistance standard. In addition, it was required that we modify certain mezzanine areas to reduce their size and upgrade construction to non-combustible materials, add an additional exterior access, and purchase spill resistant pallets. We estimate that if we were to proceed with implementing the remaining identified requirements, the cost would be approximately CAD$0.3 million to CAD$0.5 million (approximately US$0.2 million to US$0.4 million) if undertaken on their own and not as part of a broader plant improvement initiative. Our intention is to address the remaining requirements as one component of an expansion and reorganization of certain areas of the Joliette Plant. We believe the project would improve production flow in the plant, accommodate growth of the Eclipse product line in addition to addressing the requirements. We estimate that the cost of an expansion and reorganization of the Joliette Plant, which includes the estimated costs to remedy the remaining required modifications, would be approximately CAD$1.0 million to CAD$1.5 million (approximately US$0.8 million to US$1.2 million), depending on the final scope of the expansion as well as fluctuations in construction materials and other costs. If we fail to address the requirements, it could be possible that we could incur penalties or production could be interrupted. The expansion could cost more or take longer than our expectations and could result in production disruptions in the facility during the construction process.

***We have agreed to indemnify FG Group Holdings for future losses, if any, related to current litigation related to the operation businesses being transferred to us in the Separation.***

Pursuant to the terms of the FG Group Holdings Asset Purchase Agreement, we have agreed to indemnify FG Group Holdings for future losses, if any, related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to us in the Separation, in an aggregate amount not to exceed $250,000 per year, as well as to indemnify FG Group Holdings for all expenses (including legal fees) related to the defense of such claims. There can be no assurance that we will have sufficient capital to pay the full amount of such aggregate liabilities or losses.

**Risks Related to this Offering and Ownership of Our Common Shares**

***There may not be an active, liquid trading market for our Common Shares.***

Prior to this offering, there has been no public market for our Common Shares. We cannot predict the extent to which investor interest in our company will lead to the development of a trading market on the NYSE American or how liquid that market may become. If an active trading market does not develop, you may have difficulty selling any of our Common Shares that you purchase. The initial public offering price of our Common Shares is, or will be, determined by negotiation between us and the underwriters and may not be indicative of prices that will prevail following the completion of this offering. The market price of Common Shares may decline below the initial public offering price, and you may not be able to resell your Common Shares at or above the initial public offering price.

***Our share price may fluctuate significantly, and you may not be able to resell your Common Shares at or above the initial public offering price.***

The trading price of our Common Shares is likely to be volatile and subject to wide price fluctuations in response to various factors, including:

● market conditions in the broader stock market in general, or in our industry in particular;

● actual or anticipated fluctuations in our quarterly financial and results of operations;

● introduction of new products and services by us or our competitors;

● issuance of new or changed securities analysts' reports or recommendations;

● sales of large blocks of our Common Shares;

● additions or departures of key personnel;

● regulatory developments;

● litigation and governmental investigations;

● economic and political conditions or events; and

● changes in investor perception of our market positions based on third-party information.

These and other factors may cause the market price and demand for our Common Shares to fluctuate substantially, which may limit or prevent investors from readily selling their Common Shares and may otherwise negatively affect the liquidity of our Common Shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the shares. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business.

The trading market for our Common Shares will also be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our share price could decline.

***We will be a "controlled company" within the meaning of the rules of the NYSE American and, as a result, will qualify for exemptions from certain corporate governance requirements. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to such requirements.***

Upon completion of this offering, FG Group Holdings will continue to control indirectly a majority of the voting power of our outstanding Common Shares and all of our Class B Shares, which will indirectly entitle FG Group Holdings to elect fifty percent (50%) of our board (or a majority, where our board is set at an odd number), until such Class B Shares are redeemed. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE American. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

● the requirement that a majority of the Board of Directors consist of independent directors;

● the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

● the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.

While FG Group Holdings indirectly controls a majority of the voting power of our outstanding Common Shares and all of our Class B Shares, we may not have a majority of independent directors or our nominating and corporate governance and compensation committees may not consist entirely of independent directors. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE American.

***Future sales by FG Group Holdings or others of our Common Shares, or the perception that the Separation or such sales may occur, could depress the price of our Common Shares.***

Immediately following the completion of this offering, FG Group Holdings will own indirectly 75.0% of our outstanding Common Shares (or 72.3% if the underwriters exercise their option to purchase additional Common Shares in full), which percentage calculation does not take into account the RSUs to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants"). Subject to the restrictions described in the paragraph below, future sales of these Common Shares in the public market will be subject to the volume and other restrictions of Rule 144 under the Securities Act, for so long as FG Group Holdings is deemed to be our affiliate, unless the Common Shares to be sold are registered with the Securities and Exchange Commission (the "SEC"). We are unable to predict with certainty whether or when FG Group Holdings will sell a substantial number of Common Shares to the extent it retains Common Shares following the Separation. The sale by FG Group Holdings of a substantial number of Common Shares after this offering, or a perception that such sales could occur, could significantly reduce the market price of our Common Shares.

Pursuant to lock-up agreements, our directors and officers have agreed, for a period of twelve (12) months from the date of this offering, and any other holder of our outstanding Common Shares has agreed, for a period of twelve (12) months from the date of this offering, subject to limited exceptions, without the prior written consent of the representative of the underwriters, that they will not offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities. In addition, pursuant to the Underwriting Agreement (as defined below), we and any of our successors have agreed, for a period of twelve (12) months from the date of the Underwriting Agreement, that each will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise. The representative of the underwriters may, in its sole discretion and at any time without notice, release all or any portion of the Common Shares subject to the lock-up. See "*Underwriting*."

Immediately upon this offering, we intend to file a registration statement registering under the Securities Act the Common Shares reserved for issuance under our Plan. If equity securities granted under our Plan are sold or it is perceived that they will be sold in the public market, the trading price of our Common Shares could decline substantially. These sales also could impede our ability to raise future capital.

***We are governed by the corporate laws of British Columbia, Canada, which in some cases have a different effect on the rights of shareholders than the corporate laws of the United States.***

We are governed by the BCBCA, which may affect the rights of shareholders differently than those of a company governed by the laws of a U.S. jurisdiction, and may, together with our Articles, as amended, have the effect of delaying, deferring or discouraging another party from acquiring control of our company by means of a tender offer, a proxy contest or otherwise, or may affect the price an acquiring party would be willing to pay for our Common Shares. The material differences between the BCBCA and Delaware General Corporation Law that may have the greatest such effect include, but are not limited to, the following: (i) for certain corporate transactions (such as amalgamations, arrangements or amendments to our Articles) the BCBCA generally requires the voting threshold to be a special resolution approved by 66 2/3% of shareholders, or as set out in the Articles, as amended, as applicable, whereas Delaware General Corporation Law generally only requires a majority vote; and (ii) under the BCBCA holders of an aggregate of 5% or more of our Common Shares can requisition a special meeting of shareholders, whereas such right does not exist under the Delaware General Corporation Law. We cannot predict whether investors will find our company and our Common Shares less attractive because of these material differences or because we are governed by the BCBCA. If some investors find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our share price may be more volatile.

***Provisions in our Articles, as amended, Canadian law and certain restrictive covenants applicable to us could make an acquisition of us, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current management and/or limit the market price of our Common Shares.***

Provisions in our Articles, as amended, currently in effect, as well as certain provisions under the BCBCA and applicable Canadian laws may discourage, delay or prevent a merger, acquisition or other change in control of us that shareholders may consider favorable, including transactions in which they might otherwise receive a premium for their Common Shares. For instance, our Articles, as amended, contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders' meetings.

***Because we are a corporation incorporated under the laws of British Columbia, it may be difficult for investors in the United States to enforce civil liabilities against us based solely upon the federal securities laws of the United States. Similarly, it may be difficult for Canadian Investors to enforce civil liabilities against our directors and officers residing outside Canada.***

We are a corporation incorporated under the laws of British Columbia that maintains a principal executive office in the United States, and a substantial portion of our assets are located outside the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon us, or to realize in the United States upon judgements of courts of the United States predicated upon civil liabilities under the Securities Act. Investors should not assume that Canadian courts: (i) would enforce judgements of U.S. courts obtained in actions against us predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or blue sky laws of any state within the United States or (ii) would enforce, in original actions, liabilities against us predicated upon the U.S. federal securities laws or any such state securities or blue sky laws.

***Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.***

Prior to the Separation, we were a business segment of FG Group Holdings, and FG Group Holdings is subject to Section 404 of the Sarbanes-Oxley Act. However, upon completion of this offering, we will not be required to comply with all SEC rules that implement Section 404 of the Sarbanes-Oxley Act and therefore will not be required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. Section 404(a) of the Sarbanes-Oxley Act, or Section 404(a), requires that beginning with our second annual report following our initial public offering, management assess and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses in our internal control over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act, or Section 404(b), requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with SEC rules that implement Section 404(b) until such time as we are no longer an "emerging growth company." We expect our first Section 404(a) assessment will take place for our annual report for the fiscal year ending December 31, 2023, and we will not be required to comply with Section 404(b) rules until we cease to be an "emerging growth company" as defined in the JOBS Act. We will remain an "emerging growth company" until December 31, 2027, although if our total annual gross revenues are $1.235 billion or more, we would cease to be an "emerging growth company" as of December 31st of that year.

In order to comply with these rules, we expect to incur additional expenses and devote increased management effort toward ensuring compliance. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

In the future, if we fail to complete the annual Section 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. When evaluating our internal controls over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting, and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. Our remediation efforts may not enable us to avoid a material weakness in our internal control over financial reporting in the future. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows. Any of the foregoing occurrences, should they come to pass, could negatively impact the public perception of our company, which could have a negative impact on our share price.

***The obligations associated with being a public company will require significant resources and management attention.***

Currently, we are not directly subject to the reporting and other requirements of the Exchange Act. Following the closing of this offering of which this prospectus forms a part, we will be directly subject to such reporting and other obligations under the Exchange Act and the rules of the NYSE American. As an independent public company, we are required to, among other things:

● prepare and distribute periodic reports, proxy statements and other shareholder communications in compliance with the federal securities laws and NYSE American rules;

● have our own Board of Directors and committees thereof, which comply with federal securities laws and NYSE American rules;

● maintain an internal audit function;

● institute our own financial reporting and disclosure compliance functions;

● establish an investor relations function;

● establish internal policies, including those relating to trading in our securities and disclosure controls and procedures; and

● comply with the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Public Company Accounting Oversight Board and the NYSE American.

These reporting and other obligations will place significant demands on our management and our administrative and operational resources, including accounting resources, and we expect to face increased legal, accounting, administrative and other costs and expenses relating to these demands that we had not incurred as a segment of FG Group Holdings. Certain of these functions will be provided by FG Group Holdings pursuant to the Management Services Agreement. See "*Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings—Management Services Agreement*." Our investment in compliance with existing and evolving regulatory requirements will result in increased administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities, which could have an adverse effect on our business, financial condition, results of operations and cash flows.

***We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Shares less attractive to investors.***

We are an "emerging growth company," as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our Common Shares less attractive if we rely on these exemptions. If some investors find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our share price may be more volatile.

**Risks Related to the Offering**

***New investors in our Common Shares will experience immediate and substantial book value dilution after this offering.***

The initial public offering price of our Common Shares will be substantially higher than the pro forma net tangible book value per share of the outstanding Common Shares immediately after the offering. Based on an assumed initial public offering price of $5.00 per share and our net tangible book value as of, September 30, 2022, if you purchase our Common Shares in this offering you will pay more for your Common Shares than the amounts paid by our existing shareholders for their Common Shares and you will suffer immediate dilution of $3.33 per share in pro forma net tangible book value.

As a result of this dilution, investors purchasing Common Shares in this offering may receive significantly less than the full purchase price that they paid for the Common Shares purchased in this offering in the event of a liquidation. See "*Dilution."*

***Canada does not have a system of exchange controls, and control of the Company by "non-Canadians" may be subject to review and further government action.***

Canada has no system of exchange controls. There are no Canadian governmental laws, decrees, or regulations relating to restrictions on the repatriation of capital or earnings of the Company to non-resident investors. There are no laws in Canada or exchange control restrictions affecting the remittance of dividends, profits, interest, royalties and other payments by the Company to non-resident holders of the Common Shares, except as discussed below under "*Certain Canadian Federal Income Tax Consequences to Holders of our Common Shares that are Non-Resident in Canada*".

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the *Investment Canada Act* may require that a "non-Canadian" not acquire "control" of the Company without prior review and approval by the Minister of Innovation, Science and Economic Development. The acquisition of one-third or more of the voting shares of the Company would give rise a rebuttable presumption of the acquisition of control, and the acquisition of more than fifty percent of the voting shares of the Company would be deemed to be an acquisition of control. In addition, the *Investment Canada Act* provides the Canadian government with broad discretionary powers in relation to national security to review and potentially prohibit, condition or require the divestiture of, any investment in the Company by a non-Canadian, including non-control level investments. "Non-Canadian" generally means an individual who is neither a Canadian citizen nor a permanent resident of Canada within the meaning of the *Immigration and Refugee Protection Act* (Canada) who has been ordinarily resident in Canada for not more than one year after the time at which he or she first became eligible to apply for Canadian citizenship, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

***We do not know whether an active market for our Common Shares will be sustained or what the market price of our Common Shares will be and as a result it may be difficult for investors to sell their Common Shares.***

Prior to our listing on the NYSE American, there was no trading market for our Common Shares. Additionally, an active trading market for our Common Shares may not emerge and may not be sustainable. It may be difficult for investors to sell their Common Shares without depressing the market price for the Common Shares or at all. As a result of these and other factors, investors may not be able to sell their Common Shares at or above the offering price or at all. Further, an inactive market may also impair our ability to raise capital by selling Common Shares and may impair our ability to enter into strategic partnerships or acquire companies or products by using our Common Shares as consideration. If an active market for our Common Shares does not develop or is not sustained, it may be difficult to sell your Common Shares.

***We do not intend to pay cash dividends.***

We do not intend to declare or pay any cash dividends in the near term and plan to retain all available funds to finance the growth of our business. Any future determination to pay dividends will be at the discretion of our Board of Directors in accordance with applicable law and will be dependent upon then-existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors considers relevant.

***We are applying for listing of our Common Shares on NYSE American. We can provide no assurance that our Common Shares will qualify to be listed, and if listed, that our Common Shares will continue to meet NYSE American listing requirements. If we fail to comply with the continuing listing standards of NYSE American, our securities could be delisted.***

We anticipate that our Common Shares will be eligible to be listed on NYSE American following this offering. However, we can provide no assurance that our application will be approved, and that an active trading market for our Common Shares will develop and continue. If, after listing, we fail to satisfy the continued listing requirements of NYSE American, such as the corporate governance requirements or the minimum closing bid price requirement, NYSE American may take steps to delist our Common Shares. Such a delisting would likely have a negative effect on the price of our Common Shares and would impair your ability to sell or purchase our Common Shares when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our Common Shares to become listed again, stabilize the market price or improve the liquidity of our Common Shares, prevent our Common Shares from dropping below the NYSE American minimum bid price requirement or prevent future noncompliance with NYSE American's listing requirements.

***Our Board can, without shareholder approval, cause preferred shares to be issued on terms that adversely affect common shareholders or which could be used to resist a potential take-over of us.***

Under our Notice of Articles, as amended, our Board is authorized to issue up to 150,000,000 preferred shares in one or more series, none of which were issued and outstanding as of the date of this prospectus. Also, our Board, without shareholder approval, will have the authority to determine the rights, preferences, privileges and restrictions, including voting rights, of those shares. If the Board causes preferred shares to be issued, the rights of the holders of our Common Shares could be adversely affected. The Board's ability to determine the terms of preferred shares and to cause its issuance, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting shares. Preferred shares issued by the Board could include voting rights which could shift the ability to control us to the holders of the preferred shares. Preferred shares could also have conversion rights into Common Shares at a discount to the market price of the Common Shares which could negatively affect the market for our Common Shares. In addition, preferred shares would have preference in the event of liquidation of us, the payment of dividends and other rights superior to the Common Shares. We have no current plans to issue any preferred shares.

***The Class B Shares contain terms that could adversely affect common shareholders or which could be used to resist a potential take-over of us.***

Under our Notice of Articles, as amended, our Board is authorized to issue up to 100 Class B Shares, 100 of which will be issued and outstanding as of the date of the Separation. The Class B Shares could have the effect of making it more difficult for a third party to acquire a majority of our outstanding Common Shares. The Class B Shares include voting rights to elect fifty percent (50%) of our board (or a majority, where our board is set at an odd number) which has the effect of limiting the common share voting rights with respect to election of the Board.

***The market price of our Common Shares may fluctuate significantly, which could result in substantial losses by our investors.***

The market price of our Common Shares may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

● Announcements of technological innovations, new products or product enhancements by us or others;

● Announcements by us of significant strategic partnerships, out-licensing, in-licensing, joint ventures, acquisitions or capital commitments;

● Success of research and development projects;

● Developments concerning intellectual property rights or regulatory approvals;

● Variations in our and our competitors' results of operations;

● Changes in earnings estimates or recommendations by securities analysts, if our Common Shares are covered by analysts;

● Changes in government regulations or patent decisions;

● Future issuances of Common Shares or other securities;

● The addition or departure of key personnel;

● Announcements by us or our competitors of acquisitions, investments or strategic alliances;

● General market conditions, including the volatility of market prices for shares of technology companies generally, and other factors, including factors unrelated to our operating performance; and

● The other factors described in this "Risk Factors" section.

These factors and any corresponding price fluctuations may materially and adversely affect the market price of our Common Shares and result in substantial losses by our investors.

Further, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations in the past. Continued market fluctuations could result in extreme volatility in the price of our Common Shares, which could cause a decline in the value of our Common Shares. Price volatility of our Common Shares might be worse if the trading volume of our Common Shares is low. In the past, following periods of market volatility, shareholders have often instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and attention of management from our business, even if we are successful. Future sales of our Common Shares could also reduce the market price of such shares.

Moreover, the liquidity of our Common Shares is limited, not only in terms of the number of shares that can be bought and sold at a given price, but by delays in the timing of transactions and reduction in security analysts' and the media's coverage of us, if any. These factors may result in lower prices for our Common Shares than might otherwise be obtained and could also result in a larger spread between the bid and ask prices for our Common Shares. In addition, without a large float, our Common Shares are less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our Common Shares may be more volatile. In the absence of an active public trading market, an investor may be unable to liquidate its investment in our Common Shares. Trading of a relatively small volume of our Common Shares may have a greater impact on the trading price of our Common Shares than would be the case if our public float were larger. We cannot predict the prices at which our Common Shares will trade in the future.

***Raising additional capital by issuing securities may cause dilution to existing shareholders and/or have other adverse effects on our operations.***

We may need to raise future capital to implement our business strategies. We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity, convertible debt securities or other equity-based derivative securities, your ownership interest will be diluted and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Any additional indebtedness we incur would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Furthermore, the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our Common Shares to decline and existing shareholders may not agree with our financing plans or the terms of such financings. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, or our products, or grant licenses on terms unfavorable to us. Adequate additional financing may not be available to us on acceptable terms, or at all.

***Our management will have broad discretion over the use of the net proceeds from this offering and we may use the net proceeds in ways with which you disagree or which do not produce beneficial results.***

We plan to use the proceeds of the offering for general corporate purposes, which may include working capital, capital expenditures, including improvements to the Joliette Plant (which we expect to be leased to us post-Separation pursuant to the Joliette Plant Lease to be entered into as part of the Separation between Strong Entertainment Subco and Strong/MDI), operational purposes and potential acquisitions in complementary businesses. While we do not currently have any agreement with respect to an acquisition, we intend to evaluate potential opportunities and could use proceeds of the offering to invest in one or more complementary businesses. The principal reasons for this offering are to increase our working capital, create a public market for our Common Shares, improve our ability to access the capital markets in the future, and to provide capital for general corporate purposes. The principal reasons for this offering are to increase our working capital, create a public market for our Common Shares, improve our ability to access the capital markets in the future, and to provide capital for general corporate purposes. (See *Use of Proceeds*). We have not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us or our shareholders. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, and results of operation.

***We could be negatively affected by actions of activist shareholders.***

Campaigns by shareholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term shareholder value through actions such as financial restructuring, increased debt, special dividends, share repurchases or sales of assets or the entire company. If we are targeted by an activist shareholder in the future, the process could be costly and time-consuming, disrupt our operations and divert the attention of management and our employees from executing our strategic plan. Additionally, perceived uncertainties as to our future direction as a result of shareholder activism or changes to the composition of our Board may lead to the perception of a change in the direction of our business, instability or lack of continuity, which may be exploited by our competitors, cause concern to current or potential customers, who may choose to transact with our competitors instead of us, and make it more difficult to attract and retain qualified personnel.

***If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our Common Shares, or if our results of operations do not meet their expectations, our share price and trading volume could decline.***

The trading market for our Common Shares will be influenced by the research and reports that industry or securities analysts publish about us and our business. We do not have any control over these analysts. If any of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, any of the analysts who cover us downgrades our stock, or if our results of operations do not meet their expectations, our share price could decline.

***We may be a passive foreign investment company, or "PFIC," which could result in adverse U.S. federal income tax consequences to U.S. Holders.***

In general, we will be treated as a PFIC for any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or more-owned subsidiaries) is passive income or (2) at least 50% of the average value of our assets (looking through certain 25% or more-owned subsidiaries) is attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the Section of this prospectus captioned "Material U.S. Federal Income Tax Consequences") of our Common Shares, the U.S. Holder may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies that in some circumstances are unclear and subject to varying interpretation. Our actual PFIC status for any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules.

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus, including the sections entitled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. We may, in some cases, use words such as "project," "believe," "anticipate," "plan," "expect," "estimate," "intend," "should," "would," "could," "potentially," "will" or "may," or other words that convey uncertainty of future events or outcomes, to identify these forward-looking statements. Forward-looking statements in this prospectus may include, but are not limited to, statements about:

● expectations of future results of operations or financial performance;

● introduction of new products or compensation strategies;

● successful implementation of the Separation and our operations of the Entertainment Business following the Separation;

● plans for growth, future operations, and potential acquisitions;

● the size and growth potential of possible markets for our product candidates and our ability to serve those markets;

● the rate and degree of market acceptance of our business model;

● the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing and our ability to obtain additional financing;

● our ability to attract strategic partners with development, regulatory and commercialization expertise; and

● the development of our marketing capabilities.

There are numerous important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss in this prospectus under the caption "Risk Factors." Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. You should read these factors and the other cautionary statements made in this prospectus as being applicable to all related forward-looking statements wherever they appear in this prospectus. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We expressly disclaim any obligation or intention to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

**USE OF PROCEEDS**

We estimate the net proceeds to us in this offering will be approximately $6.9 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. This assumes an initial public offering price of $5.00 per share; and assumes no exercise of the underwriters' over-allotment option to purchase additional Common Shares.

We plan to use the proceeds of the offering for general corporate purposes, which may include (i) working capital, (ii) capital expenditures, including those related to a potential expansion of the Joliette Plant, which is estimated at approximately CAD$1.0 million to CAD$1.5 million (approximately US$0.8 million to US$1.2 million) and includes the estimated costs of CAD$0.3 million to CAD$0.5 million (approximately US$0.2 million to US$0.4 million) related to bringing the Joliette Plant (which we expect to be leased to us post-Separation pursuant to the Joliette Plant Lease) into compliance with certain codes and environmental permits, (iii) operational purposes, including working capital to accelerate growth in our new content business and expand our cinema screen and services offerings and (iv) potential acquisitions in complementary businesses. While we do not currently have any agreement with respect to an acquisition, we intend to evaluate potential opportunities and could use proceeds of the offering to invest in one or more complementary businesses. The principal reasons for this offering are to increase our working capital, create a public market for our Common Shares, improve our ability to access the capital markets in the future, and to provide capital for general corporate purposes.

Due to the uncertainties inherent in our business, we cannot estimate with certainty the exact amounts of the net proceeds from this offering that may be used for any purpose. As a result, our management will have broad discretion in applying the net proceeds from this offering.

**DIVIDEND POLICY**

As of the date of this prospectus, we have never declared or paid any cash dividends on our Common Shares or other securities and do not anticipate declaring or paying any cash dividends in the foreseeable future. We currently intend to retain all available funds to finance the growth of our business. Any future determination to pay dividends will be at the discretion of our Board of Directors in accordance with applicable law and will be dependent upon then-existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors considers relevant.

**CAPITALIZATION**

The table below describes our cash, cash equivalents and investments and capitalization as of September 30, 2022.

● on an actual basis;

● on a pro forma basis to give effect to the Separation and related transactions, as if such transactions had occurred on September 30, 2022; and

● on a pro forma, as-adjusted, basis to reflect the issuance and sale by us of Common Shares in this offering and the receipt of an estimated of $6.9 million of net proceeds, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us and the receipt by us of the proceeds of such sale, assuming no exercise of the underwriters' over-allotment option to purchase additional Common Shares and giving effect to the Landmark Warrant and the grant of RSUs to our directors and officers upon the completion of this offering.

You should read this table in conjunction with the information under the captions "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes included elsewhere in this prospectus.

---

| | | | |
|:---|:---|:---|:---|
|  | **As of September 30, 2022**<br> **(unaudited)** | **As of September 30, 2022**<br> **(unaudited)** | **As of September 30, 2022**<br> **(unaudited)** |
|  | **Actual** | **Pro Forma** | **Pro Forma As Adjusted** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Cash and cash equivalents** | $**3189** | $**3189** | $**10125** |
| **Debt:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revolving credit facility | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;20-year installment loan | 2316 |  |  |
| &nbsp;&nbsp;&nbsp;5-year equipment loan | 237 | 237 | 237 |
| &nbsp;&nbsp;&nbsp;Tenant improvement loan | 170 | 170 | 170 |
| &nbsp;&nbsp;&nbsp;Operating lease obligations | 313 | 4889 | 4889 |
| **Total debt** | $**3036** | $**5296** | $**5296** |
| **Equity:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Preferred shares | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;Class A Common shares |  |  |  |
| &nbsp;&nbsp;&nbsp;Class B Common shares |  |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid in capital |  |  | 21239 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (5561) | (5561) | (5561) |
| &nbsp;&nbsp;&nbsp;Net parent investment | 14796 | 13939 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total equity** | $**9235** | $**8378** | $**15678** |
| **Total capitalization** | $**12271** | $**13674** | $**20974** |

---

**DILUTION**

If you invest in our Common Shares in this offering, you will experience dilution to the extent of the difference between the public offering price per share and the net tangible book value per share of our Common Shares immediately after this offering. If you purchase our Common Shares in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price in this offering per share of our Common Shares and the pro forma as adjusted net tangible book value per share of our Common Shares upon closing of this offering. Net tangible book value represents the book value of our total tangible assets less the book value of our total liabilities. Pro forma net tangible book value per share represents our net tangible book value divided by the number of Common Shares issued and outstanding. Pro forma as adjusted net tangible book value per share represents our net tangible book value divided by the number of Common Shares issued and outstanding after giving effect to the pro forma adjustment described above, and the payment of estimated offering expenses by us in connection with the sale of Common Shares in this offering.

We calculate net tangible book value per common share by dividing our net tangible assets by the number Common Shares issued and outstanding as of September 30, 2022. Our net tangible book value as of September 30, 2022, was approximately $6.9 million. Our pro forma net tangible book value as of September 30, 2022, was $6.0 million, or $1.01 per common share. After giving effect to the pro forma adjustments described above, our pro forma as adjusted net tangible book value as of September 30, 2022, would have been $13.4 million, or $1.67 per share. This represents an immediate and substantial dilution of $3.33 per share to new investors purchasing Common Shares in this offering. The following table illustrates this dilution per share:

---

| | | |
|:---|:---|:---|
| Assumed public offering price per common share |  | $5.00 |
| Net tangible book value per common share as of September 30, 2022 | $1.15 |  |
| Increase in net tangible book value per common share attributable to new investors | $0.52 |  |
| As adjusted net tangible book value per common share as of September 30, 2022 after giving effect to this offering |  | $1.67 |
| Dilution per common share to new investors participating in this offering |  | $3.33 |

---

A $1.00 increase (or decrease) in the assumed initial offering price of $5.00 per share would increase (or decrease) the as adjusted net tangible book value per common share after giving effect to this offering by approximately $0.22, and dilution per common share to new investors by approximately $0.78, assuming that the number of Common Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

In addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital by issuing equity securities or convertible debt, your ownership will be further diluted.

**THE SEPARATION TRANSACTION**

Strong Global Entertainment was incorporated as a company under the BCBCA on November 9, 2021. All of the outstanding Common Shares of Strong Global Entertainment are currently held by Strong/MDI, a wholly-owned subsidiary of FG Group Holdings. Prior to completion of this offering, FG Group Holdings will also own all of the outstanding capital stock of STS, who in turn owns all of the outstanding capital stock of Strong Studios. On November 9, 2021, Strong Entertainment Subco was incorporated as a company under the BCBCA. All of the outstanding Common Shares of Strong Entertainment Subco are currently held by Strong/MDI.

Prior to the completion of this offering, we, Strong Entertainment Subco and/or STS, will enter into the Master Asset Purchase Agreement, the IP Assignment Agreement (as defined below), the FG Group Holdings Asset Transfer Agreement, the FG Group Holdings IP Assignment Agreement, the Joliette Plant Lease, the Share Transfer Agreements and a number of other agreements with FG Group Holdings and or Strong/MDI for the purpose of accomplishing the Separation and setting forth various matters governing our relationship with FG Group Holdings after the completion of this offering. Pursuant to the Management Services Agreement, we and FG Group Holdings will provide certain services to each other, which could include information technology, legal, finance and accounting, human resources, tax, treasury, and other services, and will charge us a fee that is based on its actual costs and expenses for those services in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). These agreements will take effect upon the closing of this offering. We will enter into these agreements with FG Group Holdings and/or Strong/MDI while we are still an indirect wholly-owned subsidiary of FG Group Holdings and certain terms of these agreements are not necessarily the same as could have been obtained from a third party.

The following are the principal steps of the Separation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Pursuant
 to the terms of the Master Asset Purchase Agreement and an assignment agreement between Strong/MDI and Strong Entertainment Subco
 (the "IP Assignment Agreement"), Strong/MDI will transfer to Strong Entertainment Subco the assets comprising Strong/MDI's
 operating business, except for the Joliette Plant, and Strong Entertainment Subco will assume the liabilities relating thereto, except
 for the 20-year installment loan collateralized by the Joliette Plant, all in consideration for Common Shares of Strong Entertainment
 Subco;

2. Pursuant
 to the terms of the Joliette Plant Lease, Strong/MDI will lease the Joliette Plant to Strong Entertainment Subco for a fifteen (15)
 year lease, with the option of Strong Entertainment Subco to renew for five (5) consecutive periods of five years each, and a right
 of first refusal to purchase the Joliette Plant in the event that Strong/MDI wishes to sell the property to a third-party in the
 future;

3. Pursuant
 to the terms of the FG Group Holdings Asset Transfer Agreement and the FG Group Holdings IP Assignment Agreement, (i)
 FG Group Holdings will transfer to STS a limited number of contracts and intellectual property used in the Entertainment Business
 and (ii) STS will indemnify and hold harmless FG Group Holdings in an aggregate amount not to exceed $250,000 per year, against
 the currently outstanding product liability or personal injury claims (such maximum amount excluding legal fees) arising out of products
 sold or distributed in the U.S. by the operations of the businesses being transferred to us in the Separation, all in a tax-free
 transfer under Section 351 of the U.S. Internal Revenue Code as well as to indemnify FG Group Holdings for all expenses (including
 legal fees) related to the defense of such claims;

4. Pursuant
 to a Share Transfer Agreement between Strong/MDI and Strong Global Entertainment, Strong/MDI will transfer 100% of the Common Shares
 of Strong Entertainment Subco to Strong Global Entertainment in exchange for additional Common Shares and 100 new Class B Shares
 of Strong Global Entertainment;

5. Pursuant
 to a Share Transfer Agreement between FG Group Holdings and Strong/MDI, FG Group Holdings will transfer all of the
 shares of capital stock of STS to Strong/MDI in consideration for Common Shares of Strong/MDI;

6. Pursuant
 to a Share Transfer Agreement between Strong/MDI and Strong Global Entertainment, Strong/MDI will transfer all of the shares of capital
 stock of STS received in step 5 to Strong Global Entertainment in consideration for additional Common Shares of Strong Global Entertainment;
 and

7. Strong/MDI
 will change its name.

As a consequence of the transactions noted above, we will lease the Joliette Plant under the Joliette Plant Lease, and will indirectly acquire all of the assets and liabilities related to the screen manufacturing business held by Strong/MDI and/or FG Group Holdings prior to the offering and all of the shares of STS.

Pursuant to the Master Asset Purchase Agreement, to the extent that permits or consents are not obtained to transfer any particular assets or operations to us prior to the closing of this offering, Strong/MDI will continue to own such assets or operations but will operate them for our benefit and we will be entitled to the economic benefits thereof. See "*Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings—Master Asset Purchase Agreement and Share Transfer Agreements*."

The diagram below depicts a simplified version of our current organizational structure, together with the governing law of each corporate entity.

![](forms-1a_001.jpg)

The diagram below depicts a simplified version of our organizational structure immediately following the completion of the Separation and the closing of this offering, together with the governing law of each corporate entity, assuming the underwriters do not exercise their over-allotment option.

![](forms-1a_002.jpg)

\* The percentage calculation does not take into account the RSUs to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants").

**UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS**

The unaudited pro forma condensed combined financial statements consist of the unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2022 and the year ended December 31, 2021, and the unaudited pro forma condensed combined balance sheet as of September 30, 2022. The unaudited pro forma condensed combined financial statements have been derived by application of pro forma adjustments to our historical combined financial statements included elsewhere in this prospectus.

The unaudited pro forma condensed combined balance sheet reflects the Separation, this offering and other transactions, as described below, as if they occurred on September 30, 2022, while the unaudited pro forma condensed combined statements of operations give effect to the Separation and this offering as if they occurred on January 1, 2021. The pro forma adjustments, described in the related notes, are based on currently available information and certain estimates and assumptions that management believes are reasonable. These estimates and assumptions are preliminary and have been made solely for purposes of developing these unaudited pro forma condensed combined financial statements. Actual results could differ, perhaps materially, from these estimates and assumptions. Included in the pro forma adjustments are items that are directly related to the Separation and this offering, factually supportable and, for purposes of the unaudited pro forma condensed combined statements of operations, have a continuing impact.

The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the Separation or this offering been completed on September 30, 2022 for the unaudited pro forma condensed combined balance sheet or on January 1, 2021 for the unaudited pro forma condensed combined statements of operations. The unaudited pro forma condensed combined financial statements should not be relied on as indicative of the historical operating results that we would have achieved or any future operating results or financial position that we will achieve after the completion of this offering.

The unaudited pro forma condensed combined financial statements reflect the impact of certain transactions, which primarily comprise the following:

● the Separation, which outlines the assets and liabilities to be contributed by FG Group Holdings to Strong Global Entertainment at Separation date, including the Joliette Plant Lease between Strong/MDI and Strong Entertainment Subco, as described in the section titled "The Separation Transaction";

● the receipt of approximately $6.9 million in net proceeds from the sale of Common Shares in this offering at an assumed initial offering price of $5.00 per share, assuming no exercise of the underwriters' over-allotment option to purchase additional Common Shares, after deducting the underwriting discount and commissions and estimated offering expenses payable by us; and

● the effect of the Landmark Warrant and the grant of RSUs to our directors and officers upon the completion of this offering.

We have historically operated as an operating segment of FG Group Holdings. FG Group Holdings currently provides certain services to us, and costs associated with these functions have been allocated to us. The allocations include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, and other services. These costs were allocated on a basis of revenue, headcount or other measures we have determined as reasonable. Stock-based compensation includes expense attributable to our employees allocated from FG Group Holdings. These allocations are primarily reflected within operating expenses in our combined statements of operations. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the offering or of the additional costs we will incur in the future as we operate as a stand-alone company.

Following the completion of this offering, we expect FG Group Holdings to continue to provide certain services to us and we expect to provide certain services to FG Group Holdings pursuant to the Management Services Agreement. See the section titled "*Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings – Management Services Agreement*". Pursuant to the Management Services Agreement, we will charge FG Group Holdings a fee based on our actual costs for providing those services to FG Group Holdings (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). In turn, FG Group Holdings will also charge us a fee that is based on its actual costs for providing those services to us in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). The unaudited pro forma condensed combined financial statements have not been adjusted for as estimate of these management services to the extent that future costs are expected to be different from historical allocations Actual results may differ from historical allocations or pro forma estimated management services costs.

Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including audit, investor relations, stock administration and regulatory compliance costs. These additional costs will differ from the costs that were historically allocated to us from FG Group Holdings.

The following unaudited pro forma condensed combined financial statements and the related notes should be read in conjunction with the sections titled "*Use of Proceeds*," "*Capitalization*" and "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and the annual audited combined financial statements, the unaudited interim combined financial statements and the related notes included elsewhere in this prospectus.

---

| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **September 30, 2022 (unaudited)** | **September 30, 2022 (unaudited)** | **September 30, 2022 (unaudited)** |
|  | **Actual** | **Adjustments** | **Pro Forma** |
| **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Current assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $3189 | $6936 (a) | $10125 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 4901 |  | 4901 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 3666 |  | 3666 |
| &nbsp;&nbsp;&nbsp;Other current assets | 4333 | - | 4333 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 16089 | 6936 | 23025 |
| Property, plant and equipment, net | 4652 | (3173)(b) | 1479 |
| Operating lease right-of-use assets | 250 | 4576 (c) | 4826 |
| Film and television programming rights, net | 1449 |  | 1449 |
| Intangible assets, net | 8 |  | 8 |
| Goodwill | 871 |  | 871 |
| Other assets | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $23319 | $8339 | $31658 |
| **Liabilities and Equity** |  |  |  |
| Current liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $4008 | $- | $4008 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 3924 | (364)(e) | 3560 |
| &nbsp;&nbsp;&nbsp;Short-term debt | 2553 | (2316)(d) | 237 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 35 |  | 35 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease obligations | 63 | 191 (c) | 254 |
| &nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | 2097 | - | 2097 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 12680 | (2489) | 10191 |
| Long-term debt, net of current portion | 135 |  | 135 |
| Operating lease obligations, net of current portion | 250 | 4385 (c) | 4635 |
| Deferred income taxes | 490 |  | 490 |
| Other long-term liabilities | 529 | - | 529 |
| &nbsp;&nbsp;&nbsp;Total liabilities | 14084 | 1896 | 15980 |
| Commitments, contingencies and concentrations |  |  |  |
| Equity: |  |  |  |
| &nbsp;&nbsp;&nbsp;Class A Common Shares |  |  |  |
| &nbsp;&nbsp;&nbsp;Class B Common Shares |  |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital |  | 21239 (e) | 21239 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (5561) |  | (5561) |
| &nbsp;&nbsp;&nbsp;Net parent investment | 14796 | (14796)(e) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 9235 | 6443 | 15678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and equity | $23319 | $8339 | $31658 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Represents
 estimated net proceeds from the sale and issuance by us of 2.0 million Common Shares in this offering at the initial public
 offering price of $5.00 per share, after deducting the underwriting discounts and commissions and estimated offering expenses payable
 by us. This assumes no exercise of the underwriters' over-allotment option to purchase additional Common Shares.

(b) Represents
 the elimination of the carrying value of the Joliette Plant that will not transfer to the Company as part of the Separation.

(c) Represents
 the recognition of a right-of-use asset and operating lease obligation in connection with entering into the Joliette Plant Lease.

(d) Represents
 the elimination of the installment 20-year loan collateralized by the Joliette Plant that will not transfer to the Company as part
 of the Separation.

(e) Represents
 the elimination of Net parent investment, the establishment of additional paid-in capital in connection with this offering, and giving
 effect to the Landmark Warrant and the grant of RSUs to our directors and officers upon the completion of this offering.

---

| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **Nine Months Ended September 30, 2022<br> (unaudited)** | **Nine Months Ended September 30, 2022<br> (unaudited)** | **Nine Months Ended September 30, 2022<br> (unaudited)** |
|  | **Actual** | **Adjustments** | **Pro Forma** |
| Net product sales | $22076 | $- | $22076 |
| Net service revenues | 6370 | - | 6370 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 28446 |  | 28446 |
| Cost of products sold | 16233 | 100 (a) | 16333 |
| Cost of services | 5538 | - | 5538 |
| &nbsp;&nbsp;&nbsp;Total cost of revenues | 21771 | 100 | 21871 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 6675 | (100) | 6575 |
| Selling and administrative expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling | 1723 |  | 1723 |
| &nbsp;&nbsp;&nbsp;Administrative | 4138 | 132 (b) | 4270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total selling and administrative expenses | 5861 | 132 | 5993 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 814 | (232) | 582 |
| Other (expense) income: |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 3 |  | 3 |
| &nbsp;&nbsp;&nbsp;Interest expense | (85) | 76 (c) | (9) |
| &nbsp;&nbsp;&nbsp;Foreign currency transaction gain | 646 |  | 646 |
| &nbsp;&nbsp;&nbsp;Other income, net | 15 | - | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income | 579 | 76 | 655 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 1393 | (156) | 1237 |
| Income tax expense (benefit) | (417) | 36 (d) | (381) |
| &nbsp;&nbsp;&nbsp;Net income | $976 | $(120) | $856 |
| Pro forma net income per share: |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic |  |  | $0.11 |
| &nbsp;&nbsp;&nbsp;Diluted |  |  | $0.11 |
| Pro forma weighted-average shares used to compute net loss per share: (e) |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic |  |  | 8000 |
| &nbsp;&nbsp;&nbsp;Diluted |  |  | 8150 |

---

---

| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **Year Ended December 31, 2021<br> (unaudited)** | **Year Ended December 31, 2021<br> (unaudited)** | **Year Ended December 31, 2021<br> (unaudited)** |
|  | **Actual** | **Adjustments** | **Pro Forma** |
| Net product sales | $19631 | $- | $19631 |
| Net service revenues | 6341 | - | 6341 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 25972 |  | 25972 |
| Cost of products sold | 14078 | 127 (a) | 14205 |
| Cost of services | 4526 | - | 4526 |
| &nbsp;&nbsp;&nbsp;Total cost of revenues | 18604 | 127 | 18731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 7368 | (127) | 7241 |
| Selling and administrative expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling | 1781 |  | 1781 |
| &nbsp;&nbsp;&nbsp;Administrative | 4387 | 183 (b) | 4570 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total selling and administrative expenses | 6168 | 183 | 6351 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 1200 | (310) | 890 |
| Other (expense) income: |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (107) | 84 (c) | (23) |
| &nbsp;&nbsp;&nbsp;Foreign currency transaction loss | (65) |  | (65) |
| &nbsp;&nbsp;&nbsp;Other income, net | 153 | - | 153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (expense) income | (19) | 84 | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 1181 | (226) | 955 |
| Income tax expense | (360) | 53 (d) | (307) |
| &nbsp;&nbsp;&nbsp;Net income | $821 | $(173) | $648 |
| Pro forma net income per share: |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic |  |  | $0.08 |
| &nbsp;&nbsp;&nbsp;Diluted |  |  | $0.08 |
| Pro forma weighted-average shares used to compute net income per share: (e) |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic |  |  | 8000 |
| &nbsp;&nbsp;&nbsp;Diluted |  |  | 8150 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Represents
 (i) the elimination of depreciation expense related to the Joliette Plant that will not transfer to the Company as part of the Separation
 and (ii) the recognition of rent expense in connection with entering into the Joliette Plant Lease allocated to Cost of products
 sold.

(b) Represents
 (i) the recognition of legal fees incurred in connection with the defense of the outstanding product liability or personal injury
 claims and (ii) the recognition of rent expense in connection with entering into the Joliette Plant Lease allocated to Administrative
 expenses.

(c) Represents
 the elimination of interest expense related to the installment 20-year loan collateralized by the Joliette Plant that will not transfer
 to the Company as part of the Separation.

(d) Represents
 the income tax impact of adjustments (a) through (c).

(e) Pro
 forma weighted-average shares outstanding for purposes of calculating basis net income per share is based on the number of Common
 Shares expected to be outstanding following this offering. Pro forma weighted-average shares outstanding for purposes of calculating
 diluted net income per share is based on the number of Common Shares expected to be outstanding following this offering plus the
 issuance of the Landmark Warrant.

**SELECTED HISTORICAL AND OTHER COMBINED FINANCIAL DATA**

The selected historical condensed combined statements of income of Strong Global Entertainment for the years ended December 31, 2021 and December 31, 2020 have been derived from the audited combined financial statements of Strong Global Entertainment included elsewhere in this prospectus. The selected historical condensed combined statement of income of Strong Global Entertainment for the year ended December 31, 2019 has been derived from the audited combined financial statements of Strong Global Entertainment not included elsewhere in this prospectus. The selected historical condensed combined statements of operations of Strong Global Entertainment for the nine months ended September 30, 2022 and September 30, 2021 and the related selected historical condensed combined balance sheet as of September 30, 2022 have been derived from the unaudited combined financial statements of Strong Global Entertainment included elsewhere in this prospectus. In the opinion of management, the unaudited data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial information in those statements.

Our historical results are not necessarily indicative of our results in any future period. To ensure a full understanding of the selected financial data, the information presented below should be reviewed in combination with the audited combined financial statements and the related notes thereto included elsewhere in this prospectus.

This information is only a summary and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of Strong Global Entertainment" and the financial statements of Strong Global Entertainment and the notes thereto included elsewhere in this prospectus.

Our historical combined financial statements, which are discussed below, are prepared on a stand-alone basis in accordance with U.S. GAAP and are derived from FG Group Holdings' consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations, and include allocations of expenses from FG Group Holdings. Our combined results are not necessarily indicative of our future performance and do not reflect what our financial performance would have been had we been a stand-alone public company during the periods presented.

FG Group Holdings currently provides certain services to us, and costs associated with these functions have been allocated to us. The allocations include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, and other services. These costs were allocated on a basis of revenue, headcount or other measures we have determined as reasonable. Stock-based compensation includes expense attributable to our employees are also allocated from FG Group Holdings. These allocations are reflected within operating expenses in our combined statements of operations. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the offering or of the additional costs we will incur in the future as we operate as a stand-alone company.

Following the completion of this offering, we expect FG Group Holdings to continue to provide certain services to us and we expect to provide certain services to FG Group Holdings, pursuant to the Management Services Agreement. See the section titled *"Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings – Management Services Agreement".* Pursuant to the Management Services Agreement, we will charge FG Group Holdings a fee based on our actual costs for providing those services to FG Group Holdings (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). In turn, FG Group Holdings will also charge us a fee that is based on its actual costs for providing those services to us in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations).

Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including audit, investor relations, stock administration and regulatory compliance costs. These additional costs will differ from the costs that were historically allocated to us from FG Group Holdings.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** |
|  | **2022** | **2021** | **2021** | **2020** | **2019** |
| **Statement of Income Data:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net product sales | $22076 | $11811 | $19631 | $15987 | $26448 |
| &nbsp;&nbsp;&nbsp;Net service revenues | 6370 | 4395 | 6341 | 4833 | 10921 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenues | 28446 | 16206 | 25972 | 20820 | 37369 |
| &nbsp;&nbsp;&nbsp;Cost of products sold | 16233 | 7831 | 14078 | 10980 | 16369 |
| &nbsp;&nbsp;&nbsp;Cost of services | 5538 | 2861 | 4526 | 5193 | 8842 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenues | 21771 | 10692 | 18604 | 16173 | 25211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 6675 | 5514 | 7368 | 4647 | 12158 |
| &nbsp;&nbsp;&nbsp;Selling and administrative expenses: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling | 1723 | 1156 | 1781 | 1656 | 2080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative | 4138 | 2960 | 4387 | 4312 | 4700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total selling and administrative expenses | 5861 | 4116 | 6168 | 5968 | 6780 |
| &nbsp;&nbsp;&nbsp;Loss on disposal of assets | - | - | - | (33) | (69) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from operations | 814 | 1398 | 1200 | (1354) | 5309 |
| &nbsp;&nbsp;&nbsp;Other (expense) income: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | 3 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (85) | (84) | (107) | (112) | (139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustment to notes receivable |  |  |  |  | (2857) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign transaction gain (loss) | 646 | (56) | (65) | (292) | (288) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 15 | 167 | 153 | 3129 | 1732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | 579 | 27 | (19) | 2725 | (1552) |
| &nbsp;&nbsp;&nbsp;Income before income taxes | 1393 | 1425 | 1181 | 1371 | 3757 |
| &nbsp;&nbsp;&nbsp;Income tax (expense) benefit | (417) | (346) | (360) | 74 | (1864) |
| &nbsp;&nbsp;&nbsp;Net income | $976 | $1079 | $821 | $1445 | $1893 |

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| | | |
|:---|:---|:---|
|  | **September 30, 2022<br> (unaudited)** | **September 30, 2022<br> (unaudited)** |
|  | **Actual** | **Pro Forma As Adjusted<sup>(1)</sup>** |
| **Balance Sheet Data:** |  |  |
| **Assets:** |  |  |
| Cash and cash equivalents | $3189 | $10125 |
| Accounts receivable, net | 4901 | 4901 |
| Inventories, net | 3666 | 3666 |
| Property, plant and equipment, net | 4652 | 1479 |
| **Liabilities and equity:** |  |  |
| Accounts payable, accrued expenses and other current liabilities | $10029 | $9665 |
| Short- and long-term debt | 2723 | 407 |
| Lease obligations | 313 | 4889 |
| Total equity | 9235 | 15678 |

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(1) The pro forma as adjusted balance sheet data in the table above reflects (i) the Separation, (ii) the sale and issuance by us of our Common Shares in this offering, based upon the receipt of an estimated of $6.9 million of net proceeds therefrom, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, and (iii) the effect of the Landmark Warrant and the grant of RSUs to our directors and officers upon the completion of this offering. This assumes no exercise of the underwriters' over-allotment option to purchase additional Common Shares.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** |
|  | **2022** | **2021** | **2021** | **2020** | **2019** |
| **Statement of Cash Flow Data:** |  |  |  |  |  |
| Net cash (used in) provided by operating activities | $(1808) | $3158 | $4831 | $4023 | $4185 |
| Net cash used in investing activities | (604) | (150) | (394) | (467) | (1597) |
| Net cash provided by (used in) financing activities | 1037 | (613) | (3334) | (3353) | (2561) |
| **Other Supplemental Metrics:** |  |  |  |  |  |
| Gross margin | 23.5% | 34.0% | 28.4% | 22.3% | 32.5% |
| EBITDA(1) | $1996 | $2193 | $2194 | $2353 | $4792 |
| Adjusted EBITDA | 1447 | 674 | 725 | (119) | 6984 |

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**(1) Use of Non-GAAP Measures**

We have prepared our combined financial statements in accordance with United States GAAP. In addition to disclosing financial results prepared in accordance with GAAP, we disclose information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes, share-based compensation, fair value adjustments, severance, foreign currency transaction gains (losses), gains on insurance recoveries and other cash and non-cash charges and gains.

EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating our operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of our operations that, when coupled with the GAAP results, provides a more complete understanding of our financial results.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or to net cash from operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are (i) they do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, our working capital needs, (iii) EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, (v) they do not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, and (vii) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

We believe EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present EBITDA and Adjusted EBITDA because (i) we believe these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use EBITDA and Adjusted EBITDA internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.

The following table presents a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30,** | **Nine** **Months Ended**<br> **September** **30,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2022** | **2021** | **2021** | **2020** | **2019** |
| Net income | $976 | $1079 | $821 | $1445 | $1893 |
| Interest expense, net | 82 | 84 | 107 | 112 | 139 |
| Income tax expense (benefit) | 417 | 346 | 360 | (74) | 1864 |
| Depreciation and amortization | 521 | 684 | 906 | 870 | 896 |
| &nbsp;&nbsp;&nbsp;EBITDA | 1996 | 2193 | 2194 | 2353 | 4792 |
| Stock-based compensation | 97 | 134 | 175 | 232 | 213 |
| Loss on disposal of assets and impairment charges |  |  |  | 33 | 69 |
| Foreign currency transaction (gain) loss | (646) | 56 | 65 | 292 | 288 |
| Gain on property and casualty and business interruption insurance recoveries |  | (148) | (148) | (3107) | (1235) |
| Employee retention credit |  | (1576) | (1576) |  |  |
| Fair value adjustment to notes receivable |  |  |  |  | 2857 |
| Severance and other | - | 15 | 15 | 78 | - |
| &nbsp;&nbsp;&nbsp;Adjusted EBITDA | $1447 | $674 | $725 | $(119) | $6984 |

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**MANAGEMENT'S DISCUSSION AND ANALYSIS**

**OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following is a discussion and analysis of the financial condition and results of operations of Strong Global Entertainment as of, and for, the periods presented. As discussed elsewhere, our historical combined financial statements, which are discussed below, are prepared on a stand-alone basis in accordance with U.S. GAAP and are derived from FG Group Holdings' consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations, and include allocations of expenses from FG Group Holdings. Our combined results are not necessarily indicative of our future performance and do not reflect what our financial performance would have been had we been a stand-alone public company during the periods presented. And such information does not give effect to the Separation. We describe in this section the businesses that will be contributed to us by FG Group Holdings as part of our Separation, as if they were our businesses for all historical periods described.* 

**Overview**

We are one of the largest manufacturers of premium projection screens and customized screen support systems, and we also distribute digital cinema equipment and provide technical support services to the entertainment industry. We provide exhibitors with a single source for cinema and projection products, solutions and services. We are focused on improving the operating performance as the United States and other countries recover from COVID-19 related business disruptions. We plan to manage the Strong Global Entertainment business segment to grow market share and organic revenue and improve operating results, with the intent of expanding the ultimate valuation of the business. In addition, we may acquire other businesses, which may be within or outside of the Company's existing markets.

**Impact of COVID-19 Pandemic**

In December 2019, a novel coronavirus disease ("COVID-19") was initially reported, and in March 2020, the World Health Organization characterized COVID-19 as a pandemic. COVID-19 and variants thereof have had a widespread and detrimental effect on the global economy as a result of the continued increase in the number of cases, particularly in the United States, and actions by public health and governmental authorities, businesses, other organizations and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns. The ultimate impact of the COVID-19 pandemic on our business and results of operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the COVID-19 pandemic, including repeat or cyclical outbreaks, and any additional preventative and protective actions that governments, or we or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time, but we expect it will continue to have a material impact on our business, financial condition and results of operations.

The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and advertising industries, and their ability and willingness to spend on our products and services, which continues to negatively impact us in certain geographic regions. A significant number of our customers temporarily ceased operations during the pandemic, some of which continue to be suspended; as such, we have experienced, and anticipate that we will continue to experience at least until our customers have resumed normal operations, a significant decline in our results of operations. Many movie theaters and other entertainment centers were forced to close or curtail their hours and, correspondingly, have terminated or deferred their non-essential capital expenditures. Although most movie theaters and chains have re-opened, theater operators may continue to experience reduced revenues for an extended period due to, among other things, consumer concerns over safety and social distancing, depressed consumer sentiment due to adverse economic conditions, including job losses, capacity restrictions, and postponed release dates, shortened "release windows" between the release of motion pictures in theaters and an alternative delivery method, or the release of motion pictures directly to alternative delivery methods, bypassing the theater entirely, for certain movies, and continued COVID-19 outbreaks could cause these theaters to suspend operations again. The COVID-19 pandemic also adversely affected film production and may adversely affect the pipeline of feature films available in the short- or long-term. In addition to decreased business spending by our customers and prospective customers and reduced demand for our products, lower renewal rates by our customers, increased customer losses/churn, increased challenges in or cost of acquiring new customers and increased risk in collectability of accounts receivable may have a material adverse effect on our business and results of operations. We have also experienced other negative impacts; among other actions, we were required to temporarily close our screen manufacturing facility in Canada due to the governmental response to COVID-19, which we were able to re-open on May 11, 2020, and experienced lower revenues from field services and a reduction in non-recurring time and materials-based services. The completion of our outsourced screen finishing facility in China by a third party was also delayed by the COVID-19 pandemic. We may also experience one or more of the following conditions that could have a material adverse impact on our business operations and financial condition: adverse effects on our strategic partners' businesses or on the businesses of companies in which we hold equity stakes; impairment charges; extreme currency exchange-rate fluctuations; inability to recover costs from insurance carriers; and business continuity concerns for us, our customers and our third-party vendors.

The Consolidated Appropriations Act extended and expanded the availability of the CARES Act employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ('ARP Act'), enacted on March 11, 2021, extended and expanded the availability of the employee retention credit through December 31, 2021, however, certain provisions apply only after December 31, 2020. This new legislation expanded the group of qualifying businesses to include businesses with fewer than 500 employees and those who previously qualified for the Paycheck Protection Program (the "PPP Loan"). The employee retention credit is calculated to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. We have determined that the qualifications for the credit were met in the first, second and third quarters of 2021. During the nine months ended September 30, 2021, we applied for refunds of a total of $1.6 million of payroll taxes previously paid and recognized a corresponding reduction in compensation expenses. Of the $1.6 million, $1.3 million was recorded within cost of services and $0.3 million was recorded within selling and administrative expenses during the nine months ended September 30, 2021. The Infrastructure Investment and Jobs Act was signed into law November 15, 2021, and ended the availability of the employee retention credit for the entire fourth quarter of 2021.

The future and ultimate impact of the COVID-19 pandemic on our business and results of operations beyond the third quarter of fiscal year 2022 is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and protective actions that governments, or we or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations. However, we expect that our results of operations, including revenues, in future periods will continue to be adversely impacted by the COVID-19 pandemic and its negative effects on global economic conditions, which include the possibility of a global recession.

We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to the unprecedented nature of the disruption to our operations and the unpredictability of the COVID-19 global pandemic. As a consequence, our estimates of the duration of the pandemic and the severity of the impact on our future earnings and cash flows could change and have a material impact on our results of operations and financial condition.

**Results of Operations:**

The following tables set forth our operating results for the periods indicated (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine** **Months Ended** <br> **September 30,** | **Nine** **Months Ended** <br> **September 30,** | | |
|  | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
|  | (dollars in thousands) | (dollars in thousands) | (dollars in thousands) | |
| Net revenues | $28446 | $16206 | $12240 | 75.5% |
| Cost of revenues | 21771 | 10692 | 11079 | 103.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 6675 | 5514 | 1161 | 21.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit percentage | 23.5% | 34.0% |  |  |
| Selling and administrative expenses | 5861 | 4116 | 1745 | 42.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 814 | 1398 | (584) | (41.8)% |
| Other income (expense) | 579 | 27 | 552 | n/m |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 1393 | 1425 | (32) | (2.2)% |
| Income tax expense | (417) | (346) | (71) | 20.5% |
| Net income | $976 | $1079 | $(103) | (9.5)% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** | | |
|  | **2021** | **2020** |<br>**$ Change** |<br>**% Change** |
|  | (dollars in thousands) | (dollars in thousands) | (dollars in thousands) | |
| Net revenues | $25972 | $20820 | $5152 | 24.7% |
| Cost of revenues | 18604 | 16173 | 2431 | 15.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 7368 | 4647 | 2721 | 58.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit percentage | 28.4% | 22.3% |  |  |
| Selling and administrative expenses | 6168 | 5968 | 200 | 3.4% |
| Loss on disposal of assets | - | (33) | 33 | (100.0)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from operations | 1200 | (1354) | 2554 | (188.6)% |
| Other (expense) income | (19) | 2725 | (2744) | (100.7)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 1181 | 1371 | (190) | (13.9)% |
| Income tax (expense) benefit | (360) | 74 | (434) | (586.5)% |
| &nbsp;&nbsp;&nbsp;Net income | $821 | $1445 | $(624) | (43.2)% |

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**Nine** **Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021**

Revenue increased 75.5% to $28.4 million during the first nine months of 2022 from $16.2 million in the first nine months of 2021. The increase from the prior year was due to a $10.3 million increase in product revenue and a $2.0 million increase in service revenue. Demand and revenue from products and services benefited from the continuing recovery in the cinema industry. As the industry recovery has progressed, exhibitors are beginning to re-examine capital improvements, including upgrading their auditoriums from xenon projection to laser projection, which helps drive demand for our products and services. We have also increased the scope of our services to better support our customers and to increase market share in cinema services. We expect the upgrades from xenon to laser to accelerate in 2023 and continue for at least the next several years.

Gross profit increased 21.1% to $6.7 million in the first nine months of 2022 from $5.5 million in the first nine months of 2021. The increase in gross profit was primarily attributable to higher screen, equipment and field service revenue, partially offset by $1.3 million of employee retention credits recognized in the prior period. As a percentage of revenue, gross profit was 23.5% in 2022 compared to 34.0% of revenues in 2021. Excluding the impact of the employee retention credit, gross profit during the nine months ended September 30, 2021 would have been 25.8%.

Gross profit from product sales was $5.8 million or 26.5% of revenues during the first nine months of 2022 compared to $4.0 million or 33.7% of revenues during the first nine months of 2021. The decrease in gross profit percentage resulted primarily from product mix as revenue from projection and audio equipment grew at a faster rate than our higher margin screen products and services. Costs of labor, materials, packaging and shipping also increased, partially offsetting the favorable impact of higher revenue levels. Gross profit from service revenue was $0.8 million or 13.1% of revenues during the first nine months of 2022 compared to $1.5 million or 34.9% of revenues during the first nine months of 2021. Excluding the impact of employee retention credits recognized in the prior period, gross profit from service revenue would have been $0.3 million or 4.2% of revenue.

Income from operations during the first nine months of 2022 was $0.8 million compared to $1.4 million during the first nine months of 2021. The decrease in income from operations was primarily due to the favorable impact on the prior year period of $1.6 million of employee retention credits and $0.1 million of bad debt recovery, which did not recur in the current period. In addition, there were also increases to selling and administrative expenses due to higher compensation and benefits, marketing and travel and entertainment expenses related to the increased revenue and business activity in the current period as compared to the prior year.

Total other income of $0.6 million during the first nine months of 2022 included $0.6 million of foreign currency transaction adjustments, partially offset by $0.1 million of net interest expense. Total other income of $27 thousand during the first nine months of 2021 primarily consisted of a $0.1 million gain on our property and casualty claim for the weather-related incident at our production facility in Quebec, Canada, partially offset by $0.1 million of foreign currency transaction adjustments and $0.1 million of interest expense.

Income tax expense was approximately $0.4 million and $0.3 million during the nine months ended September 30, 2022 and September 30, 2021, respectively. Our income tax expense consisted of income tax on both domestic and foreign earnings.

**Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020**

Revenue increased 24.7% to $26.0 million in 2021 from $20.8 million in 2020. The increase from the prior year was due to a $3.6 million increase in product revenue and a $1.5 million increase in service revenue. Demand and revenue from both product sales and service revenue benefited from the continuing recovery from the impact of COVID-19. As restrictions eased and customer demand increased, revenues from have increased compared to the same period in 2020. Revenue during 2020 was negatively impacted by the COVID-19 pandemic, including the government-mandated temporary closure of our screen manufacturing facility in Quebec, Canada and lower revenues from equipment sales and field service projects. The impact was particularly acute in the second quarter of 2020 when most entertainment venues across the world were forced to close in response to the pandemic. In the second half of 2020 and throughout 2021, our revenues recovered as many cinemas and theme parks began reopening.

While major markets have eased COVID-19 related restrictions, or lifted them entirely, we expect the pace of recovery of our revenue will continue to be dependent upon the overall measures in place to control COVID-19, and any variants thereof, and the pace at which studios release new feature films to the market. Studios recently resumed releasing major movies to the cinemas and continue to have a backlog of content planned for release in 2022 and 2023. In addition, we believe many of our customers will benefit from government programs such as the Shuttered Venue Operators Grant, which has allocated over $14 billion of assistance to the entertainment industry.

Gross profit increased 58.6% to $7.4 million in 2021 from $4.6 million in 2020. As a percentage of revenue, gross profit improved to 28.4% in 2021 compared to 22.3% of revenues in 2020. The 2021 annual period included a positive impact of $1.3 million as a result of the employee retention credit. Excluding the impact of the employee retention credit, gross profit for the year ended December 31, 2021 would have been 23.5% of revenue. The increase in gross profit was primarily attributable to higher screen, equipment and field service revenue, combined with the favorable impact of the $1.3 million employee retention credit and actions taken to control costs. Gross profit from product sales was $5.6 million or 28.3% of revenues during 2021 compared to $5.0 million or 31.3% of revenues during 2020. Gross profit from service revenue was $1.8 million or 28.6% of revenues during 2021 compared to negative $0.4 million or negative 7.4% of revenues during 2020.

Income from operations during 2021 was $1.2 million compared to a loss from operations of $1.4 million during 2020. The improvement in income from operations was primarily due to the increase in revenue and gross profit described above, combined with the benefit of $0.3 million of employee retention credits included in selling and administrative expenses.

Total other income of $19,000 during 2021 included $0.1 million of interest expense, $0.1 million of foreign currency transaction adjustments, partially offset by a $0.1 million gain on our property and insurance claim for the weather-related incident at our production facility in Quebec, Canada. Total other income of $2.7 million during 2020 primarily consisted of a $3.1 million gain on our property and casualty and business interruption claims for the weather-related incident at our production facility in Quebec, partially offset by $0.1 million of interest expense and $0.3 million of foreign currency transaction adjustments. We believe the business interruption settlement covered the majority of the losses we incurred as a result of the roof collapse, and the property and casualty gain was comprised of the insurance recovery in excess of the carrying value of the damaged equipment.

Income tax expense was approximately $0.4 million during 2021 compared to income tax benefit of $0.1 million during 2020. Our income tax expense consisted of income tax on both domestic and foreign earnings.

**Use of Non-GAAP Measures**

We prepare our consolidated financial statements in accordance with United States generally accepted accounting principles. In addition to disclosing financial results prepared in accordance with GAAP, we disclose information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes share-based compensation, impairment charges, fair value adjustments, severance, foreign currency transaction gains (losses), and expenses, gains on insurance recoveries, certain tax credits and other cash and non-cash charges and gains.

EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating our operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of our operations that, when coupled with the GAAP results, provides a more complete understanding of our financial results.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or to net cash from operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are (i) they do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, our working capital needs, (iii) EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, (v) they do not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, and (vii) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

We believe EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present EBITDA and Adjusted EBITDA because (i) we believe these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use EBITDA and Adjusted EBITDA internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.

The following table sets forth reconciliations of net income under GAAP to EBITDA and Adjusted EBITDA (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30,** | **Nine** **Months Ended**<br> **September** **30,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2022** | **2021** | **2021** | **2020** |
| Net income | $976 | $1079 | $821 | $1445 |
| Interest expense | 82 | 84 | 107 | 112 |
| Income tax expense (benefit) | 417 | 346 | 360 | (74) |
| Depreciation and amortization | 521 | 684 | 906 | 870 |
| &nbsp;&nbsp;&nbsp;EBITDA | 1996 | 2193 | 2194 | 2353 |
| Stock-based compensation | 97 | 134 | 175 | 232 |
| Loss on disposal of assets and impairment charges |  |  |  | 33 |
| Foreign currency transaction (gain) loss | (646) | 56 | 65 | 292 |
| Gain on property and casualty and business interruption insurance recoveries |  | (148) | (148) | (3107) |
| Employee retention credit |  | (1576) | (1576) |  |
| Severance and other | - | 15 | 15 | 78 |
| &nbsp;&nbsp;&nbsp;Adjusted EBITDA | $1447 | $674 | $725 | $(119) |

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**Liquidity and Capital Resources**

During the past several years, we have primarily met our working capital and capital resource needs from our operating cash flows and credit facilities. Our primary cash requirements involve operating expenses, working capital, capital expenditures, and investments. Our capital expenditures during 2020 included costs incurred in the construction of the production facility in Quebec, Canada that sustained damage as a result of inclement weather.

We ended the third quarter of 2022 with total cash and cash equivalents of $3.2 million. Of the $3.2 million as of September 30, 2022, $1.6 million was held in Canada and the remaining $1.6 million was held in the U.S.

In response to the COVID-19 pandemic and related closures of cinemas, theme parks and entertainment venues, we took decisive actions discussed above to conserve cash, reduce operating expenditures, delay capital expenditures, and manage working capital.

*Cash Flows from Operating Activities*

Net cash used in operating activities was $1.8 million during the first nine months of 2022 as compared to net cash provided by operating activities of $3.2 million during the first nine months of 2021. Net cash used in operating activities during the first nine months of 2022 declined from 2021, despite improved operating results, largely due to working capital timing, specifically vendor payments made in the first nine months of 2022 for projection and audio equipment sold to customers where advance deposits were received in the prior period.

Net cash provided by operating activities was $4.8 million in 2021 as compared to $4.0 million in 2020. Net cash provided by operating activities during 2021 included cash generated from operating results, as well as favorable changes in working capital, including cash deposits from customers for projection and audio equipment sales. Net cash provided by operating activities during 2021 included favorable changes in working capital, partially offset by our operating loss.

*Cash Flows from Investing Activities*

Net cash used in investing activities was $0.6 million and $0.2 million during the first nine months of 2022 and 2021, respectively. Net cash used in investing activities during the first nine months of 2022 included a $0.4 million outflow related to the acquisition of film and television programming rights and $0.2 million of capital expenditures. Net cash used in investing activities during the first nine months of 2021 consisted entirely of capital expenditures.

Net cash used in investing activities was $0.4 million and $0.5 million during 2021 and 2020, respectively, and consisted entirely of capital expenditures.

*Cash Flows from Financing Activities*

Net cash provided by financing activities was $1.0 million during the first nine months of 2022, consisting primarily of $1.3 million transferred from FG Group Holdings, partially offset by $0.2 million of principal payments on debt. Net cash used in financing activities was $0.6 million during the first nine months of 2021, consisting primarily of $0.4 million transferred to FG Group Holdings and $0.2 million of principal payments on debt.

Net cash used in financing activities was $3.3 million in 2021, consisting primarily of $3.0 million transferred to FG Group Holdings and $0.3 million of principal payments on debt. Net cash used in financing activities was $3.4 million in 2020, consisting primarily of $3.5 million transferred to FG Group Holdings and $0.2 million of principal payments on debt, partially offset by the issuance of $0.4 million of debt.

**Debt**

*Strong/MDI Installment Loans*

On September 5, 2017, Strong/MDI, entered into a demand credit agreement, as amended and restated May 15, 2018, with a bank consisting of a revolving line of credit for up to CAD$3.5 million subject to a borrowing base requirement, a 20-year installment loan for up to CAD$6.0 million and a 5-year installment loan for up to CAD$0.5 million.

On June 7, 2021, Strong/MDI entered into a demand credit agreement (the "2021 Credit Agreement"), which amended and restated the demand credit agreement dated as of September 5, 2017. The 2021 Credit Agreement consists of a revolving line of credit for up to CAD$2.0 million subject to a borrowing base requirement, a 20-year installment loan for up to CAD$5.1 million and a 5-year installment loan for up to CAD$0.5 million. Amounts outstanding under the line of credit are payable on demand and bear interest at the prime rate established by the lender. Amounts outstanding under the installment loans bear interest at the lender's prime rate plus 0.5% and are payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loans at any time. The Strong/MDI credit facilities are secured by a lien on Strong/MDI's Quebec, Canada facility and substantially all of Strong/MDI's assets. The 2021 Credit Agreement requires Strong/MDI to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity method investments) not exceeding 2.5 to 1, a current ratio (excluding amounts due from related parties) of at least 1.3 to 1 and minimum "effective equity" of CAD$4.0 million. There was CAD$3.2 million, or approximately $2.3 million, of principal outstanding on the 20-year installment loan as of September 30, 2022, which bears variable interest at 5.2%. There was CAD$0.3 million, or approximately $0.2 million, of principal outstanding on the 5-year installment loan as of September 30, 2022, which also bears variable interest at 5.2%. Strong/MDI was in compliance with its debt covenants as of September 30, 2022. These borrowings are due on demand by the lender. Strong/MDI does not intend to transfer the revolving line of credit and the 20-year installment loan collateralized by the Joliette Plant to us.

In January 2023, Strong/MDI entered into a demand credit agreement (the "2023 Credit Agreement"), which amends and restates the 2021 Credit Agreement. The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million. Under the 2023 Credit Agreement: (i) the amount outstanding under the line of credit is payable on demand and bears interest at the prime rate the lender's prime rate plus 1.0% and (ii) the amount outstanding under the installment loan bears interest at the lender's prime rate plus 0.5% and is payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loan at any time. The 2023 Credit Agreement is secured by a lien on Strong/MDI's Quebec, Canada facility and substantially all of Strong/MDI's assets. The 2023 Credit Agreement requires Strong/MDI to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity holdings) not exceeding 2.5 to 1 and a fixed charge coverage ratio of not less than 1.1 times earnings before interest, income taxes, depreciation and amortization.

**Landmark Transaction**

On March 3, 2022, Strong Studios acquired, from Landmark, the rights to original feature films and television series, and has been assigned third party rights to content for global multiplatform distribution. The transaction entailed the acquisition of certain projects which are in varying stages of development, none of which have, as yet, produced revenue. In connection with such assignment and purchase, Strong Studios agreed to pay to Landmark approximately $1.7 million in four separate payments, $0.3 million of which was paid upon the closing of the transaction. The $1.7 million acquisition price was allocated to three projects in development, including $1.0 million to *Safehaven*, $0.3 million to *Flagrant* and $0.4 million to *Shadows in the Vineyard*. We also agreed to issue the Landmark Warrant. The Landmark Warrant allows for cashless exercise in certain limited circumstances and provides for certain registration rights for such warrant shares. In the event that the initial public offering does not occur within a specified time, Landmark would have the right to surrender the warrant in exchange for 2.5% ownership in Strong Studios.

As a condition precedent to entry into the AA Agreement, Strong Studios agreed to enter into distribution agreements for the AA Projects (the "AA Distribution Agreements") with Screen Media Ventures, LLC ("SMV"). Pursuant to the AA Distribution Agreements, SMV agreed to purchase the global distribution rights to *Safehaven* for $6.5 million and *Flagrant* for $2.5 million upon delivery of each project. In January 2023, Strong Studios amended its agreement with SMV resulting in Strong Studios retaining the worldwide global distribution rights for the *Flagrant* series and releasing SMV from the obligation to purchase the distribution rights for the series.

During the second quarter of 2022, Safehaven 2022, Inc. was established to manage the production and financing of the *Safehaven* television series, one of the projects acquired from Landmark. Strong Studios owns 49% of Safehaven 2022 and the remaining 51% is owned by Unbounded. We did not pay any consideration in exchange for our 49% equity interest in Safehaven 2022. Unbounded also did not contribute any assets or liabilities to Safehaven 2022 and agreed to provide day-to-day management services in exchange for their 51% ownership. Unbounded will also serve as a co-producer on the project. We assigned the Landmark distribution agreement to Safehaven 2022, and the Landmark distribution agreement serves as collateral for the production financing at Safehaven 2022. We will share profits and losses, if any, from Safehaven 2022 with Unbounded on a pro-rata basis based on their relative ownership percentages.

We allocated $1.0 million of the $1.7 million acquisition price to the *Safehaven* project and incurred an additional $0.1 million of development costs during the nine months ended September 30, 2022. We transferred the $1.1 million in intellectual property representing the rights and assets related to the *Safehaven* project and Safehaven 2022 agreed to reimburse Strong Studios $1.1 million for those costs following payment of any senior secured debt and prior to any profit participations or equity distributions. The $1.1 million payable to Strong Studios represents an obligation of Safehaven 2022 to Strong Studios and is not contingent on any specific event. Accordingly, we have classified the amount due from Safehaven 2022 as a receivable within Other current assets on our Combined Balance Sheet as of September 30, 2022. We expect Safehaven 2022 to reimburse the acquisition cost allocated to the project based on its ultimate expected revenues and profits from the exploitation of the project. Safehaven 2022 will begin to generate revenue and expenses upon delivery of the completed *Safehaven* project to SMV, which is expected to occur in early 2023. The $6.5 million minimum guarantee is due and payable to Safehaven 2022 in installments of 25% upon delivery and acceptance, 25% three months thereafter, and the remaining 50% six months thereafter. Upon delivery and acceptance, Safehaven 2022 expects to recognize $6.5 million in initial revenue from the distribution rights and will record cost of sales using the individual-film-forecast method based on the ratio of the current period's revenues to management's estimated remaining total gross revenues to be earned. Safehaven 2022 is an equity method holding and we will reflect our proportionate share of the net periodic profit and loss of Safehaven 2022 as equity method income (loss) during each reporting period.

Safehaven 2022 subsequently entered into an $8.9 million Loan and Security Agreement with Bank of Hope to provide interim production financing for the *Safehaven* production, secured by the Landmark distribution agreement. Safehaven 2022 is the sole borrower and guarantor under the loan agreement. As of September 30, 2022, Safehaven 2022 had borrowed $8.6 million under the facility for production costs incurred to that date. Safehaven 2022 has also received working capital advances of $0.4 million from FG Group Holdings, which was funded on behalf of Strong Studios. Strong Studios expects to be reimbursed by Safehaven 2022 for the working capital advances when tax credits are received in the second half of 2023. Upon reimbursement of the working capital advances from Safehaven 2022, Strong Studios will then reimburse FG Group Holdings.

We reviewed our ownership in Safehaven 2022 and concluded that we have significant influence, but not a controlling interest, in Safehaven 2022 based on our ownership being less than 50% along with having one of three representatives on the board. We also reviewed whether we otherwise had the power to make decisions that significantly impact the economic performance of Safehaven 2022 and concluded that we did not control the entity and are not the primary beneficiary. Accordingly, we will apply the equity method of accounting to our equity holding in Safehaven 2022 and will record our proportionate share of the net income/loss resulting from the equity holding as a single line item captioned "equity method holding income (loss)" on our combined statement of operations.

**Credit Risk Concentrations**

Our top ten customers accounted for approximately 54% and 48% of combined net revenues during the nine months ended September 30, 2022 and, September 30, 2021 respectively, and 39% of combined net revenues during the year ended December 31, 2021. Trade accounts receivable from these customers represented approximately 45% and 29% at September 30, 2022 and December 31, 2021, respectively. None of our customers accounted for more than 10% of our combined net revenues during the nine months ended September 30, 2022, and none of our customers accounted for more than 10% of our net combined receivables as of September 30, 2022. One of our customers accounted for more than 10% of our combined net revenues during the nine months ended September 30, 2021. None of our customers accounted for more than 10% of both our combined net revenues during 2021 and our net combined receivables as of December 31, 2021. While we believe our relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from our significant customers could have a material adverse effect on our financial condition and results of operations. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

Some operators in the cinema industry carry high levels of balance sheet leverage arising from pre-COVID acquisitions. Cineworld Group Plc, the parent company of Regal Cinemas and one of the largest cinema operators, filed for Chapter 11 bankruptcy on September 7, 2022 to restructure their balance sheet and alleviate their debt burden. As of September 30, 2022, we had $0.3 million in accounts receivable related to products and services sold to Regal Cinemas. The bankruptcy filing is expected to negatively impact the collectability of our accounts receivable and could also negatively impact our revenue in future periods.

Financial instruments that potentially expose us to a concentration of credit risk principally consist of accounts receivable. We sell products to a large number of customers in many different geographic regions. To minimize credit concentration risk, we perform ongoing credit evaluations of our customers' financial condition or use letters of credit.

**Hedging and Trading Activities**

Our primary exposure to foreign currency fluctuations pertains to our operations in outside of Canada. In certain instances, we may enter into foreign exchange contracts to manage a portion of this risk. We do not have any trading activities that include non-exchange traded contracts at fair value.

**Off-Balance Sheet Arrangements**

We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

**Inflation**

We believe that the relatively moderate rates of inflation in recent years have not had a significant impact on our net revenues or profitability. Historically, we have been able to offset any inflationary effects by either increasing prices or improving cost efficiencies.

**Recently Issued Accounting Pronouncements**

See Note 2, Summary of Significant Accounting Policies, to the combined financial statements for a description of recently issued accounting pronouncements.

**Critical Accounting Policies and Estimates**

***Revenue Recognition***

The Company accounts for revenue using the following steps:

● Identify the contract, or contracts, with a customer;

● Identify the performance obligations in the contract;

● Determine the transaction price;

● Allocate the transaction price to the identified performance obligations; and

● Recognize revenue when, or as, the Company satisfies the performance obligations.

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine whether they are distinct, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.

As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company typically does not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when the Company invoices clients, or receives cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation.

The Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of September 30, 2022, December 31, 2021 or December 31, 2020.

***Film and Television Programming Rights***

Commencing in March 2022, the Company began producing original productions and acquiring rights to films and television programming. Film and television programming rights include the unamortized costs of in-process or in-development content produced or acquired by us. Our capitalized costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. Film and television program rights are stated at the lower of amortized cost or estimated fair value.

The costs of producing content are amortized using the individual-film-forecast method. These costs are amortized based on the ratio of the current period's revenues to management's estimated remaining total gross revenues to be earned ("Ultimate Revenue") as of each reporting date to reflect the most current available information. Management's judgment is required in estimating Ultimate Revenue and the costs to be incurred throughout the life of each film or television program. Amortization is adjusted when necessary to reflect increases or decreases in forecasted Ultimate Revenues.

For an episodic television series, the period over which Ultimate Revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. For films, Ultimate Revenue includes estimates over a period not to exceed ten years following the date of initial release.

Content assets are expected to be predominantly monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change in the expected usefulness of the content or the fair value may be less than the unamortized cost.

Due to the inherent uncertainties involved in making such estimates of Ultimate Revenues and expenses, these estimates may differ from actual results. In addition, in the normal course of our business, some films and titles will be more successful or less successful than anticipated. Management regularly reviews and revises, when necessary, its Ultimate Revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. An increase in the estimate of Ultimate Revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of Ultimate Revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically results in an impairment requiring a write-down of the film cost to the title's fair value. We have not yet incurred any of these write-downs.

An impairment charge would be recorded in the amount by which the unamortized costs exceed the estimated fair value. Estimates of future revenue involve measurement uncertainties and it is therefore possible that reductions in the carrying value of film library costs may be required because of changes in management's future revenue estimates.

***Cost Allocations***

Our historical combined financial statements are prepared on a stand-alone basis in accordance with U.S. GAAP and are derived from FG Group Holdings' consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations and include allocations of expenses from FG Group Holdings. FG Group Holdings currently provides certain services to us, and costs associated with these functions have been allocated to us. The allocations include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, and other services. These costs were allocated on a basis of revenue, headcount or other measures we have determined as reasonable. Stock-based compensation includes expense attributable to our employees are also allocated from FG Group Holdings. These allocations are reflected within operating expenses in our combined statements of operations. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the offering or of the additional costs we will incur in the future as we operate as a stand-alone company.

**Quantitative and Qualitative Disclosures About Market Risk**

The principal market risks affecting us are exposure to interest rates and foreign currency exchange rates. We market our products throughout the U.S. and the world. As a result, we could be adversely affected by such factors as changes in foreign currency rates and weak economic conditions. As a majority of our sales are currently denominated in U.S. dollars, a strengthening of the dollar can and sometimes has made our products less competitive in foreign markets.

Interest Rates—Interest rate risks from our interest related accounts are not deemed significant. As of September 30, 2022, there was CAD$3.2 million, or approximately $2.3 million, of principal outstanding on a 20-year installment loan, which bears variable interest at 5.2%. On September 30, 2022, there was CAD$0.3 million, or approximately $0.2 million, of principal outstanding on a 5-year installment loan, which also bears variable interest at 5.2%. A 1.00% increase in the effective interest rate applied to these borrowings would result in an increase in pre-tax interest expense of approximately $30,000 on an annualized basis.

Foreign Exchange—Exposures to transactions denominated in currencies other than the entity's functional currency are primarily related to our subsidiaries operating outside of Canada. Fluctuations in the value of foreign currencies create exposures, which can adversely affect our results of operations. From time to time, as market conditions indicate, we may enter into foreign currency contracts to manage the risks associated with forecasted transactions. Our cash at our U.S. subsidiary is denominated in foreign currencies, where fluctuations in exchange rates will impact our cash balances in Canadian dollar terms. A hypothetical 10% change in the value of the U.S. dollar would impact our reported cash balance by approximately $0.3 million.

**BUSINESS**

**Organization and Business Overview**

**Operations**

Following the Separation, Strong Global Entertainment will include the operations of Strong/MDI, a leading global manufacturer and distributor of premium large format projection screens and coatings, STS, which provides comprehensive managed services, technical support and other products and services in the United States. Strong Global Entertainment's key markets include the cinema exhibition industry, theme parks, schools, museums, networks and other entertainment-related markets. We also distribute and support third party products, including digital projectors, servers, menu boards and sound systems.

**Products and Services**

*<u>Projection Screens and Support Systems</u>* — We believe we are a leading manufacturer and distributor of premium large format projection screens to the cinema industry in North America and around the globe. We have contractual relationships to supply screens to IMAX, AMC, Cinemark and many of the other major cinema operators worldwide. We expect those relationships to continue post Separation. We also manufacture innovative screen support structures custom built to adapt to virtually any venue requirement, with a unique self-standing modular construction that allows for easy assembly and adjustable size.

In addition to traditional projection screens, we also manufacture our *Eclipse* curvilinear screens, which are specially designed to provide maximum viewer engagement in media-based attractions and immersive projection environments. We distribute Eclipse screens for use in theme parks, immersive exhibitions, as well as military simulation applications. The solid surface is designed to minimize light loss and maintain higher resolution at lower lumen output. Patented speaker panels allow selective placement of rear mounted speakers to ensure the audio derives from the source media on screen. Applications include interactive dark rides, 3D/4D theme park rides, flying theaters and motion simulators.

Our management believes that our screens are among the highest quality in the industry in terms of performance including the amount of gain (or brightness of the image reflected from the screen's surface), viewing angles, and other characteristics important to the viewing experience. Our high quality is driven by our innovative manufacturing process, focus on quality control and our proprietary coatings. We believe that we are the only major screen manufacturer that develops and produces its own proprietary coatings, which are critical to the overall quality and continued innovation of our screens.

*<u>Technical Services</u>* — We provide digital projection equipment installation and after-sale maintenance and network support services to the cinema operators in the United States. Our field service technicians and our NOC staff work hand in hand to monitor and resolve system and other issues for our customers. Many of our customers choose annual managed service arrangements for maintenance and repair services. We also provide maintenance services to customers who choose not to be covered by a managed service contract on a time and materials basis. Our NOC, staffed by software engineers and systems technicians, operates 24/7/365 and monitors our customers' networked equipment remotely, often providing proactive solutions to systems issues before they cause system failures.

*<u>Other Products</u>* — We distribute projectors, servers, audio systems and other third-party products including lenses and lamps to customers in North and South America.

**Strong Studios**

We recently launched Strong Studios, a subsidiary of STS, for the purpose of expanding our Entertainment Business to include content creation and production of feature films and series. The launch of Strong Studios is intended to further diversify our revenue streams and increase our addressable markets, while leveraging our existing relationships in the industry. Strong Studios acquired, from Landmark, an unrelated party, rights to certain original feature films and television series, and has been assigned third party rights to content for global multiplatform distribution.

David Ozer has served as the president of Strong Studios since March 2022. Prior to joining Strong Studios, he served from 2018 to 2022 as CEO of Landmark Studio Group. Prior to that, he held executive level positions at multinational media corporations, including Starz Media, RHI Entertainment, Sonar, DIC Entertainment and Sony Pictures Television.

**Markets**

We sell screen systems worldwide, with primary markets being North America and Asia. Screen systems are primarily sold on a direct basis, although we also use third-party distributors and integrators in some markets. We plan to continue, selling our screens worldwide, both directly and through third-party distributors.

We have non-exclusive distribution agreements with NEC and Barco that allow us to market digital projectors in North and South America. In connection with the Separation, pursuant to an assignment agreement, the non-exclusive distribution agreements between NEC and FG Group Holdings will be assigned to STS, which will be our wholly owned subsidiary post-Separation. The non-exclusive distribution agreement between NEC and FG Group Holdings requires the consent of NEC in order to be assigned to STS, which we expect we will be able to obtain prior to the offering. The non-exclusive distribution agreement with Barco is between Barco and STS. Recently, we announced that we entered into a preferred commercial relationship with Cinionic, Inc., the world's leading provider of laser cinema solutions, to enhance the services to operators across North America. We believe this relationship enhances our ability to service our valued customers by providing increased access to technology, better training for our technicians and will strengthen our global reach due to closer relationships with their international sales teams.

We provide technical services in the United States and also market and sell our services both directly to theater owners and other entertainment-related markets and through dealers or VAR networks. We anticipate that we will continue to provide these services following the Separation.

**Competition**

There are several other companies that manufacture and distribute projection screens. We believe that our primary competitors in the worldwide projection screen market include Harkness Screens International Ltd., Severtson, Screen Solutions, Spectro, MECHANISCHE Weberei BOHEMIA s.r.o. and Galalite Projection Screens. Competitive factors include product performance characteristics, quality, availability, location/shipping logistics and price.

The market for our other digital cinema equipment and technical services is highly competitive, and the industry is fragmented. The primary competitive factors are price, product quality, features and customer support. Competition in the digital cinema equipment market includes other integrators and resellers. Manufacturers may also sell equipment directly to exhibitors, especially for large orders. We believe that our primary competition for installation, after-sale maintenance, and NOC services is Christie Digital Systems USA, Inc., Moving Image Technologies, Tri-State Digital Services and Sonic Equipment Company. We also compete with in-house technical resources at some of our larger entertainment customers for services work.

**Financial Instruments and Credit Risk Concentrations**

Our top ten customers accounted for approximately 54% and 48% of combined net revenues during the nine months ended September 30, 2022 and September 30, 2021, respectively, and approximately 39% of 2021 combined net revenues. Trade accounts receivable from these customers represented approximately 45% and 29% of net combined receivables at September 30, 2022 and December 31, 2021, respectively. None of our customers accounted for more than 10% of our combined net revenues during the nine months ended September 30, 2022, and none of our customers accounted for more than 10% of our net combined receivables as of September 30, 2022. One of our customers accounted for more than 10% of our combined net revenues during the nine months ended September 30, 2021. None of our customers accounted for more than 10% of both our combined net revenues during 2021 and our net combined receivables as of December 31, 2021.

**Manufacturing**

We manufacture cinema screens through Strong/MDI in Joliette, Quebec, Canada. These manufacturing operations consist of an approximately 80,000 square-foot facility for the manufacture of screen systems. These facilities include PVC welding operations with programmable automations, as well as two 90-foot high screen coating towers with state-of-the-art precision coating application software and painting systems. This world class ISO certified operation has the capability of manufacturing multiple standard screens simultaneously to large format 2D and 3D screens for cinema and special venue applications. This facility will not transfer to us as part of the Separation, but we expect to be able to continue to utilize this facility pursuant to the Joliette Plant Lease. We have also recently established outsourced warehousing and finishing operations in Belgium and China that will allow us to be more responsive to local customer orders in those markets.

**Quality Control**

We believe that our quality control procedures and the quality standards for the products that we manufacture, distribute or service have contributed significantly to our reputation for high performance and reliability. The inspection of incoming materials and components as well as the testing of all of our products during various stages of the sales and service cycle are key elements of this program.

**Trademarks**

We own or otherwise have rights to various trademarks and trade names used in conjunction with the sale of our products. We believe our success will not be dependent upon trademark protection, but rather upon our scientific and engineering capabilities and research and production techniques. We consider the Strong® trademark to be of value to our business.

**Human Capital Resources**

Following the Separation, we anticipate that we will have 166 employees, all of which except one will be full-time employees. Our employees are not party to any collective bargaining agreements.

The Company believes it complies with all applicable state, local and international laws governing nondiscrimination in employment in every location in which the Company operates. All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status. We continue to monitor our demand for skilled and unskilled labor and provide training and competitive compensation packages in an effort to attract and retain skilled employees.

The Company, including its subsidiaries, remains deeply rooted in cinema screen manufacturing and cinema-focused services. In this regard, we continuously drive our efforts to be the best partner for our customers, investment for our shareholders, neighbor in our community and to provide an empowering work environment for our employees.

Moreover, the Company is committed to the health, safety and wellness of its employees. We have modified our business practices and implemented certain policies at our offices in accordance with best practices to accommodate, and at times mandate, social distancing and remote work practices, including restricting employee travel, modifying employee work locations, implementing social distancing and enhanced sanitary measures in our facilities, and cancelling attendance at events and conferences. In addition, we have invested in employee safety equipment, additional cleaning supplies and measures, re-designed production lines and workplaces as necessary and adapted new processes for interactions with our suppliers and customers to safely manage our operations.

**Regulation**

We are subject to complex laws, rules and regulations affecting our domestic and international operations relating to, for example, environmental, safety and health requirements; exports and imports; bribery and corruption; tax; data privacy; labor and employment; competition; and intellectual property ownership and infringement. Compliance with these laws, rules and regulations may be onerous and expensive, and if we fail to comply or if we become subject to enforcement activity, our ability to manufacture our products and operate our business could be restricted and we could be subject to fines, penalties or other legal liability. Furthermore, should these laws, rules and regulations be amended or expanded, or new ones enacted, we could incur materially greater compliance costs or restrictions on our ability to manufacture our products and operate our business.

Some of these complex laws, rules and regulations – for example, those related to environmental, safety and health requirements – may particularly affect us in the jurisdictions in which we manufacture products, especially if such laws and regulations require the use of abatement equipment beyond what we currently employ; require the addition or elimination of a raw material or process to or from our current manufacturing processes; or impose costs, fees or reporting requirements on the direct or indirect use of energy, or of materials or gases used or emitted into the environment, in connection with the manufacture of our products. There can be no assurance that in all instances a substitute for a prohibited raw material or process would be available, or be available at reasonable cost.

**Properties**

Our United States corporate offices are located at 5960 Fairview Road, Suite 275, Charlotte, North Carolina, 28210, where we use office space leased by FG Group Holdings under the Management Services Agreement. FG Group Holdings' existing lease expires in May 2024. In addition, we, our subsidiaries or FG Group Holdings owned or leased the following facilities as of the date hereof:

● Strong/MDI, owns an approximate 80,000 square-foot manufacturing plant in Joliette, Quebec, Canada. The Joliette Plant is used for offices, manufacturing, assembly and distribution of cinema and other screens. We believe this facility is adequate for future needs and we may use a portion of the proceeds from this offering for capital expenditures related to the Joliette Plant. See "Use of Proceeds". We expect to be able to continue to utilize this facility pursuant to the Joliette Plant Lease to be entered into between Strong Entertainment Subco and Strong/MDI.

● STS leases a combined office and warehouse facility in Omaha, Nebraska, which is primarily used for the storage and distribution of third-party products. The lease for this facility expires in February 2027.

We believe these facilities are adequate for future needs. In addition, we do not anticipate any difficulty in retaining occupancy of any leased facilities, either by renewing leases prior to expiration or replacing them with equivalent leased facilities, or purchasing these or other facilities in the future.

**Legal Proceedings**

In the ordinary course of our business operations, we are involved, from time to time, in certain legal disputes. FG Group Holdings is named as a defendant in product liability/personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products previously distributed by the operations of the businesses being transferred to us un the Separation containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to FG Group Holdings. In FG Group Holdings' experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. FG Group Holdings' legal counsel has further indicated to us that FG Group Holdings has not suffered any adverse verdict in a trial court proceeding related to asbestos claims, but has settled several of these lawsuits, and intends to continue to defend these lawsuits. Under the FG Group Holdings Asset Purchase Agreement, we will agree to indemnify FG Group Holdings for future losses, if any related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to us in the Separation, in an aggregate amount not to exceed $250,000 per year, as well as to indemnify FG Group Holdings for all expenses (including legal fees) related to the defense of such claims. When appropriate, FG Group Holdings may settle certain claims from time to time. We do not expect the resolution of these cases to have a material adverse effect on our financial condition, results of operations or cash flows.

**MANAGEMENT**

**Executive Officers, Directors and Director Nominees**

The following table sets forth the names and ages, as of the date of this prospectus, and titles of the individuals who will serve as our executive officers and members of our Board of Directors at the time of the offering.

---

| | | |
|:---|:---|:---|
| Name | Age | Position |
| Mark D. Roberson | 58 | Chief Executive Officer and Director |
| Todd R. Major | 50 | Chief Financial Officer, Secretary and Treasurer |
| Ray F. Boegner | 73 | President |
| D. Kyle Cerminara | 45 | Director and Chairman |
| Richard E. Govignon Jr. | 46 | Director |
| John W. Struble | 46 | Director |
| Marsha G. King | 55 | Director |

---

The following is a summary of the biographical information about our officers and directors.

**Mark D. Roberson,** has been our Chief Executive Officer and a member of our Board of Directors since our inception in November 2021. He has also served as FG Group Holdings' Chief Executive Officer since April 2020 and FG Group Holdings' Executive Vice President, Chief Financial Officer and Treasurer from November 2018 to April 2020. Mr. Roberson brings an extensive background in executive leadership, operations, corporate finance, SEC reporting, treasury, and mergers and acquisitions. He previously served as Chief Operations Officer of Chanticleer Holdings, Inc., a Nasdaq-listed restaurant operating company, from May 2015 to November 2018, and as Chief Executive Officer of PokerTek, Inc., a then Nasdaq-listed gaming technology company, from February 2010 to October 2014 (having served as Acting Chief Executive Officer from May 2009 until February 2010). He also served as Chief Financial Officer and Treasurer of PokerTek, Inc. from October 2007 until October 2014. Mr. Roberson previously held positions at Curtiss-Wright, Inc., a NYSE-listed aerospace and defense contractor, Krispy Kreme Doughnut Corporation, a then NYSE-listed fast-casual restaurant franchisor and operator, and LifeStyle Furnishings International, a $2 billion private equity backed furniture manufacturer. Mr. Roberson is a Certified Public Accountant who started his career with Ernst & Young and PricewaterhouseCoopers. He earned an MBA from Wake Forest University, a B.S. in Accounting from UNC-Greensboro and a B.S. in Economics from Southern Methodist University. He served on the Board of Directors of CynergisTek, Inc. (NYSE American: CTEK), a cybersecurity and information management consulting firm from May 2016 to September 2022, where he chaired the audit committee and was a member of the compensation committee, which be previously chaired. We believe Mr. Roberson is qualified to serve on our Board of Directors because of his extensive experience at FG Group Holdings, as well as his familiarity with the Company as an operating segment of FG Group Holdings, and his operational expertise.

**Todd R. Major,** has been our Chief Financial Officer since our inception in November 2021. He has served as our Secretary and Treasurer since June 2022. He was a member of our Board of Directors from November 2021 to January 2022. He has also served as FG Group Holdings' Chief Financial Officer, Secretary and Treasurer since April 2020 and Senior Vice President, Finance from April 2019 to April 2020. Mr. Major previously served as Senior Director, Financial and SEC Reporting of Bojangles, Inc., a then Nasdaq-listed restaurant operating company and franchisor, from March 2015 to April 2019, as Director, Financial Reporting of Premier, Inc. (Nasdaq: PINC), a healthcare performance improvement company, from September 2014 to February 2015, and as Senior Director, Financial Reporting of Horizon Lines, Inc., a then NYSE-traded transportation and logistics company from November 2006 to September 2014. From June 2003 to November 2006, Mr. Major previously held positions of increasing responsibility at Nabi Biopharmaceuticals, Inc., a then Nasdaq-listed biopharmaceutical company engaged in the development and commercialization of proprietary products. Mr. Major is a Certified Public Accountant and earned an MBA from Queens University of Charlotte and a B.A. in Accounting from Flagler College.

**Ray F. Boegner,** will be our President upon consummation of this offering. He has also served as FG Group Holdings' President of Strong Entertainment; previously Senior Vice President and Senior Vice President of Sales; Vice President of Sales prior to November 1996, and joined FG Group Holdings in 1985.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D. Kyle Cerminara**, has been our Chairman since March 2022. He has also served as a Director of FG Group Holdings since February 2015, and as the Chairman of FG Group Holdings' Board of Directors since May 2015. Mr. Cerminara has over 20 years' experience as an institutional investor, asset manager, director, chief executive, founder and operator of multiple financial services and technology businesses. Mr. Cerminara co-founded Fundamental Global in 2012 and serves as its Chief Executive Officer. Mr. Cerminara is a member of the board of directors of a number of companies focused in the reinsurance, investment management, technology and communication sectors, including FG Financial Group, Inc. (NASDAQ: FGF) (formerly known as 1347 Property Insurance Holdings, Inc.), which operates as a diversified reinsurance and investment management company, since December 2016; BK Technologies Corporation (NYSE American: BKTI), a provider of two-way radio communications equipment, since July 2015; FG Group Holdings, since February 2015; and Firefly Systems Inc., a venture- backed digital advertising company, since August 2020. Mr. Cerminara is President and will serve as a director of FG New America Acquisition II Corp., a special purpose acquisition company currently in the process of completing its initial public offering and which is focused on searching for a target company in the financial services and insurance industries, and he is also the chairperson of the board of directors of FG Acquisition Corp., a Canadian special purpose acquisition company currently in the process of completing its initial public offering and which is focused on searching for a target company in the financial services sector. In addition, Mr. Cerminara has served as a Senior Advisor to FG Merger Corp. (NASDAQ: FGMC), a special purpose acquisition company, since February 2022. Mr. Cerminara was appointed Chairman of FG Financial Group, Inc. in May 2018 and served as its Principal Executive Officer from March 2020 to June 2020. From April 2021 to December 2021, Mr. Cerminara served as a director of Aldel Financial Inc. (NYSE: ADF), a special purpose acquisition company co-sponsored by Fundamental Global, which merged with Hagerty, (NYSE: HGTY) a leading specialty insurance provider focused on the global automotive enthusiast market. From July 2020 to July 2021, Mr. Cerminara served as Director and President of FG New America Acquisition Corp. (NYSE: FGNA), a special purpose acquisition company, which merged with OppFi Inc. (NYSE: OPFI), a leading financial technology platform that powers banks to help everyday consumers gain access to credit. Mr. Cerminara has served as the Chairman of FG Group Holdings since May 2015 and previously served as its Chief Executive Officer from November 2015 through April 2020. Mr. Cerminara has served as the Chairman of BK Technologies Corporation since July 2022 and was previously Chairman from March 2017 until April 2020. He served on the board of directors of GreenFirst Forest Products Inc. (TSXV: GFP) (formerly Itasca Capital Ltd.), a public company focused on investments in the forest products industry, from June 2016 to October 2021 and was appointed Chairman from June 2018 to June 2021; Limbach Holdings, Inc. (NASDAQ: LMB), a company which provides building infrastructure services, from March 2019 to March 2020; Iteris, Inc. (NASDAQ: ITI), a publicly-traded, applied informatics company, from August 2016 to November 2017; Magnetek, Inc., a publicly-traded manufacturer, in 2015; and blueharbor bank, a community bank, from October 2013 to January 2020. He served as a Trustee and President of StrongVest ETF Trust, which was an open-end management investment company, from July 2016 to March 2021. Previously, Mr. Cerminara served as the Co-Chief Investment Officer of CWA Asset Management Group, LLC, a position he held from January 2013 to December 2020. Prior to these roles, Mr. Cerminara was a Portfolio Manager at Sigma Capital Management, an independent financial adviser, from 2011 to 2012, a Director and Sector Head of the Financials Industry at Highside Capital Management from 2009 to 2011, and a Portfolio Manager and Director at CR Intrinsic Investors from 2007 to 2009. Before joining CR Intrinsic Investors, Mr. Cerminara was a Vice President, Associate Portfolio Manager and Analyst at T. Rowe Price (NASDAQ: TROW) from 2001 to 2007, where he was named amongst Institutional Investor's Best of the Buy Side Analysts in November 2006, and an Analyst at Legg Mason from 2000 to 2001. Mr. Cerminara received an MBA degree from the Darden Graduate School of Business at the University of Virginia and a B.S. in Finance and Accounting from the Smith School of Business at the University of Maryland, where he was a member of Omicron Delta Kappa, an NCAA Academic All American and Co-Captain of the men's varsity tennis team. He also completed a China Executive Residency at the Cheung Kong Graduate School of Business in Beijing, China. Mr. Cerminara holds the Chartered Financial Analyst (CFA) designation. We believe Mr. Cerminara is qualified to serve as our Chairman because of his extensive experience at FG Group Holdings, as well as his familiarity with the Company as an operating segment of FG Group Holdings, and his operational expertise.

**Richard E. Govignon Jr.** has been a member of our Board of Directors since January 2022. Dr. Govignon has years of experience as a corporate director/trustee in both the U.S. and Canada and has been an investor in numerous businesses and partnerships across a wide range of industries. Dr. Govignon has been a partner at Dnerus Financial since June 2021. He has served as a Director of FG Financial Group, Inc. (formerly 1347 Property Insurance Holdings, Inc.) (NASDAQ: FGF) since December 2021 and is a member of their audit committee. Dr. Govignon was a member of the board of directors of GreenFirst Forest Products, Inc. (TSXV: GFP) (formerly Itasca Capital Ltd.), a public company focused on investments in the forest products industry since December 2019. Dr. Govignon is also a member of the board of directors of B-Scada, Inc. (OTC: SCDA), a company that is in the business of developing software and hardware products. Previously, Dr. Govignon served as a trustee of the StrongVest ETF Trust from 2017 to 2019. Dr. Govignon has worked in the healthcare and pharmaceutical industry in various management and pharmacy positions for over 20 years, most recently with CVS Health Corporation since 2019, and from 2013 to 2017, and previously with Acme Markets Inc. from 2017 to 2019 and Rite Aid Corporation from 2000 to 2013. Dr. Govignon received a Doctor of Pharmacy from the University of the Sciences in Philadelphia and a Bachelor of Science in Pharmacy from the University of the Sciences in Philadelphia. We believe Dr. Govignon is qualified to serve on our Board of Directors because of his experience as a corporate director and his extensive business knowledge across different industries.

**John W. Struble** has been a member of our Board of Directors since January 2022. Mr. Struble currently serves as the Chief Financial Officer of Artisanal Brewing Ventures ("ABV"), a private equity owned company based in Charlotte, NC. ABV is an umbrella company of like-minded craft beverage companies including Sothern Tier Brewing, Sothern Tier Distilling, Victory Brewing, Bold Rock Cider and Sixpoint Brewing. From March 2020 to November 2020, Mr. Struble worked at Fundamental Global Management, LLC, an affiliate of Fundamental Global, which provides services related to the day-to-day management of certain Fundamental Global's portfolio companies and affiliates. Mr. Struble was appointed to the board of directors of BK Technologies Inc. (NYSE: BKTT) in March 2017 where he served as Chairman of the Board until December 2021. From December 2013 to March 2020, Mr. Struble served as Chief Financial Officer of Intra Pac International LLC, a specialty packaging manufacturing company owned by private equity investment firm Onex Corporation (TSX: ONEX), where he was responsible for the finance, information technology and human resources functions. From May 2010 to May 2012, he served as Corporate Controller (Operations) of Euramax International, Inc., where he was responsible for the accounting and finance functions for the North American operations. Euramax is a public company that produces aluminium, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors, and home centers in North America and Europe. Prior to that, he was a controller of Rock-Tenn Company, from December 2008 to February 2010. Mr. Struble is a Certified Public Accountant. He received an MBA from the University of Georgia and a B.S. in Business Administration from the State University of New York at Buffalo. We believe Mr. Struble is qualified to serve on our Board of Directors because of his previous board experience and his financial expertise.

**Marsha G. King, PhD** has been a member of our Board of Directors since January 2022. Dr. King has served as the President/Founder for Polaris Leadership Consulting since April 2021. Since April 2022, Dr. King has served as a director of Vend Tech International, Inc., a privately held vending machine company. Dr. King was also a director of FG Financial Group, Inc. (formerly 1347 Property Insurance Holdings, Inc. until November 2020) (NASDAQ: FGF) where she was a member of the Compensation Committee from January 2019 until December 2021. Dr. King has also served as President/Owner for SkillPoint Consulting, Inc., where she consulted with executives to improve their overall business and leadership performance, from January 2007 to April 2021. Dr. King has also taught as an adjunct professor at Northwestern University, The George Washington University, The Pennsylvania State University, Johns Hopkins University, Georgetown University and the University at Buffalo. Prior to joining SkillPoint Consulting Inc., Dr. King worked at Capital One Financial Corporation from September 1999 to January 2007, where she served as director of leadership acceleration before being promoted to Managing Vice President, Human Resources in October 2002. Prior to that, Dr. King served as an executive coach at Development Dimensions International, Inc., a global human resource consulting firm, from August 1998 to September 1999. Dr. King received a Bachelor of Science in Business Administration from The Ohio State University and a Master of Education in Instructional Systems Design/Multimedia and Ph.D. in Organizational Development from The Pennsylvania State University. We believe Dr. King is qualified to serve on our Board of Directors based on her perspective and experience consulting and providing executive leadership.

**Director Independence and Controlled Company Exception**

After the completion of this offering, FG Group Holdings will continue to indirectly hold more than a majority of the voting power of our Common Shares eligible to vote in the election of our directors. As a result, we will be a "controlled company" within the meaning of the NYSE American corporate governance standards. Under these NYSE American corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance standards, including the requirements (1) that a majority of our Board of Directors consist of independent directors, (2) that our Board of Directors have a Compensation Committee that is comprised entirely of independent directors with a written charter addressing the committee's purpose and responsibilities and (3) that our Board of Directors have a Nominating and Corporate Governance Committee that is comprised entirely of independent directors with a written charter addressing the committee's purpose and responsibilities. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of these corporate governance requirements. In the event that we cease to be a "controlled company" and our Common Shares continue to be listed on NYSE American, we will be required to comply with these provisions within the applicable transition periods.

**Board of Directors**

Our business and affairs are managed under the direction of our Board of Directors. Our Articles, as amended, provide that the total number of directors on our Board of Directors shall be fixed from time to time, by ordinary resolution of the Shareholders. Contemporaneously with this offering, our board will be composed of five directors. Our officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors, rather than for specific terms of office.

**Audit Committee**

Prior to the consummation of this offering and the listing of our Common Shares, our Audit Committee of the Board of Directors (the "Audit Committee") will consist of Richard E. Govignon Jr., John W. Struble and Marsha G. King, each of whom is independent for purposes of serving on the Audit Committee under the SEC's rules and NYSE American's listing requirements. All Audit Committee members are financially literate. The Board of Directors has determined that John W. Struble is an "Audit Committee Financial Expert" as defined by Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act. We anticipate John W. Struble will serve as the Chairperson of the Audit Committee. We intend to comply with the independence requirements for all members of the Audit Committee within the time periods specified under NYSE American's rules. We will adopt, effective prior to the listing of our Common Shares, an audit committee charter, detailing the principal functions of the Audit Committee. The Audit Committee will assist the Board of Directors in fulfilling its responsibilities for oversight of the quality and integrity of the accounting, internal controls, and reporting practices of the Company, and perform such other duties as are directed by the Board of Directors. The Audit Committee's role will include a particular focus on the qualitative aspects of financial reporting to shareholders, and on the Company's processes to manage business and financial risk, and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee's responsibilities will include, among other things, reviewing policies and procedures regarding transactions, and reviewing and overseeing the transactions, between the Company and officers, directors and other related parties that are not a normal part of the Company's business, and overseeing compliance with the Company's code of business conduct and ethics (the "Code of Ethics") and considering conflicts of interest. Annually and on a quarterly basis, the Audit Committee will review and discuss matters separately with management of the Company and with the Company's independent registered public accounting firm. The Audit Committee will provide a report in the annual proxy that includes the Audit Committee's review and discussion of matters with management and the independent public accounting firm.

The Audit Committee will also conduct periodic oversight of the Company's risk management, including regularly reviewing the Company's cybersecurity and other information technology risks, controls and procedures and the Company's plans to mitigate cybersecurity risks and to respond to data breaches.

The Audit Committee will be directly responsible for the appointment of the independent registered public accounting firm engaged to prepare and issue an audit report on the financial statements of the Company and will periodically review and evaluate such firm's performance and independence from management. All audit and permitted non-audit services will be pre-approved by the Audit Committee. The Audit Committee may delegate the responsibility of approving proposed non-audit services that arise between Audit Committee meetings to the Audit Committee chairperson, provided that the decision to approve the services is presented for ratification at the next scheduled Audit Committee meeting. The Audit Committee will meet with management and the independent registered public accounting firm to review and discuss earnings press releases and our policies with respect to release of financial information and earnings guidance to be provided to analysts and rating agencies.

**Compensation Committee**

Our compensation committee of the Board of Directors (the "Compensation Committee") consists of Richard E. Govignon Jr., John W. Struble and Marsha G. King, each of whom is independent for purposes of serving on the Compensation Committee under the SEC's rules and NYSE American's listing requirements. Marsha G. King serves as the Chairperson of the Compensation Committee. We have adopted a Compensation Committee charter, detailing the principal functions of the Compensation Committee. The Compensation Committee is responsible for establishing policies with respect to the compensation of the Company's officers and has overall responsibilities for approving and evaluating officer compensation plans, policies and programs of the Company. The Compensation Committee's functions include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Determining the compensation of the Chief Executive Officer, and overseeing all other executive officers' compensation, including salary and payments under the Company's incentive compensation and equity-based plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Administering the Company's stock compensation plans, including approving all individual grants and awards under these plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Reviewing compensation for non-employee directors and recommending changes to the Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Reviewing and discussing with management the compensation discussion and analysis to be included in our annual meeting proxy statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Reviewing and monitoring matters related to human capital management, including talent acquisition, development and retention, internal pay equity, diversity and inclusion, and corporate culture; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Conducting an annual risk assessment to ensure that the Company's executive compensation plans and programs do not promote the assumption of excessive risk and remain consistent with the approved overall compensation philosophy and strategy.

The Compensation Committee has the sole authority to retain and to terminate any compensation consultant, legal counsel or financial or other advisor to be used to assist in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of the Company in advance, and has the sole authority to approve the compensation advisor's fees and other retention terms. The Compensation Committee is responsible for annually reviewing an assessment of any potential conflict of interest raised by the work of a compensation consultant (and other compensation advisor, as required) that is involved in determining or recommending executive and/or director compensation. The Compensation Committee is permitted to delegate its authority to a subcommittee of its members. The Compensation Committee will annually review and reassess the adequacy of its charter and performance and will recommend any proposed changes to the Board for approval.

**Nominating and Corporate Governance Committee**

Prior to the consummation of this offering and the listing of our Common Shares, our Nominating and Corporate Governance Committee of the Board of Directors (the "Nominating and Corporate Governance Committee") will consist of Richard E. Govignon Jr., John W. Struble and Marsha G. King, each of whom is independent for purposes of serving on the Nominating and Corporate Governance Committee under the SEC's rules and NYSE American's listing requirements. We anticipate Richard E. Govignon Jr. will serve as the Chairperson of the Nominating and Corporate Governance Committee. We will adopt effective prior to the listing of our Common Shares, a Nominating and Corporate Governance Committee charter, detailing the principal functions of the Nominating and Corporate Governance Committee. The functions of the Nominating and Corporate Governance Committee will include, among other items, overseeing all aspects of the Company's corporate governance functions, including compliance with significant legal, ethical and regulatory requirements. The Nominating and Corporate Governance Committee's functions will include, but not be limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Overseeing the annual review of the effectiveness of the Board of Directors and its committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Administrating a director orientation program for all newly-elected or appointed members of the Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Recommending the assignment of directors to the various committees of the Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Evaluating emergent Environmental, Social, and Governance ("ESG") related risks and the Company's ESG goals, and reviewing and discussing with management strategies, activities, and policies regarding ESG-related matters and making recommendations to the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Reviewing and assessing shareholder proposals submitted to the Company for inclusion in the Company's proxy statement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Periodically reviewing the Company's corporate governance policies and practices and recommending changes to the Board of Directors when appropriate in light of the Company's position, developments in laws and regulations applicable to the Company, and corporate governance trends and practices.

The Nominating and Corporate Governance Committee will also report to, and assist, the Board of Directors in identifying individuals for membership on the Board of Directors and recommend to the Board of Directors the director nominees for the Company's annual meeting of shareholders.

**Indemnification of Directors and Officers**

The corporate laws of British Columbia allow us, and our corporate Articles, as amended, require us (subject to the provisions of the BCBCA noted below), to indemnify our directors, former directors, alternate directors and their heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in our Articles, as amended.

For the purposes of such an indemnification:

○ "eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding; and

○ "eligible proceeding" means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternative director of the Company (an "eligible person") or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternative director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is
 or may be joined as a party, or

(2) is
 or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding.

In addition, under the BCBCA, the Company may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding, provided that the Company first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the restrictions noted below, the eligible party will repay the amounts advanced.

Notwithstanding the provisions of the Company's Articles, as amended, noted above, under the BCBCA the Company must not indemnify an eligible party or pay the expenses of an eligible party, if any of the following circumstances apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the company was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the company is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful.

In addition, if an eligible proceeding is brought against an eligible party by or on behalf of the Company or by or on behalf of an associated corporation, the Company must not do either of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) indemnify the eligible party under section 160(a) of the BCBCA in respect of the proceeding; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) pay the expenses of the eligible party in respect of the proceeding.

Notwithstanding any of the foregoing, and whether or not payment of expenses or indemnification has been sought, authorized or declined under the BCBCA or the Articles of the Company, as amended, on the application of the Company or an eligible party, the Supreme Court of British Columbia may do one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) order a company to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) order a company to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) order the enforcement of, or any payment under, an agreement of indemnification entered into by a company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) order a company to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) make any other order the court considers appropriate.

We intend to enter into indemnification agreements with each of our directors prior to the completion of this offering. The indemnification agreements will provide the directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the Articles of the Company, as amended, and the BCBCA, subject to certain exceptions contained in those agreements.

**Code of Business Conduct and Ethics** 

In connection with this offering, our Board of Directors will adopt a Code of Ethics that applies to all of our employees, officers and directors, including our executive and senior financial officers. Prior to the listing of our Common Shares, the full text of our Code of Ethics will be posted on the investor relations section of our website. We intend to disclose future amendments to our Code of Ethics, or any waivers of such code, on our website or in public filings.

**Compensation and Organization Committee Interlocks and Insider Participation** 

None of our executive officers has served as a member of a compensation committee (or if no committee performs that function, the Board of Directors) of any other entity that has an executive officer serving as a member of our Board of Directors.

**Policy for Approval of Related Person Transaction** 

Our Code of Ethics that our Board of Directors will adopt in connection with this offering requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except in accordance with the approval process and guidelines included in the Code of Ethics. Under our Code of Ethics, a "conflict of interest" arises when an individual's personal interest interferes or appears to interfere with our interests. Prior to the listing of our Common Shares, the full text of our Code of Ethics will be posted on the investor relations section of our website.

In addition, the Audit Committee of our Board of Directors will adopt a charter, pursuant to which the audit committee will review policies and procedures regarding transactions, and review and oversee the transactions, between us and officers, directors and other related parties that are not a normal part of our business. If the Board of Directors creates a special committee in connection with such a transaction or holds a meeting of the non-interested directors of the Board to approve such transaction, the Audit Committee will not be required to consider such transaction or assess conflicts of interest in connection with such transaction.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

The transactions described in the section "*Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings*" (collectively, the "FG Group Holdings Contemplated Transactions") will be entered into prior to the adoption of our related person transaction approval policy and therefore will not be approved under the policy. In addition, following the completion of this offering, (i) amendments, modifications, terminations, extensions, or exercises of discretion outside the ordinary course of business, with respect to the agreements constituting FG Group Holdings Contemplated Transactions, (ii) negotiation, execution, modification, termination or extension, or exercises of discretion outside the ordinary course of business, with respect to any new agreements with FG Group Holdings ("New Agreements") and (iii) the assertion, handling or resolution of any disputes arising under the agreements related to the FG Group Holdings Contemplated Transactions or any New Agreements, in each case involving amounts that will or may be expected to exceed $120,000, will be reviewed and approved by our directors that are unaffiliated with FG Group Holdings. Any executive officer of the Company who is also an officer, director or employee of FG Group Holdings may participate in these activities provided that he or she does so solely on behalf of the Company and under the direction of, and subject to the approval of, our independent directors that are unaffiliated with FG Group Holdings. Any director of the Company who is also an officer, director or other affiliate of FG Group Holdings may participate in these activities provided that he or she does so solely on behalf of FG Group Holdings or its affiliates, as applicable, and provided that our independent directors have received advance notice of his or her participation.

**EXECUTIVE AND DIRECTOR COMPENSATION**

We are a newly formed company, and as discussed in more detail elsewhere, prior to the Separation, FG Group Holdings, our ultimate parent and majority shareholder, has operated the Entertainment Business. Our compensation committee is expected to begin meeting before the completion of the Separation, including to review and approve the employment agreements of our executive officers. As a result, we have set forth below the compensation of those individuals who are expected to be designated as our executive officers. In compliance with SEC rules, the information included in this section is historical, as applicable.

For purposes of the following compensation discussion and analysis, and the tabular executive compensation disclosures that follow, the individuals listed below are referred to collectively as the "Named Executive Officers" or ("NEOs"). These include:

● Mark D. Roberson, Chief Executive Officer;

● Todd R. Major, Chief Financial Officer, Secretary and Treasurer; and

● Ray F. Boegner, President upon consummation of this offering.

**Executive Compensation Tables**

The following table sets forth information regarding all forms of compensation earned by the NEOs during the last two fiscal years as employees of FG Group Holdings. Messrs. Roberson, Major and Boegner were employed by FG Group Holdings during all of fiscal 2022 and 2021. Mr. Roberson served as Chief Financial Officer of FG Group Holdings from November 16, 2018 to April 13, 2020, and was appointed as FG Group Holdings' Chief Executive Officer on April 13, 2020. Mr. Major served as Senior Vice President, Finance from April 8, 2019 to April 13, 2020, and was appointed as FG Group Holdings' Chief Financial Officer on April 13, 2020.

The Compensation Committee of the Company intends to approve new employment and compensatory arrangements between the Company and its executives that will be effective at the completion of the offering (refer to the Employment Agreements section below). Accordingly, the amounts reflected below as historical compensation for FG Group Holdings are presented for historical reference only and may not be indicative of the level of compensation for the Company in the future.

**2022** **and 2021 Summary Compensation Table**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary ($)** | **Bonus ($)<sup>(3)</sup>** | **Stock Awards ($)<sup>(4)</sup>** | **Option Awards ($)<sup>(4)</sup>** | **Non-Equity Incentive Plan Compensation ($)** | **All Other Compensation ($)<sup>(5)</sup>** | **Total ($)** |
| Mark D. Roberson <sup>(1)</sup> | 2022 | 295000 |  | – |  | – | 9210 | 304210 |
| *CEO* | 2021 | 265577 | 262500 | – |  | – | 9821 | 537898 |
| Todd R. Major <sup>(2)</sup> | 2022 | 230000 |  | – |  | – | 8816 | 238816 |
| *CFO* | 2021 | 210385 | 112500 | – |  | – | 8227 | 331112 |
| Ray F. Boegner<br> *FG Group Holdings' President of* | 2022 | 275000 |  | – |  | – | 9913 | 284913 |
| *Strong Entertainment* | 2021 | 275000 |  | – |  | – | 9913 | 284913 |

---

(1) Mr.
 Roberson served as FG Group Holdings' Executive Vice President and Chief Financial Officer from November 16, 2018, to
 April 13, 2020, and was appointed as FG Group Holdings' Chief Executive Officer effective April 13, 2020.

(2) Mr.
 Major served as FG Group Holdings' Senior Vice President, Finance from April 8, 2019, to April 13, 2020, and was appointed
 as FG Group Holdings' Chief Financial Officer effective April 13, 2020.

(3) In
 March 2021, FG Group Holdings' Compensation Committee approved the payment of transaction-related bonuses to Messrs.
 Roberson and Major for extra time and effort given by such employees in connection with the successful completion of the sale of
 a portion of FG Group Holdings' operating business unrelated to the Entertainment Business.

(4) The
 amounts in these columns represent the aggregate grant date fair value calculated in accordance with the Financial Accounting Standards
 Board Accounting Standards Codification Topic 718. For additional information relating to the assumptions made in valuing and expensing
 these awards refer to Note 13 in FG Group Holdings' December 31, 2021 consolidated financial statements included
 in FG Group Holdings' 2021 Annual Report on Form 10-K, as filed with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;(5) FG
 Group Holdings provides its executives with certain employee benefits. These benefits
 include excess life and disability insurance and contributions made by FG Group Holdings
 under the 401(k) Plan. The amounts reported for each NEO as All Other Compensation for
 2022 are identified and quantified below.

---

| | | | |
|:---|:---|:---|:---|
|  | **Mr. Roberson** | **Mr. Major** | **Mr. Boegner** |
| Employer match on 401(k) Plan | $7294 | $6900 | $8250 |
| Excess life and disability insurance | 1916 | 1916 | 1663 |
| Total All Other Compensation | $9210 | $8816 | $9913 |

---

The following table sets forth information concerning outstanding equity awards of FG Group Holdings for each of the NEOs as of the end of the fiscal year ended December 31, 2022.

The Compensation Committee of the Company will approve the grant of new equity grants by the Company to be awarded to its executives effective at the closing of this offering. Accordingly, the amounts reflected below for FG Group Holdings are presented for historical reference only and are not indicative of the level of equity awards for the Company in the future.

**Outstanding Equity Awards at 2022 Fiscal Year-End**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Stock Awards** | **Stock Awards** |
| <br>**Name** | **Number of Securities Underlying Unexercised Options (#) Exercisable** | **Number of Securities Underlying Unexercised Options (#) Unexercisable** | **Option Exercise Price ($)** | **Option Expiration Date** | **Number of Shares or Units of Stock That Have Not Vested (#)** | **Market Value of Shares or Units of Stock That Have Not Vested ($)(\*)** |
| Mark D. Roberson | 32000 | 8000<sup>(1)</sup> | 2.25 | 12/4/2028 |  |  |
|  | 18000 | 12000<sup>(2)</sup> | 2.89 | 6/6/2029 |  |  |
|  | 8000 | 12000<sup>(3)</sup> | 1.60 | 10/9/2030 |  |  |
|  |  |  |  |  | 26667<sup>(8)</sup> | 69868 |
| Todd R. Major | 4000 | 6000<sup>(3)</sup> | 1.60 | 10/9/2030 |  |  |
|  |  |  |  |  | 6667<sup>(8)</sup> | 17468 |
| Ray F. Boegner | 5000 | —<sup>(5)</sup> | 4.70 | 1/11/2022 |  |  |
|  | 32000 | —<sup>(6)</sup> | 4.33 | 11/22/2025 |  |  |
|  | 40000 | — <br><sup>(7)</sup> | 6.50 | 2/28/2027 |  |  |
|  | 40000 | 10000<sup>(4)</sup> | 4.70 | 1/26/2028 |  |  |
|  | 12000 | 8000<sup>(2)</sup> | 2.89 | 6/6/2029 |  |  |
|  | 6000 | 9000<sup>(3)</sup> | 1.60 | 10/9/2030 |  |  |
|  |  |  |  |  | 10000<sup>(8)</sup> | 26200 |

---

\* Based on the closing stock price of FG Group Holdings' common stock of $2.62 on December 31, 2022, the last trading day of the 2022 fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;(1) The 40,000 stock options granted to Mr. Roberson on December 4, 2018,
 pursuant to FG Group Holdings' 2017 Omnibus Equity Compensation Plan become exercisable in five equal annual installments
 beginning on December 4, 2019, and thereafter on December 4 of each year through 2023.

(2) The 30,000 and 20,000 stock options granted to Messrs. Roberson and
 Boegner, respectively, on June 6, 2019, pursuant to FG Group Holdings' 2017 Omnibus Equity Compensation Plan become
 exercisable in five equal annual installments beginning on June 6, 2020, and thereafter on June 6 of each year through 2024.

(3) The 20,000, 10,000 and 15,000 stock options granted to Messrs. Roberson,
 Major and Boegner, respectively, on October 9, 2020, pursuant to FG Group Holdings' 2017 Omnibus Equity Compensation
 Plan become exercisable in five equal annual installments beginning on October 9, 2021, and thereafter on October 9 of each year
 through 2025.

(4) The 50,000 stock options granted to Mr. Boegner on January 26, 2018,
 pursuant to FG Group Holdings' 2017 Omnibus Equity Compensation Plan become exercisable in five equal annual installments
 beginning on January 26, 2019, and thereafter on January 26 of each year through 2023.

(5) The 30,000 stock options granted to Mr. Boegner on January 11, 2012,
 pursuant to FG Group Holdings' 2010 Long-Term Incentive Plan became exercisable in four equal installments beginning
 on January 11, 2013, and thereafter on January 11 of each year through 2016. On both August 11, 2016, and August 30, 2016, Mr. Boegner
 exercised options from this grant to acquire 5,000 shares of FG Group Holdings' common stock. On June 8, 2017, Mr. Boegner
 exercised options from this grant to acquire 7,000 shares of FG Group Holdings' common stock. On August 10, 2017, Mr.
 Boegner exercised options from this grant to acquire 8,000 shares of FG Group Holdings' common stock.

(6) The 40,000 stock options granted to Mr. Boegner on November 22, 2015, pursuant to FG Group Holdings' 2010 Long-Term Incentive Plan became exercisable in five equal annual installments beginning on November 22, 2016, and thereafter on November 22 of each year through 2020. On November 23, 2016, Mr. Boegner exercised options from this grant to acquire 8,000 shares of FG Group Holdings' common stock at an exercise price of $4.33 per share.

(7) The 40,000 stock options granted to Mr. Boegner on February 28, 2017, pursuant to FG Group Holdings' 2010 Long-Term Incentive Plan became exercisable in five equal annual installments beginning on February 28, 2018, and thereafter on February 28 of each year through 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(8) Represents RSUs to be settled in
 shares of FG Group Holdings' common stock on a one-for-one basis as soon as practicable
 following the applicable vesting date. The RSUs vest on October 9, 2023.

**Director Compensation**

Following this offering, we expect to pay our directors as follows:

● Our
 Chairman will be entitled to receive an annual cash retainer of $45,000, paid in quarterly installments, and each other non-employee director will be entitled to receive an annual cash retainer of $25,000, paid in quarterly installments;

● The
 chairperson of the Audit Committee will be entitled to receive an additional annual cash retainer of $10,000, paid in quarterly
 installments;

● The
 chairperson of the Compensation Committee as well as the chairperson of the Nominating and Corporate Governance Committee will each
 be entitled to receive an additional cash retainer of $5,000, paid in quarterly installments;

● Each
 non-employee director will receive an annual grant of RSUs with a value of $25,000, vesting on the first anniversary
 of the grant date, with the first grant to be made upon the completion of this offering, provided that, if the director makes
 himself available and consents to be nominated by the Company for continued service as a director of the Company, but is not nominated
 to the Board of Directors for election by stockholders, other than for good reason as determined by the Board of Directors in its
 discretion, then the RSUs will vest in full as of the director's last date of service as a director of the Company;

● Upon the completion of this offering, our Chairman will
 receive 30,000 RSUs and each other non-employee director will receive 20,000 RSUs, pursuant to the Share Compensation Plan (as defined
 below). These RSUs will vest immediately; and

● Each
 non-employee director receives reimbursement for reasonable out-of-pocket expenses for attending meetings of the Board of Directors
 and its committees.

There will also be limit on the amount of compensation payable to our non-employee directors. Specifically, the aggregate grant date fair value of all awards granted to any single non-employee director during any single calendar year (determined as of the applicable grant date(s) under applicable financial accounting rules), when taken together with any cash fees paid to the non-employee director during the same calendar year, may not exceed $200,000.

In addition, we expect to reimburse all directors for reasonable expenses incurred in attending meetings of the Board or any of its committees.

**Employment Agreements**

In connection with this offering, we, through STS, will enter into new employment and compensation arrangements with Messrs. Roberson and Major, separate from their employment agreements with FG Group Holdings, and effective as of the consummation of this offering, that include base salaries and bonus arrangements, subject in each case to the approval of the Compensation Committee of the Board of Directors. Similarly, we, through STS, will enter into a new employment agreement with Mr. Boegner, who will no longer be an employee of FG Group Holdings, effective as of the consummation of this offering, that will similarly include a base salary and bonus arrangements.

During the employment term, Messrs. Roberson, Major and Boegner will also be entitled to receive any other benefits which are provided to our other full-time employees in accordance with our policies and practices, including any that may be provided to personnel under the Management Services Agreement, and subject to satisfaction of any applicable conditions of eligibility.

The material provisions of these employment agreements are discussed below.

Mr. Roberson's employment agreement with the Company, to be effective as of the Separation, provides for an annual base salary of $275,000, subject to annual review and adjustment, and he is eligible for performance-based compensation in the form of an annual bonus targeted at 75% of base salary, payable in a combination of cash and equity, as determined by the Compensation Committee. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Compensation Committee. Mr. Roberson will also be entitled to receive a cash bonus of up to $200,000, payable at the discretion of the Compensation Committee of the Board of Directors. Mr. Roberson is also eligible to participate in the Company's 401(k), medical, dental and vision plans and certain other benefits available generally to employees of the Company. The employment agreement also contains customary non-competition and non-solicitation covenants. In the event Mr. Roberson is terminated without cause (as defined in Mr. Roberson's employment agreement), and provided he enters into a general release in favor of the Company and related parties, he will be entitled to severance equal to one year of his base salary and twelve (12) months of Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") premiums.

Mr. Major's employment agreement with the Company, to be effective as of the Separation, provides for an annual base salary of $225,000, subject to annual review and adjustment, and he is eligible for performance-based compensation in the form of an annual bonus targeted at 50% of base salary, payable in a combination in cash and equity, as determined by the Chief Executive Officer and the Compensation Committee. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Chief Executive Officer and the Compensation Committee. Mr. Major will also be entitled to receive a cash bonus of up to $150,000, payable at the discretion of the Compensation Committee of the Board of Directors. Mr. Major is also eligible to participate in the Company's 401(k), medical, dental and vision plans and certain other benefits available generally to employees of the Company. The employment agreement also contains customary non-competition and non-solicitation covenants. In the event Mr. Major is terminated without cause (as defined in Mr. Major's employment agreement), and provided he enters into a general release in favor of the Company and related parties, he will be entitled to severance equal to one year of his base salary and twelve (12) months of COBRA premiums.

Mr. Boegner's employment agreement with the Company, to be effective as of the Separation, provides for an annual base salary of $275,000, subject to annual review and adjustment, and he is eligible for performance-based compensation in the form of an annual bonus targeted at 50% of base salary, payable in a combination in cash and equity, as determined by the Chief Executive Officer and the Compensation Committee. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Chief Executive Officer and the Compensation Committee. Mr. Boegner will also be entitled to receive a cash bonus of up to $50,000, payable at the discretion of the Compensation Committee of the Board of Directors. Mr. Boegner is also eligible to participate in the Company's 401(k), medical, dental and vision plans and certain other benefits available generally to employees of the Company. The employment agreement also contains customary non-competition and non-solicitation covenants. In the event Mr. Boegner is terminated without cause (as defined in Mr. Boegner's employment agreement), and provided he enters into a general release in favor of the Company and related parties, he will be entitled to severance equal to one hundred and eight (108) weeks of his base salary and the COBRA premiums for the less of (i) a period of one hundred and eight (108) weeks or (ii) the period which he is eligible to receive continuation coverage under COBRA (or applicable analogous state law).

**Long-Term Incentives**

The Company uses long-term incentive equity awards as a part of our executive compensation program, in order to incentivize and reward the achievement of longer-term strategic objectives and align the financial interests of the Company's executive officers with those of the Company's stockholders. The Company's long-term incentive program for its named executive officers may include restricted stock units and nonqualified stock options. Each such type of award, and the reasons it is used, is described below.

***Restricted Stock Units***. RSUs represent a right to receive a specific number of units at the end of the specified period. Each recipient of RSUs has no rights as a stockholder through such RSUs during the restriction period of the RSUs. Settlement of an RSU award is made in cash, shares of stock or some combination thereof, as specified in the applicable award agreement. RSUs are designed to provide retention incentives to our executive officers and key employees.

***Nonqualified Stock Options***. Nonqualified stock options represent an option to purchase the Company's Common Shares at an option price equal to the closing price on the NYSE American of the Company's Common Shares on the grant date. The stock options are designed to motivate executives to increase stockholder value as the stock options will only have value if our stockholders also benefit from increasing stock prices.

*Equity Grants*

Upon the completion of this offering, our officers Messrs. Roberson, Major and Boegner will receive 60,000, 50,000 and 50,000 RSUs, respectively, pursuant to the Share Compensation Plan (as defined below). One-half of the RSUs granted to Messrs. Roberson, Major and Boegner will vest immediately. The other half of the RSUs granted to Messrs. Roberson, Major and Boegner will vest in one-third annual installments, beginning on the first anniversary of the grant date, subject to continued employment.

In addition, upon the completion of this offering, our Chairman will receive 30,000 RSUs and each other non-employee director will receive 20,000 RSUs, pursuant to the Share Compensation Plan (as defined below). These RSUs will vest immediately.

Each non-employee director will receive an annual grant of RSUs with a value of $25,000, vesting on the first anniversary of the grant date, with the first grant to be made upon the completion of this offering, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director of the Company, but is not nominated to the Board of Directors for election by stockholders, other than for good reason as determined by the Board of Directors in its discretion, then the RSUs will vest in full as of the director's last date of service as a director of the Company.

**Employee Benefit Plans** 

Employees of Strong Global Entertainment will continue to participate in FG Group Holdings' plans after the initial public offering and awards granted under FG Group Holdings' plans will continue to vest.

**2023** **Share Compensation Plan**

On or prior to the consummation of this offering, our Board of Directors and shareholders will adopt and approve the 2023 Share Compensation Plan (the "Share Compensation Plan"). The aggregate number of Common Shares of the Company reserved and available for grant and issuance pursuant to RSUs, and Options granted under the Share Compensation Plan, shall be 2,000,000 Common Shares.

The Share Compensation Plan provides that participants (each, a "Participant"), who include participants who are citizens or residents of the United States, with the opportunity, through RSUs and options, to acquire an ownership interest in the Company. The RSUs will rise and fall in value based on the value of the Common Shares. Unlike the Options, the RSUs will not require the payment of any monetary consideration to the Company. Instead, each RSU represents a right to receive one Common Share following the attainment of any vesting criteria determined at the time of the award. The Options, on the other hand, are rights to acquire Common Shares upon payment of monetary consideration (i.e., the exercise price), subject also to any vesting criteria determined at the time of the grant.

The following is a summary of the Share Compensation Plan.

*Purpose of the Share Compensation Plan*

The purpose of the Share Compensation Plan is to advance the interests of the Company and its subsidiaries, and its shareholders by: (a) ensuring that the interests of Participants are aligned with the success of the Company and its subsidiaries; (b) encouraging stock ownership by such persons; and (c) providing compensation opportunities to attract, retain and motivate such persons.

The following people will be eligible to participate in the Share Compensation Plan: any officer or employee of the Company or any officer or employee of any subsidiary of the Company and, any director of the Company or any director of any subsidiary of the Company, and any Consultant (defined under the Share Compensation Plan as an individual (other than an employee or a director of the Company) that: (A) is engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Company or to an affiliate of the Company; (B) such services are not provided in relation to an offer or sale of securities of the Company in a capital raising transaction, and do not promote or maintain a market for the Company's securities; without limiting the foregoing, consultants providing investor relations services are not Consultants or eligible persons under the Share Compensation Plan; (C) provides the services under a written contract between the Company or the affiliate and the individual or the Company, as the case may be; (D) in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business of the Company or an affiliate of the Company; and (E) has a relationship with the Company or an affiliate of the Company that enables the individual to be knowledgeable about the business and affairs of the Company.

*Administration of the Share Compensation Plan*

The Share Compensation Plan will be administered by the Board or such other persons as may be designated by the Board (the "Administrators") based on the recommendation of the compensation committee of the Board. The Administrators will determine the eligibility of persons to participate in the Share Compensation Plan, when RSUs and options will be awarded or granted, the number of RSUs and Options to be awarded or granted, the vesting criteria for each award of RSUs and grant of Options and all other terms and conditions of each award and grant, in each case in accordance with applicable securities laws and the requirements of the stock exchange or quotation system where the Common Shares are listed on or through which the Common Shares are listed or quoted (the "Exchange").

*Number of Common Share Issuance under the Share Compensation Plan*

The number of Common Shares that will be available for issuance upon the vesting of RSUs awarded and Options granted under the Share Compensation Plan will be limited to 2,000,000 Common Shares.

In the event of any declaration by the Company of any stock dividend payable in securities (other than a dividend which may be paid in cash or in securities at the option of the holder of Common Shares), or any subdivision or consolidation of the Common Shares, reclassification or conversion of the Common Shares, or any combination or exchange of securities, merger, consolidation, recapitalization, amalgamation, plan of arrangement, reorganization, spin off involving the Company, distribution (other than normal course cash dividends) of Company assets to holders of Common Shares, or any other corporate transaction or event involving the Company or the Common Shares, the Administrators may in their sole discretion make such changes or adjustments, if any, as the Administrators consider fair or equitable to reflect such change or event including, without limitation, adjusting the number of options and RSUs outstanding under the Share Compensation Plan, the type and number of securities or other property to be received upon exercise or redemption thereof, and the exercise price of options outstanding under the Share Compensation Plan, provided that the value of any Option or RSU immediately after such an adjustment shall not exceed the value of such Option or RSU prior thereto.

*Change of Control*

In the event of a Change of Control of the Company, the Administrators may, in their sole discretion, provide that the awards (i) will be assumed, converted or replaced by the resulting entity in the Change of Control; (ii) to the extent not assumed, converted or replaced as a result of the Change of Control, that vesting will be accelerated and awards will become 100% exercisable; or (iii) will be, at the option of the Participant, cancelled in exchange for a payment in cash or other property (including shares of the resulting entity in connection with a Change of Control) in an amount equal to the positive difference, if any, of the Fair Market Value of the Common Shares subject to the award over any exercise price related to the award, less any withholding taxes, as applicable.

*Other Terms*

The Administrators will determine the exercise price and term/expiration date of each option, provided that the exercise price in respect of that option shall not be less than the "Fair Market Value" of a Commons Share on the date of grant. "Fair Market Value" is defined in the Share Compensation Plan to mean, as of any date, the closing price of the Common Shares on the Exchange for the last market trading day prior to the date of grant of the option or if the Common Shares are not listed on a stock exchange, the Fair Market Value shall be determined in good faith by the Administrators.

No option shall be exercisable after ten years from the date the option is granted. Under the Share Compensation Plan, should the term of an option expire on a date that falls within a blackout period or within nine business days following the expiration of a blackout period, such expiration date will be automatically extended to the tenth business day after the end of the blackout period.

*Transferability*

RSUs awarded and options granted under the Share Compensation Plan or any rights of a Participant cannot be transferred, assigned, charged, pledged or hypothecated, or otherwise alienated, whether by operation of law or otherwise.

*Certain U.S. Federal Income Tax Consequences of the Share Compensation Plan*

The following is a general summary of certain U.S. federal income tax consequences under current tax law to the Company (applicable to the Company if and only to the extent it is subject to U.S. federal income taxation on its net income) and to Participants in the Share Compensation Plan who are individual citizens or residents of the United States for federal income tax purposes ("U.S. Participants") of stock options which are ISOs, or stock options which are NQSOs, and RSUs. This summary does not purport to cover all of the special rules that may apply, including special rules relating to limitations on our ability to deduct certain compensation, special rules relating to deferred compensation, golden parachutes, U.S. Participants subject to Section 16(b) of the Exchange Act or the exercise of a stock option with previously-acquired ordinary shares. This summary assumes that U.S. Participants will hold their ordinary shares as capital assets within the meaning of Section 1221 of the Code. In addition, this summary does not address the foreign, state or local or other tax consequences, or any U.S. federal non-income tax consequences, inherent in the acquisition, ownership, vesting, exercise, termination or disposition of an award under the Share Compensation Plan, or ordinary shares issued pursuant thereto. Participants are urged to consult with their own tax advisors concerning the tax consequences to them of an award under the Share Compensation Plan or ordinary shares issued thereunder pursuant to the Share Compensation Plan.

A U.S. Participant generally does not recognize taxable income upon the grant of a NQSO if structured to be exempt from or comply with Code Section 409A. Upon the exercise of a NQSO, the U.S. Participant generally recognizes ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the ordinary shares acquired on the date of exercise over the exercise price thereof, and the Company generally will be entitled to a deduction for such amount at that time. If the U.S. Participant later sells ordinary shares acquired pursuant to the exercise of a NQSO, the U.S. Participant recognizes a long-term or short-term capital gain or loss, depending on the period for which the ordinary shares were held. A long-term capital gain is generally subject to more favorable tax treatment than ordinary income or a short-term capital gain. The deductibility of capital losses is subject to certain limitations.

A U.S. Participant generally does not recognize taxable income upon the grant or, except for purposes of the U.S. alternative minimum tax ("AMT") the exercise, of an ISO. For purposes of the AMT, which is payable to the extent it exceeds the U.S. Participant's regular income tax, upon the exercise of an ISO, the excess of the fair market value of the ordinary shares subject to the ISO over the exercise price is a preference item for AMT purposes. If the U.S. Participant disposes of the ordinary shares acquired pursuant to the exercise of an ISO more than two years after the date of grant and more than one year after the transfer of the ordinary shares to the U.S. Participant, the U.S. Participant generally recognizes a long-term capital gain or loss, and the Company will not be entitled to a deduction. However, if the U.S. Participant disposes of such ordinary shares prior to the end of either of the required holding periods, the U.S. Participant will have ordinary compensation income equal to the excess (if any) of the fair market value of such shares on the date of exercise (or, if less, the amount realized on the disposition of such shares) over the exercise price paid for such shares, and the Company generally will be entitled to deduct such amount.

A U.S. Participant generally does not recognize taxable income upon the grant of an RSU. Generally, the U.S. Participant will recognize ordinary income subject to withholding upon the receipt of cash and/or transfer of Common Shares in payment of the RSUs in an amount equal to the aggregate of the cash received or the fair market value of the Common Shares so transferred, as applicable, and the Company and the Company generally will be entitled to a deduction for such amount under U.S. tax laws to the extent applicable to the Company.

**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

**Relationship with FG Group Holdings** 

Prior to the completion of this offering, we will enter into various agreements that will govern the Separation of the Entertainment Business from FG Group Holdings and its transfer to us. These agreements and arrangements will take effect upon the closing of this offering. This offering will not continue if FG Group Holdings decides not to proceed with the Separation. If this offering does not continue, we will not proceed with the Separation. The material agreements described below are filed as exhibits 10.4 through 10.9 to the registration statement of which this prospectus forms a part and are hereby incorporated by reference into this prospectus.

*Master Asset Purchase Agreement*

We, through Strong Entertainment Subco, intend to enter into a Master Asset Purchase Agreement and IP Assignment Agreement with Strong/MDI, a wholly-owned subsidiary of FG Group Holdings, in connection with completion of the Separation. The Master Asset Purchase Agreement and IP Assignment Agreement will provide for the transfer from Strong/MDI to Strong Entertainment Subco of assets comprising Strong/MDI's operating business, except the Joliette Plant and certain other excluded assets as set forth more fully below, including those set forth on Schedule "A" to the Master Asset Purchase Agreement, and the assumption by Strong Entertainment Subco of liabilities relating thereto, except the 20-year installment note collateralized by the Joliette Plant (but including an equipment financing facility with an outstanding balance of approximately CAD$0.4 million which will be contributed to Strong Entertainment Subco along with the financed equipment).

The total purchase price for the transferred assets (the "Purchase Price") will be equal to the fair market value of the transferred assets as of the effective date of the Separation (as agreed in good faith between Strong/MDI and Strong Entertainment Subco). Strong Entertainment Subco will satisfy the Purchase Price by issuing to Strong/MDI an additional 9,999 Common Shares without par value of Strong Entertainment Subco (the "Consideration Shares"). The aggregate issue price for the Consideration Shares will be equal to the fair market value of the transferred assets immediately before the transfer occurs.

In addition to the Joliette Plant (and the 20-year installment note collateralized by the Joliette Plant), certain additional assets currently held by Strong/MDI will not be transferred to Strong Entertainment Subco under the Master Asset Agreement as they are not connected to the Entertainment Business-namely, the common shares of GreenFirst Forest Products Inc., and an intercompany debt owing to Strong/MDI by FG Group Holdings.

Strong/MDI and Strong Entertainment Subco will, each at the request of the other, jointly elect in the form, and within the time, prescribed pursuant to subsection 85(1) of the Income Tax Act (Canada) in respect of the transfer of the transferred assets that the transfer be on a fully tax-deferred basis to Strong/MDI. The amounts agreed upon by Strong/MDI and Strong Entertainment Subco with respect to each of the property and assets comprising the transferred assets will be set out in the election form (collectively referred to herein as the "Elected Amount") within the limits allowed in that regard in the Income Tax Act (Canada). If it is determined by the parties that the Elected Amount will not result in the transfer of the transferred assets on a fully tax-deferred basis, then the Elected Amount will be adjusted to equal such amount (the "Adjusted Elected Amount") as may be agreed to by the parties or, failing such agreement, such amount as may be determined by a court of competent jurisdiction or by a competent taxing authority. Any adjustment will be made with retroactive effect as of the effective date of the Separation. The transferred assets will be transferred on an as is, where is basis.

Strong Entertainment Subco will agree to employ each employee who is employed by Strong/MDI in connection with the Entertainment Business immediately prior to the effective date of the Separation on the same terms and conditions that govern the current employment relationship between Strong/MDI and each particular employee.

*IP Assignment Agreement*

In order the effect the assignment of certain intellectual property being transferred to Strong Entertainment Subco by Strong/MDI under the Master Asset Purchase Agreement, Strong Entertainment Subco will be entering into an IP Assignment Agreement with Strong/MDI.

*FG Group Holdings* *Asset Transfer Agreement*

The FG Group Holdings Asset Transfer Agreement will provide for the transfer from FG Group Holdings to STS of a limited number of contracts and intellectual property used in the Entertainment Business, in a tax-free transfer under Section 351 of the U.S. Internal Revenue Code.

In connection with the FG Group Holdings Asset Transfer Agreement, STS has agreed to indemnify and hold harmless FG Group Holdings against future losses, if any, related to current, product liability or personal injury claims arising out of products sold or distributed in the U.S. related to the operations of the businesses being transferred to us in the Separation prior to Closing.

*FG Group Holdings* *IP Assignment Agreement*

In order the effect the assignment of certain intellectual property being transferred to STS by FG Group Holdings under the FG Group Holdings Asset Transfer Agreement, STS will enter into the FG Group Holdings IP Assignment Agreement with FG Group Holdings.

*Share Transfer Agreements*

In connection with the Separation, we intend to enter into the Share Transfer Agreements with Strong/MDI. The Share Transfer Agreements will provide for the transfer to us of 100% of the outstanding Common Shares of Strong Entertainment Subco and 100% of the outstanding shares of capital stock of STS.

For more information regarding the Master Asset Purchase Agreement, the IP Assignment Agreement, the FG Group Holdings Asset Transfer Agreement and the Share Transfer Agreements see "*The Separation Transaction*," and for more information about the assets and liabilities to be transferred to us, see our unaudited pro forma condensed combined financial statements and the related notes included elsewhere in this prospectus.

*Management Services Agreement*

We intend to enter into a Management Services Agreement with FG Group Holdings in connection with the completion of the Separation and this offering, effective upon the consummation of the Separation and this offering, pursuant to which FG Group Holdings and its subsidiaries and we and our subsidiaries, will provide each other certain services which could include information technology, legal, finance and accounting, human resources, tax, treasury, and other services. Pursuant to the Management Services Agreement, the charges for these services will generally be based on their actual cost basis (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations), except as otherwise agreed upon. The charges for the services are expected to allow the providing company to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service, plus, in some cases, the allocated indirect costs of providing the services, generally without profit. The term for the services to be provided are as set forth in the schedules to the Management Services Agreement, and if no term period is provided for a specified service, then such service is to terminate on the second anniversary of the effective date of the Management Services Agreement, provided that upon the expiration of any term, the term will renew automatically for successive periods of one year's duration unless otherwise set forth therein, and unless the Management Services Agreement is earlier terminated by the parties. The recipient for a particular service generally can terminate that service prior to the scheduled expiration date, subject to a minimum notice period equal to 30 days, and the provider for a particular service generally can terminate that service prior to the scheduled expiration date upon 10 days prior written notice to the recipient, if the recipient has failed to perform any of its material obligations under the Management Services Agreement related to such services, and such failure has continued uncured for a period of 30 days after receipt by the recipient of a written notice of such failure.

We do not expect the net costs associated with the Management Services Agreement to be materially different than the historical costs that have been allocated to us related to these same services.

Currently, we are expecting FG Group Holdings to allocate to us 50% of the rental and utilities costs of their offices in Charlotte, NC (as all of our employees at those premises will also be providing some services to FG Group Holdings under the Management Services Agreement). We estimate these allocated costs to amount to approximately $40,000 per year.

For the allocation of operating expenses of our joint offices in Charlotte NC, we expect to share the costs of those expenses with FG Group Holdings on a 70:30 basis, based on the fact we expect our employees will allocate 70% of their time to our business and 30% of their time to FG Group Holdings. As a result, we estimate that we will allocate to FG Group Holdings 30% of the salary and benefits costs of our employees at the Charlotte NC offices, amounting to approximately $0.2 million per year. Conversely, we expect FG Group Holdings to allocate to us 70% of the cost of our joint ERP system, which we estimate at approximately $0.1 million per year.

Under the Management Services Agreement we expect to settle these and other allocated costs on a net basis at the end of each month. Based on the allocation of the above mentioned material costs, we would expect to receive from FG Group Holdings a net aggregate cost reimbursement of approximately $0.1 million per year, plus or minus any additional costs and services allocated on a monthly basis under the Management Services Agreement.

<u>Dispute Resolution</u>*.* If a dispute arises between FG Group Holdings and us under the Management Services Agreement, the general counsels of the parties and such other representatives as the parties may designate will negotiate to resolve any disputes for a reasonable period of time. If the parties are unable to resolve the dispute in this manner then, unless otherwise agreed by the parties and except as otherwise set forth in the Master Asset Purchase Agreement, the IP Assignment Agreement, the FG Group Holdings Asset Transfer Agreement, the FG Group Holdings IP Assignment Agreement, the Share Transfer Agreements, and the Joliette Plant Lease, the dispute will be resolved through binding confidential arbitration.

<u>Shared Contracts</u>*.* Certain shared contracts have been assigned or amended to facilitate the separation of our business from FG Group Holdings pursuant to the Master Asset Purchase Agreement and the FG Group Holdings Asset Transfer Agreement. If such contracts may not be assigned or amended, or if there is a delay in the assignment of such contracts, the parties are required to take reasonable actions to cause the appropriate party to receive the benefit of the contract after the separation is complete.

The Management Services Agreement also contains standard indemnification, confidentiality, and cooperation provisions.

*Joliette Plant Lease*

In connection with the Separation, we, through Strong Entertainment Subco, intend to enter into the Joliette Plant Lease with Strong/MDI, effective upon the consummation of the Separation and this offering, pursuant to which Strong Entertainment Subco will lease the Joliette Plant on a long-term basis. The Joliette plant includes the building (including all constructions, additions, improvements and modifications) and all of the land associated with that property.

The Joliette Plant Lease will be a fifteen (15) year triple net lease, with the option of Strong Entertainment Subco to renew for five (5) consecutive periods of five years each, and a right of first refusal to purchase the Joliette Plant in the event that Strong/MDI wishes to sell the property to a third-party in the future. The base rent for the first five years of the Joliette Plant Lease will be USD$415,000 per year, and will be increased as of the 6th year by 1.5% each year for the duration of the remaining portion of the 15-year lease.

The Joliette Plant Lease will be a triple net lease, which means that the landlord, Strong/MDI, shall not be responsible for any costs, charges, expenses or disbursements in respect of the premises. Under the terms of the lease, Strong Entertainment Subco will be responsible for all such costs, charges, expenses or disbursements, including but not limited to all real estate taxes, utilities costs, repairs, maintenance and improvements, as well as the costs of all permits, licenses and approvals to operate the Joliette Plant.

**PRINCIPAL SHAREHOLDERS**

The following table sets forth certain information furnished by current management and others, concerning the beneficial ownership of our Common Shares and our Class B Shares as of the date of this prospectus, of (i) each person who is known to us to be the beneficial owner of more than five percent of our Common Shares or Class B Shares; (ii) all directors and NEOs; and (iii) our directors and executive officers as a group. The percentages below are based on a total of 8,000,000 Common Shares, and 100 Class B Shares outstanding, each, as of the date of this prospectus, assuming the completion of this offering. The totals relating to the ownership percentages following the offering are based on the assumption of the sale of all Common Shares offered in the offering.

The address of each holder listed below, except as otherwise indicated, is c/o Strong Global Entertainment, Inc., 5960 Fairview Road, Suite 275, Charlotte, NC 28210.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Amount of Beneficial Ownership <br> Prior to Offering <sup>(1)</sup>** | **Amount of Beneficial Ownership <br> Prior to Offering <sup>(1)</sup>** | **Amount of Beneficial Ownership <br> Prior to Offering <sup>(1)</sup>** | **Amount of Beneficial Ownership <br> Prior to Offering <sup>(1)</sup>** | **Amount of Beneficial Ownership <br> After Offering <sup>(1)(2)</sup>** | **Amount of Beneficial Ownership <br> After Offering <sup>(1)(2)</sup>** | **Amount of Beneficial Ownership <br> After Offering <sup>(1)(2)</sup>** | **Amount of Beneficial Ownership <br> After Offering <sup>(1)(2)</sup>** |
| | **Class A** | **Class A** | **Class B <sup>(3)</sup>** | **Class B <sup>(3)</sup>** | **Class A** | **Class A** | **Class B <sup>(3)</sup>** | **Class B <sup>(3)</sup>** |
| <br>**Name and Address of Beneficial Owner** | **Number of Shares** | **Percentage of Shares** | **Number of Shares** | **Percentage of Shares** | **Number of Shares** | **Percentage of Shares** | **Number of Shares** | **Percentage of Shares** |
| Mark D. Roberson | &nbsp;&nbsp;&nbsp;&nbsp;- |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;30000<sup>(4)</sup> | \* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Todd R. Major |  |  |  |  | 25000<sup>(4)</sup> | \* |  |  |
| Ray F. Boegner |  |  |  |  | 25000<sup>(4)</sup> | \* |  |  |
| D. Kyle Cerminara |  |  |  |  | 30000<sup>(4)</sup> | \* |  |  |
| Richard E. Govignon Jr |  |  |  |  | 20000<sup>(4)</sup> | \* |  |  |
| John W. Struble |  |  |  |  | 20000<sup>(4)</sup> | \* |  |  |
| Marsha G. King |  |  |  |  | 20000<sup>(4)</sup> | \* |  |  |
| Named Executive Officers and Directors as a Group (seven Persons) |  |  |  |  | 170000 | 2.1% |  |  |
| Strong/MDI<sup>(5)</sup> | 1 | 100% | 100 | 100% | 6000000 | 73.4% | 100 | 100% |

---

\*Less than 1%

(1) This
 table is based upon information supplied by officers, directors and principal shareholders and is believed to be accurate. Unless
 otherwise indicated in the footnotes to this table, we believe that each of the shareholders named in this table has sole voting
 and investment power with respect to the shares indicated as beneficially owned. Beneficial ownership is determined in accordance
 with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.
 Common shares subject to options, warrants, or other conversion privileges currently exercisable or convertible, or exercisable or
 convertible within 60 days of the date of this table, are deemed outstanding for computing the percentage of the person holding such
 option, warrant, or other convertible instrument but are not deemed outstanding for computing the percentage of any other person.
 Where more than one person has a beneficial ownership interest in the same shares, the sharing of beneficial ownership of these shares
 is designated in the footnotes to this table. As of the date of this prospectus, the Company had 8,170,000 Common Shares outstanding,
 assuming the completion of this offering, assuming no exercise of the underwriters' over-allotment option.

(2) Assumes that the underwriters do not exercise their
 over-allotment option.

(3) Holders of our Class B Shares are not entitled to vote on any other matter
(other than as provided by law), other than that, so long as the holder of our Class B Shares continues to hold, directly or indirectly,
at least 30% of our issued and outstanding Common Shares, it shall be entitled to elect or appoint at least 50% (rounded up to the nearest
whole number) of the total number of our directors. See "*Description of Securities—General—Class B Shares*."

(4) Represents the number of Common Shares
 underlying the RSUs that will be granted to each of our executive officers and directors upon the completion of this offering, which
 will immediately vest.

(5) As
 the parent company of Strong/MDI, FG Group Holdings may be deemed to be the indirect
 beneficial owner of the Common Shares held directly by Strong/MDI, and to share voting and
 dispositive power with respect to such Common Shares.

**DESCRIPTION OF SECURITIES**

**General**

The Company is authorized to issue 150,000,000 Class A Common Voting shares without par value. As at the date of this prospectus, there is one Common Share issued and outstanding as fully paid and non-assessable. In addition, 2,000,000 Common Shares are reserved for issuance pursuant to the Share Compensation Plan. See *"Executive and Director Compensation* -*2023 Share Compensation Plan".*

The Company is authorized to issue 100 Class B Limited Voting shares without par value. As at the date of this prospectus, there are no Class B Shares issued and outstanding. Following the Separation there will be 100 Class B Shares issued and outstanding to Strong/MDI Quebec.

The Company is authorized to issue 150,000,000 preferred shares without par value. As at the date of this prospectus, there are no preferred shares issued and outstanding.

The following is a summary of the material terms of our share capital, as set forth in our Notice of Articles and Articles and any amendments thereto, as the same will be effective at the time of the consummation of this offering, and certain related sections of the BCBCA. The following summary is not a complete description of the share rights associated with our Common Shares, Class B Shares, and preferred shares and is subject to, and is qualified in its entirety by reference to, the provisions of our Notice of Articles and Articles, and any amendments thereto. For more detailed information, please see the forms of our BCBCA Notice of Articles and Articles, and any amendments thereto, which are filed as exhibits to the registration statement of which this prospectus forms a part.

***Class A Shares***

Holders of our Common Shares are entitled to one vote per share on all matters upon which holders of shares are entitled to vote. Subject to the prior rights of the holders of preferred shares, if any, the holders of our Common Shares are entitled to receive dividends as and when declared by our Board of Directors. See the section entitled "*Dividend Policy*." Subject to the prior payment to the holders of preferred shares and Class B Shares, if any, in the event of our liquidation, dissolution or winding-up or other distribution of our assets among our shareholders, the holders of our Common Shares are entitled to share pro rata in the distribution of the balance of our assets. Holders of Common Shares have no pre-emptive or conversion or exchange rights or other subscription rights. There are no redemption, retraction, purchase for cancellation or surrender provisions or sinking or purchase fund provisions applicable to our Common Shares. There is no provision in our Articles, as amended, requiring holders of Common Shares to contribute additional capital, or permitting or restricting the issuance of additional securities or any other material restrictions. The special rights or restrictions attached to the Common Shares are subject to and may be adversely affected by, the rights attached to any series of preferred shares that we may designate in the future.

***Class B Shares***

Holders of our Class B Shares are, at all times, regardless of the number of Class B Shares held, entitled to (i) elect or appoint at least fifty percent (50%) (rounded up to the nearest whole number) of the total number of our directors (each a "Class B Director"), (ii) remove any Class B Director, and (iii) elect or appoint a director to fill any vacancy left by a Class B Director. No holder of any class or series of shares, other than Class B Shares, are entitled to nominate, elect, remove, or propose to remove, a Class B Director. Holders of our Class B Shares are not entitled to vote on any other matter (other than as provided by law), are not entitled to dividends, are subject to transfer restrictions, and are redeemable and retractable at the price of $1.00 per Class B Share (the "Class B Redemption Amount") upon certain conditions being met. The Company has an obligation to redeem all of the Class B Shares held by a holder of Class B Shares, upon receipt of notice that such holder has ceased to hold, directly or indirectly, at least thirty percent (30%) of our issued and outstanding Common Shares. On the liquidation, dissolution, or winding-up or other distribution of our assets among our shareholders, holders of Class B Shares are entitled to receive the Class B Redemption Amount for each Class B Share held by them, after which they will not be entitled to share in any further distribution of property or assets of the Company among its shareholders.

The special rights and restrictions attached to the Class B Shares, including the transfer restrictions and right to nominate or elect fifty (50%) percent or a majority of our board, could impede or discourage an acquisition attempt or other transaction that some, or a majority, of shareholders might believe to be in its best interests or in which a shareholder might receive a premium for the Company's Common Shares over the market price of the Common Shares. Additionally, the issuance of Class B Shares may adversely affect the holders of the Company's Common Shares by reducing the number of our directors which the holders of our Common Shares are entitled to nominate, elect, or appoint, or subordinating the liquidation rights of the Common Shares. As a result of these or other factors, the issuance of Class B Shares could have an adverse impact on the market price of the Company's Common Shares.

***Preferred Shares***

The Company's Articles and Notice of Articles, each as amended, authorize the Company's Board to establish one or more series of preferred shares (including convertible preferred shares). Unless required by law or by the NYSE American, the authorized preferred shares will be available for issuance without further action by common shareholders. The Company's Board may determine, with respect to any series of preferred shares, the powers (including voting powers), preferences and relative participations, optional or other special rights, and the qualifications, limitations or restrictions thereof, of that series, including, without limitation:

● the designation of the series;

● the number of shares of the series, which the Company's Board may, except where otherwise provided in the preferred share designation, increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding);

● whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;

● the dates at which dividends, if any, will be payable;

● the redemption rights and price or prices, if any, for shares of the series;

● the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;

● the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Company;

● whether the shares of the series will be convertible into shares of any other class or series, or any other security, of the Company or any other corporation, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made;

● restrictions on the issuance of shares of the same series or of any other class or series; and

● the voting rights, if any, of the holders of the series.

The Company could issue a series of preferred shares that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that some, or a majority, of a shareholder might believe to be in its best interests or in which a shareholder might receive a premium for the Company's Common Shares over the market price of the Common Shares. Additionally, the issuance of preferred shares may adversely affect the holders of the Company's Common Shares by restricting dividends on the Common Shares, diluting the voting power of the Common Shares or subordinating the liquidation rights of the Common Shares. As a result of these or other factors, the issuance of preferred shares could have an adverse impact on the market price of the Company's Common Shares.

***Representative's Warrants***

We have agreed to issue to the Representative, upon the consummation of this offering, warrants to purchase up to an aggregate of 115,000 Common Shares (5% of the Common Shares sold in this offering, including any Common Shares sold upon exercise of the underwriters' over-allotment option). The Representative's Warrants are exercisable at a per share price equal to 125% of the public offering price per share in this offering (excluding the over-allotment option). The Representative's Warrants are exercisable at any time and from time to time, in whole or in part, commencing on the six month anniversary of the effective date of the registration statement of which this prospectus is a part and expiring on the date that is five years following the effective date of the registration statement of which this prospectus is a part.

***Landmark Warrant***

We have agreed to issue to Landmark, no later than 10 days after the consummation of this offering, and subject to execution by Landmark of the Landmark Warrant, including the making of certain representations and agreements as set forth therein, a warrant to purchase up to 150,000 of our Common Shares at an exercise price of the per-share offering price to the public in this offering. The Landmark Warrant will be exercisable at any time or from time to time six months from the date of the consummation of this offering and prior to the third anniversary of the date of issuance of the Landmark Warrant. The Landmark Warrant will provide for certain registration rights and allows for cashless exercise if there is no registration statement covering the Common Shares underlying the warrant within nine months of the warrant issuance date.

***Transfer Agent and Registrar***

The transfer agent and registrar for our Common Shares and our preferred shares is Broadridge Corporate Issuer Solutions, Inc. The transfer agent's address is P.O. Box 1342 Brentwood, NY 11717, and its telephone number is 877-830-4936.

**Ownership and Exchange Controls**

There is no limitation imposed by Canadian law or by our Articles, as amended, on the right of a non-resident to hold or vote our Common Shares, other than discussed below.

***Competition Act***

Limitations on the ability to acquire and hold our Common Shares may be imposed by the *Competition Act* (Canada). This legislation permits the Commissioner of Competition (the "Commissioner"), to review any acquisition or establishment, directly or indirectly, including through the acquisition of shares, of control over or of a significant interest in us. This legislation grants the Commissioner jurisdiction, for up to one year after the acquisition has been substantially completed, to challenge this type of acquisition by seeking a remedial order, including an order to prohibit the acquisition or require divestitures, from the Canadian Competition Tribunal, which may be granted where the Competition Tribunal finds that the acquisition substantially prevents or lessens, or is likely to substantially prevent or lessen, competition.

This legislation also requires any person or persons who intend to acquire more than 20% of our voting shares or, if such person or persons already own more than 20% of our voting shares prior to the acquisition, more than 50% of our voting shares, to file a notification with the Canadian Competition Bureau if certain financial thresholds are exceeded. Where a notification is required, unless an exemption is available, the legislation prohibits completion of the acquisition until the expiration of the applicable statutory waiting period, unless the Commissioner either waives or terminates such waiting period or issues an advance ruling certificate. The Commissioner's review of a notifiable transaction for substantive competition law considerations may take longer than the statutory waiting period.

***Investment Canada Act***

The *Investment Canada Act* requires each "non-Canadian" (as defined in the *Investment Canada Act*) who acquires "control" of an existing "Canadian business," to file a notification in prescribed form with the responsible federal government department or departments not later than 30 days after closing, provided the acquisition of control is not a reviewable transaction under the *Investment Canada Act*. Subject to certain exemptions, a transaction that is reviewable under the *Investment Canada Act* may not be implemented until an application for review has been filed and the responsible Minister of the federal cabinet has determined that the investment is likely to be of "net benefit to Canada" taking into account certain factors set out in the *Investment Canada Act*. Under the *Investment Canada Act*, an investment in our Common Shares by a non-Canadian who is an investor originating from a country with which Canada has a free trade agreement, including a United States investor, would be reviewable only if it were an investment to acquire control of us pursuant to the *Investment Canada Act* and our enterprise value (as determined pursuant to the *Investment Canada Act* and its regulations) was equal to or greater than the amount specified, which is currently CAD$1.565 billion. For most other investors who are not state-owned enterprises the threshold is currently CAD$1.043 billion for 2021.

The *Investment Canada Act* contains various rules to determine if there has been an acquisition of control. Generally, for purposes of determining whether an investor has acquired control of a corporation by acquiring shares, the following general rules apply, subject to certain exceptions: the acquisition of a majority of the undivided ownership interests in the voting shares of the corporation is deemed to be acquisition of control of that corporation; the acquisition of less than a majority, but one-third or more, of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and the acquisition of less than one-third of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is deemed not to be acquisition of control of that corporation.

Under the national-security-review regime in the *Investment Canada Act*, review on a discretionary basis may also be undertaken by the federal government in respect to a much broader range of investments by a non-Canadian to "acquire, in whole or part, or to establish an entity carrying on all or any part of its operations in Canada." No financial threshold applies to a national-security review. The relevant test is whether such investment by a non-Canadian could be "injurious to national security." The responsible ministers have broad discretion to determine whether an investor is a non-Canadian and therefore subject to national-security review. Review on national-security grounds is at the discretion of the responsible ministers, and may occur on a pre- or post-closing basis.

Certain transactions relating to our Common Shares will generally be exempt from the *Investment Canada Act*, subject to the federal government's prerogative to conduct a national-security review, including:

● the acquisition of our Common Shares by a person in the ordinary course of that person's business as a trader or dealer in securities;

● the acquisition of control of us in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of the *Investment Canada Act*; and

● the acquisition of control of us by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of us, through ownership of our Common Shares, remains unchanged.

**MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES** 

***General***

This section is a general summary of the material U.S. federal income tax provisions relating to the acquisition, ownership and disposition of Common Shares issued pursuant to this offering. This section does not address any aspect of U.S. federal gift or estate tax, or the state, local or non-U.S. tax consequences of an investment in Common Shares, nor does it provide any actual representations as to any tax consequences of the acquisition, ownership or disposition of Common Shares.

Because the components of a unit are separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying common share, warrant and right components of the unit, as the case may be. As a result, the discussion below of the U.S. federal income tax consequences with respect to actual holders of Common Shares, warrants and rights should also apply to holders of units (as the deemed owners of the underlying Common Shares, warrants and rights that comprise the units).

The discussion below of the U.S. federal income tax consequences to "U.S. Holders" will apply to a beneficial owner of Common Shares who or that is for U.S. federal income tax purposes:

● an individual citizen or resident of the United States;

● a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;

● an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

● a trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

If a beneficial owner of Common Shares is not described as a U.S. Holder and is not an entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes, such owner will be considered a "Non-U.S. Holder." The material U.S. federal income tax consequences of the acquisition ownership and disposition of Common Shares applicable specifically to Non-U.S. Holders are described below under the heading "Non-U.S. Holders."

This discussion is based on the Internal Revenue Code of 1986, as amended, its legislative history, Treasury Regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject to change or differing interpretations, possibly on a retroactive basis.

This discussion assumes that the Common Shares, warrants and rights will trade separately and does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder's individual circumstances. In particular, this discussion considers only holders that purchase Common Shares pursuant to this offering and own and hold Common Shares as capital assets within the meaning of Section 1221 of the Code, and does not address the potential application of the alternative minimum tax or the Medicare Tax on net investment income. In addition, this discussion does not address the U.S. federal income tax consequences to holders that are subject to special rules, including:

● financial institutions or financial services entities;

● broker-dealers, and traders in securities or foreign currencies;

● taxpayers that are subject to the mark-to-market accounting rules under Section 475 of the Code;

● tax-exempt entities;

● governments or agencies or instrumentalities thereof;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● grantor trusts;

● expatriates or former long-term residents of the United States;

● persons that actually or constructively own 5 percent or more of our voting shares;

● persons that acquired Common Shares pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;

● persons that hold Common Shares as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction;

● persons whose functional currency is not the U.S. dollar;

● controlled foreign corporations;

● partnerships, S-corporations, or other entities or arrangements classified as partnerships for U.S. federal income tax purposes and any beneficial owners of such entities; or

● passive foreign investment companies.

This discussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, state, local or non-U.S. tax laws or, except as discussed herein, any tax reporting obligations of a holder of Common Shares. Additionally, this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold Common Shares through such entities. If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of Common Shares, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. This discussion also assumes that any distributions made (or deemed made) by us on our Common Shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of Common Shares will be in U.S. dollars.

We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the descriptions herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.

THIS DISCUSSION IS ONLY A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON SHARES. IT DOES NOT PROVIDE ANY ACTUAL REPRESENTATIONS AS TO ANY TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON SHARES AND WE HAVE NOT OBTAINED ANY OPINION OF COUNSEL WITH RESPECT TO SUCH TAX CONSEQUENCES. AS A RESULT, EACH PROSPECTIVE INVESTOR IN COMMON SHARES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL NON-INCOME TAX LAWS AND ANY APPLICABLE TAX TREATIES.

***U.S. Holders***

*Tax Reporting*

Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to us. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement. Each U.S. Holder is urged to consult with its own tax advisor regarding this reporting obligation.

*Taxation of Distributions Paid on Common Shares*

Subject to the PFIC rules discussed below, a U.S. Holder generally will be required to include in gross income as dividends the amount of any cash dividend paid on our Common Shares. A cash distribution on such shares generally will be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations.

Distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder's tax basis in its Common Shares (but not below zero) and, to the extent in excess of such tax basis, will be treated as gain from the sale or exchange of such Common Shares.

With respect to non-corporate U.S. Holders, dividends may be subject to the lower applicable long-term capital gains tax rate (see "— *Taxation on the Disposition of Common Shares*" below) if our Common Shares are readily tradeable on an established securities market in the United States and certain other requirements are met. U.S. Holders should consult their own tax advisors regarding the availability of the lower rate for any dividends paid with respect to our Common Shares.

*Taxation on the Disposition of Common Shares*

Upon a sale or other taxable disposition of our Common Shares, and subject to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder's adjusted tax basis in the Common Shares. A U.S. Holder's adjusted tax basis in its Common Shares generally will equal the U.S. Holder's acquisition cost (that is, the portion of the purchase price of a unit allocated to an common share, warrant, or right) reduced by any prior distributions treated as a return of capital.

The regular U.S. federal income tax rate on capital gains recognized by U.S. Holders generally is the same as the regular U.S. federal income tax rate on ordinary income, except that under tax law currently in effect, long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal income tax at reduced rates. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder's holding period for the Common Shares exceeds one year. The deductibility of capital losses is subject to various limitations. U.S. Holders who recognize losses with respect to a disposition of our Common Shares should consult their own tax advisors regarding the tax treatment of such losses.

*Passive Foreign Investment Company Rules*

Certain adverse U.S. federal income tax consequences could apply to a U.S. Holder if we are treated as a PFIC for any taxable year during which U.S. Holders hold Common Shares. A foreign (i.e., non-U.S.) corporation will be classified as a PFIC for U.S. federal income tax purposes if at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any entity in which it is considered to own at least 25% of the interest by value, is passive income. Alternatively, a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year, ordinarily determined based on fair market value and averaged quarterly over the year, including its pro rata share of the assets of any entity in which it is considered to own at least 25% of the interest by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.

The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies that in some circumstances are unclear and subject to varying interpretation. Under the income test described above, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure. The composition of our income and assets is also affected by the spending of the cash we raise in any offering, including this offering. We are not currently expected to be treated as a PFIC for U.S. federal income tax purposes following the Separation, but this conclusion is a factual determination made annually and, thus, is subject to change.

Although a determination as to our PFIC status will be made annually, an initial determination we are a PFIC will generally apply for subsequent years to a U.S. Holder who held Common Shares while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) our Common Shares, however, will not be subject to the PFIC tax and interest charge rules discussed above in respect to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with respect to such shares for any of our taxable years that end within or with a taxable year of the U.S. Holder and in which we are not a PFIC. On the other hand, if the QEF election is not effective for each of our taxable years in which we are a PFIC and the U.S. Holder holds (or is deemed to hold) our Common Shares, the PFIC rules discussed above will continue to apply to such shares unless the holder files on a timely filed U.S. federal income tax return (including extensions) a QEF election and a purging election to recognize under the PFIC rules any gain that the U.S. Holder would otherwise recognize if the U.S. Holder had sold our Common Shares for their fair market value on the "qualification date." The qualification date is the first day of our tax year in which we qualify as a QEF with respect to such U.S. Holder. The purging election can only be made if such U.S. Holder held our Common Shares on the qualification date. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will increase the adjusted tax basis in our Common Shares by the amount of the gain recognized and will also have a new holding period in the Common Shares for purposes of the PFIC rules.

Alternatively, if a U.S. Holder, at the close of its taxable year, owns (or is deemed to own) shares in a PFIC that are treated as marketable shares, the U.S. Holder may make a mark-to-market election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) our Common Shares and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to its Common Shares as long as such shares continue to be treated as marketable shares. Instead, in general, the U.S. Holder will include as ordinary income for each year that we are treated as a PFIC the excess, if any, of the fair market value of its Common Shares at the end of its taxable year over the adjusted basis in its Common Shares. The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its Common Shares over the fair market value of its Common Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder's adjusted tax basis in its Common Shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of the Common Shares in a taxable year in which we are treated as a PFIC will be treated as ordinary income. Special tax rules may also apply if a U.S. Holder makes a mark-to-market election for a taxable year after the first taxable year in which the U.S. Holder holds (or is deemed to hold) its Common Shares and for which we are treated as a PFIC. Currently, a mark-to-market election may not be made with respect to our warrants or rights.

The mark-to-market election is available only for shares that are regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, including NYSE American, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. U.S. Holders should consult their own tax advisors regarding the availability and tax consequences of a mark-to-market election in respect to our Common Shares under their particular circumstances.

If we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. Upon request, we will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. However, there can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide the required information. A mark-to-market election generally would not be available with respect to such lower-tier PFIC. U.S. Holders are urged to consult their own tax advisors regarding the tax issues raised by lower-tier PFICs.

A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is or has been made) with such U.S. Holder's U.S. federal income tax return and provide such other information as may be required by the U.S. Treasury Department.

The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of Common Shares should consult their own tax advisors concerning the application of the PFIC rules to Common Shares under their particular circumstances.

***Non-U.S. Holders***

Dividends (including constructive dividends) paid or deemed paid to a Non-U.S. Holder in respect to our Common Shares generally will not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains or maintained in the United States).

In addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our Common Shares unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains or maintained in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United States sources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).

Dividends (including constructive dividends) and gains that are effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains or maintained in the United States) generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.

***Backup Withholding and Information Reporting***

In general, information reporting for U.S. federal income tax purposes should apply to distributions made on our Common Shares within the United States to a U.S. Holder (other than an exempt recipient) and to the proceeds from sales and other dispositions of our Common Shares by a U.S. Holder (other than an exempt recipient) to or through a U.S. office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances. In addition, certain information concerning a U.S. Holder's adjusted tax basis in its Common Shares and whether any gain or loss with respect to such Common Shares is long-term or short-term may be required to be reported to the IRS, and certain holders may be required to file an IRS Form 8938 (Statement of Specified Foreign Financial Assets) to report their interest in our Common Shares.

Moreover, backup withholding of U.S. federal income tax, currently at a rate of 24%, generally will apply to dividends paid on our Common Shares to a U.S. Holder (other than an exempt recipient) and the proceeds from sales and other dispositions of our Common Shares by a U.S. Holder (other than an exempt recipient), in each case who:

● fails to provide an accurate taxpayer identification number;

● is notified by the IRS that backup withholding is required; or

● fails to comply with applicable certification requirements.

A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.

We will withhold all taxes required to be withheld by law from any amounts otherwise payable to any holder of our Common Shares, including tax withholding required by the backup withholding rules. Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder's or a Non-U.S. Holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that the requisite information is timely furnished to the IRS. Holders are urged to consult their own tax advisors regarding the application of backup withholding and the availability of and procedure for obtaining an exemption from backup withholding in their particular circumstances.

**CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF OUR COMMON**

**SHARES THAT ARE NON-RESIDENT IN CANADA**

The following is, as of the date hereof, a general summary of the principal Canadian federal income tax considerations under the *Income Tax Act* (Canada) (the "Tax Act") and the regulations thereunder (the "Regulations") generally applicable to a beneficial holder of Common Shares who, at all relevant times, for the purposes of the Tax Act, (i) deals at arm's length with the Company, (ii) is not affiliated with the Company, (iii) holds such Common Shares as capital property, (iv) is neither resident nor deemed to be resident in Canada, (v) does not use or hold, and will not be deemed to use or hold, Common Shares in or in the course of carrying on a business in Canada, and (vi) is a resident of the United States for purposes of the Canada-United States Income Tax Convention (1980) (the "Canada-U.S. Tax Convention"), and is a "qualifying person" within the meaning of the Canada-U.S. Tax Convention (each, a "U.S. Resident Holder"). In some circumstances, persons deriving amounts through fiscally transparent entities (including limited liability companies) may be entitled to benefits under the Canada-U.S. Tax Convention. U.S. Resident Holders are urged to consult their own tax advisors to determine their entitlement to benefits under the Canada-U.S. Tax Convention based on their particular circumstances.

Common shares will generally be considered to be capital property to a U.S. Resident Holder unless the U.S. Resident Holder holds or uses the Common Shares or is deemed to hold or use the Common Shares in the course of carrying on a business of trading or dealing in securities or has acquired them or deemed to have acquired them in a transaction or transactions considered to be an adventure or concern in the nature of trade.

This summary does not apply to a U.S. Resident Holder (i) that is a "financial institution" for purposes of the mark to market rules contained in the Tax Act; (ii) an interest in which is or would constitute a "tax shelter investment" as defined in the Tax Act; (iii) that is a "specified financial institution" as defined in the Tax Act; (iv) that is a corporation that does not deal at arm's length for purposes of the Tax Act with a corporation resident in Canada and that is or becomes as part of a transaction or event or series of transactions or events that includes the acquisition of the Common Shares, controlled by a non-resident corporation for the purposes of the foreign affiliate dumping rules in Section 212.3 of the Tax Act; (v) that reports its "Canadian tax results" in a currency other than Canadian currency, all as defined in the Tax Act; (vi) that is exempt from tax under the Tax Act; or (vii) that has entered into, or will enter into, a "synthetic disposition arrangement" or a "derivative forward agreement" with respect to the Common Shares, as those terms are defined in the Tax Act. Such U.S. Resident Holders should consult their own tax advisors with respect to their holding of Common Shares.

Special considerations, which are not discussed in this summary, may apply to a U.S. Resident Holder that is an insurer that carries on an insurance business in Canada and elsewhere or an authorized foreign bank (as defined in the Tax Act). Such U.S. Resident Holders should consult their own advisors.

This summary does not address the deductibility of interest by a U.S. Resident Holder who has borrowed money or otherwise incurred debt in connection with the acquisition of Common Shares.

This summary is based upon the current provisions of the Tax Act and the Regulations in force as of the date hereof, specific proposals to amend the Tax Act and the Regulations (the "Tax Proposals") which have been announced by or on behalf the Minister of Finance (Canada) prior to the date hereof, the current provisions of the Canada-U.S. Tax Convention, and counsel's understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (the "CRA"). This summary assumes that the Tax Proposals will be enacted in the form proposed and does not take into account or anticipate any other changes in law, whether by way of judicial, legislative or governmental decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian federal income tax considerations discussed herein. No assurances can be given that the Tax Proposals will be enacted as proposed or at all, or that legislative, judicial or administrative changes will not modify or change the statements expressed herein.

This summary is not exhaustive of all possible Canadian federal income tax considerations applicable to the holding of Common Shares. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or income tax advice to any particular U.S. Resident Holder. U.S. Resident Holders should consult their own income tax advisors with respect to the tax consequences applicable to them based on their own particular circumstances.

**Amounts Determined in Canadian Dollars**

Generally, for purposes of the Tax Act, all amounts relating to the Common Shares must be expressed in Canadian dollars, including cost, adjusted cost base, proceeds of disposition, and dividends, and amounts denominated in U.S. dollars must be converted to Canadian dollars using the single daily exchange rate published by the Bank of Canada on the particular date the particular amount arose, or such other rate of exchange as may be accepted by the CRA. U.S. Resident Holders may therefore realize additional income or gain by virtue of changes in foreign exchange rates and are advised to consult with their own tax advisors in this regard. Currency tax issues are not discussed further in this summary.

**Dividends of Common Shares**

Subject to an applicable international tax treaty or convention, dividends paid or credited, or deemed to be paid or credited, to a non-resident of Canada on the Common Shares will be subject to Canadian withholding tax under the Tax Act at the rate of 25% of the gross amount of the dividend. Such rate is generally reduced under the Canada-U.S. Tax Convention to 15% if the beneficial owner of such dividend is a U.S. Resident Holder. The rate of withholding tax is further reduced to 5% if the beneficial owner of such dividend is a U.S. Resident Holder that is a company that owns, directly or indirectly, at least 10% of the voting stock of the Company. In addition, under the Canada-U.S. Tax Convention, dividends may be exempt from such Canadian withholding tax if paid to certain U.S. Resident Holders that are qualifying religious, scientific, literary, educational, or charitable tax exempt organizations or qualifying trusts, companies, organizations, or arrangements operated exclusively to administer or provide pension, retirement, or employee benefits or benefits for the self-employed under one or more funds or plans established to provide pension or retirement benefits or other employee benefits that are exempt from tax in the United States and that have complied with specific administrative procedures.

**Disposition of Common Shares**

A U.S. Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such U.S. Resident Holder on a disposition of Common Shares, unless the Common Shares constitute "taxable Canadian property" (as defined in the Tax Act) of the U.S. Resident Holder at the time of the disposition and are not "treaty-protected property" (as defined in the Tax Act) of the U.S. Resident Holder at the time of the disposition.

Generally, as long as the Common Shares are listed on a designated stock exchange (which currently includes the NYSE American) at the time of its disposition, the Common Shares will not constitute taxable Canadian property of a U.S. Resident Holder, unless at any time during the 60 month period immediately preceding the disposition the following two conditions are met concurrently: (a) the U.S. Resident Holder, persons with which the U.S. Resident Holder does not deal at arm's length, partnerships whose members include, either directly or indirectly through one or more partnerships, the U.S. Resident Holder or persons who do not deal at arm's length with the U.S. Resident Holder, or any combination of them, owned 25% or more of the issued shares of any class or series of shares of the authorized share structure of the Company, and (b) more than 50% of the fair market value of the Common Shares was derived directly or indirectly, from one or any combination of real or immovable property situated in Canada, "Canadian resource properties", "timber resource properties" (each as defined in the Tax Act), and options in respect of or interests in, or for civil law rights in, any such property (whether or not such property exists). The Tax Act may also deem Common Shares to be taxable Canadian property to a U.S. Resident Holder in certain circumstances.

Even if the Common Shares are considered to be taxable Canadian property to a U.S. Resident Holder, the U.S. Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such U.S. Resident Holder on a disposition of Common Shares if the Common Shares are "treaty-protected property" of the U.S. Resident Holder at the time of the disposition. The Common Shares of such U.S. Resident Holder will generally constitute "treaty-protected property" for purposes of the Tax Act unless the value of the Common Shares is derived principally from real property situated in Canada. For this purpose, "real property" has the meaning that term has under the laws of Canada and includes any option or similar right in respect thereof and usufruct of real property, rights to explore for or to exploit mineral deposits, sources and other natural resources and rights to amounts computed by reference to the amount or value of production from such resources.

**Taxation of Capital Gains and Losses**

If the Common Shares are taxable Canadian property of a U.S. Resident Holder and are not treaty-protected property of that U.S. Resident Holder at the time of the disposition, that U.S. Resident Holder will realize a capital gain (or incur a capital loss) equal to the amount by which the proceeds of disposition in respect of the Common Shares exceed (or are exceeded by) the aggregate of the adjusted cost base to the Resident Holder of such Common Shares immediately before the disposition and any reasonable expenses incurred for the purpose of making the disposition.

Generally, one half of any capital gain (a "taxable capital gain") realized by a U.S. Resident Holder must be included in the U.S. Resident Holder's income for the taxation year in which the disposition occurs. Subject to and in accordance with the provisions of the Tax Act, one half of any capital loss incurred by a Resident Holder (an "allowable capital loss") must generally be deducted from taxable capital gains realized by the Resident Holder in the taxation year in which the disposition occurs. Allowable capital losses in excess of taxable capital gains for the taxation year of disposition generally may be carried back and deducted in the three preceding taxation years or carried forward and deducted in any subsequent year against taxable capital gains realized in such years, in the circumstances and to the extent provided in the Tax Act.

U.S. Resident Holders whose Common Shares are taxable Canadian property should consult their own advisors.

**SHARES ELIGIBLE FOR FUTURE SALE**

There is currently no market for our Common Shares. We cannot predict the effect, if any, that market sales of our Common Shares or the availability of our Common Shares for sale will have on the market price of our Common Shares prevailing from time to time. Sales of substantial amounts of our Common Shares in the public market after this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities.

All of the Common Shares distributed hereunder will be freely tradable, except that any Common Shares acquired by our affiliates, as that term is defined in Rule 144 under the Securities Act, may only be sold in compliance with the limitations described below. Following the closing of the offering and the Separation, and assuming that all of the offered Common Shares are purchased, these affiliates, which consist solely of Strong/MDI, will hold a total of approximately 6,000,000 Common Shares, or 75.0% of the Common Shares outstanding, which percentage calculation does not take into account the underwriters' overallotment shares or RSUs to be issued to our directors and officers upon the completion of this offering.

**Lock-Up Agreements**

Pursuant to "lock-up" agreements, our directors and officers have agreed, for a period of twelve (12) months from the date of this offering, and any other holder of our outstanding Common Shares has agreed, for a period of twelve (12) months from the date of this offering, subject to limited exceptions, without the prior written consent of the Representative, that they will not offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities.

In addition, pursuant to the Underwriting Agreement, we and any of our successors have agreed, for a period of twelve (12) months from the date of the Underwriting Agreement, that each will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise.

**Share Compensation Plans**

We intend to file one or more registration statements on Form S-8 under the Securities Act to register all Common Shares issued or issuable under our Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, Common Shares registered under such registration statements will be available for sale in the open market following the expiration of the applicable lock-up period. We expect that the initial registration statement on Form S-8 will cover approximately 2,000,000 Common Shares. Common Shares issued under our Share Compensation Plan after the effective date of the applicable Form S-8 registration statement will be eligible for resale in the public market without restriction, subject to Rule 144 limitations applicable to affiliates and the lock-up agreements described above.

**Canadian Resale Restrictions**

Any sale of any of our Common Shares which constitutes a "control distribution" under Canadian securities laws (generally a sale by a person or a group of persons holding more than 20% of our outstanding voting securities) will be subject to restrictions under Canadian securities laws in addition to those restrictions noted above, unless the sale is qualified under a prospectus filed with Canadian securities regulatory authorities, or if prior notice of the sale is filed with the Canadian securities regulatory authorities at least seven (7) days before any sale and there has been compliance with certain other requirements and restrictions regarding the manner of sale, payment of commissions, reporting and availability of current public information about us and compliance with applicable Canadian securities laws.

**UNDERWRITING**

ThinkEquity LLC, is acting as the representative of the underwriters of this offering, which we refer to as the Representative. Subject to the terms and conditions of an underwriting agreement entered into between the Company and the Representative (the "Underwriting Agreement"), we have agreed to sell to each underwriter named below and each underwriter named below has severally and not jointly agreed to purchase from us, at the public offering price per share less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of Common Shares listed next to its name in the following table:

---

| | |
|:---|:---|
| **Underwriter** | **Number of Common Shares** |
| ThinkEquity LLC |  |
| Total |  |

---

All of the Common Shares to be purchased by the underwriters will be purchased from us.

The Underwriting Agreement provides that the obligations of the underwriters to pay for and accept delivery of the Common Shares offered by this prospectus are subject to various conditions and representations and warranties, including the approval of certain legal matters by their counsel and other conditions specified in the Underwriting Agreement. The Common Shares are offered by the underwriters, subject to prior sale, when, as and if issued to and accepted by them. The underwriters reserve the right to withdraw, cancel or modify the offer to the public and to reject orders in whole or in part. The underwriters are obligated to take and pay for all of the Common Shares offered by this prospectus if any such Common Shares are taken.

We expect that delivery of the Common Shares will be made against payment therefor on or about , 2022. Under Rule 15c6-1 under the Exchange Act, trades in the secondary market are generally required to settle in two business days, unless the parties to any such trade expressly agree otherwise.

**Over-Allotment Option**

We have granted to the underwriters an option, exercisable no later than 45 calendar days after the closing of this offering, to purchase up to an additional 300,000 Common Shares (15% of the Common Shares sold in this offering) from us to cover over-allotments, if any, at a price per share of Common Shares equal to the public offering price, less the underwriting discounts and commissions. The underwriters may exercise this option only to cover over-allotments made in connection with this offering. If the underwriters exercise this option in whole or in part, then the underwriters will be severally committed, subject to the conditions described in the Underwriting Agreement, to purchase these additional Common Shares. If any additional Common Shares are purchased, the underwriters will offer the additional Common Shares on the same terms as those on which the Common Shares are being offered hereby.

**Discounts, Commissions and Reimbursement**

The Representative has advised us that the underwriters propose to offer the Common Shares to the public at the public offering price per share set forth on the cover page of this prospectus. The underwriters may offer Common Shares to securities dealers at that price less a concession of not more than $ per share. After the initial offering to the public, the public offering price and other selling terms may be changed by the Representative.

The following table summarizes the public offering price, underwriting discounts and commissions and proceeds before expenses to us assuming both no exercise and full exercise by the underwriters of their over-allotment option:

---

| | | | |
|:---|:---|:---|:---|
|  | **Per Share** | **Total Without Over-allotment**<br> **Option** | **Total With**<br> **Over-allotment**<br> **Option** |
| Public offering price | $— |  |  |
| Underwriting discount (7%) | $— |  |  |
| Proceeds, before expenses, to us | $— |  |  |

---

We have paid an expense deposit of $50,000 (the "Advance") to the Representative, which will be applied against the actual out-of-pocket accountable expenses that will be paid by us to the underwriters in connection with this offering and will be reimbursed to us to the extent not incurred.

We have also agreed to reimburse the Representative for all reasonable and actual accountable expenses incurred by the Representative in connection with this offering up to a maximum of $214,500 in the aggregate, including the fees and expenses of the underwriters' legal counsel and any expenses incurred by the Representative in conducting its due diligence, including background checks of our officers and directors, less the Advance previously paid to the Representative.

We estimate the expenses of this offering payable by us, not including underwriting commissions, will be approximately $2.1 million.

***Representatives' Warrants***

We have agreed to issue to the Representative, upon the closing of this offering, warrants to purchase up to an aggregate of 115,000 Common Shares (5% of the Common Shares sold in this offering, including any Common Shares sold upon exercise of the underwriters' over-allotment option). The Representative's Warrants are exercisable at a per share price equal to 125% of the public offering price per share in this offering (excluding the over-allotment option). The Representative's Warrants are exercisable at any time and from time to time, in whole or in part, commencing on the six month anniversary of the effective date of the registration statement of which this prospectus is a part and expiring on the date that is five years following the effective date of the registration statement of which this prospectus is a part.

The Representative's Warrants are deemed underwriter compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(g)(1). The Representative (or permitted assignees under Rule 5110(g)(1)) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of this offering. In addition, the Representative's Warrants provide for registration rights upon request, in certain cases. The demand registration right provided will not be greater than five years from the effective date of this offering in compliance with FINRA Rule 5110(f)(2)(G)(iv). The piggyback registration right provided will not be greater than seven years from the effective date of this offering in compliance with FINRA Rule 5110(f)(2)(G)(v). We will bear all fees and expenses attendant to registering the securities issuable on exercise of the Representative's Warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of Common Shares issuable upon exercise of the Representative's Warrants may be adjusted in certain circumstances including in the event of a stock dividend or our recapitalization, reorganization, merger, or consolidation. However, neither the Representative Warrant exercise price, nor the number of Common Shares underlying such warrants, will be adjusted for issuances of Common Shares by the Company at a price below the exercise price of the Representative's Warrants.

**Lock-up Agreements**

Pursuant to "lock-up" agreements, our directors, officers and any holder of our outstanding Common Shares have agreed, for a period of twelve (12) months from the date of this offering, subject to limited exceptions, without the prior written consent of the Representative, that they will not offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities.

In addition, pursuant to the Underwriting Agreement, we and any of our successors have agreed, for a period of twelve (12) months from the date of the Underwriting Agreement, that each will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise.

**Right of First Refusal**

In addition, for a period of twelve (12) months from the date of the closing of this offering, we agreed to grant to the Representative, an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the Representative's sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings, during such twelve (12) month period for us, or any successor to or any subsidiary of us, on terms agreed to by both us and the Representative. The Representative will have the sole right to determine whether or not any other broker-dealer shall have the right to participate in any such offering and the economic terms of any such participation.

**Indemnification**

We have agreed to indemnify the underwriters against liabilities relating to this offering arising under the Securities Act and the Exchange Act, liabilities arising from breaches of some or all of the representations and warranties contained in the Underwriting Agreement, and to contribute to payments that the underwriters may be required to make for these liabilities.

**Determination of Offering Price**

The public offering price of the securities we are offering was negotiated between us and the Representative based on the trading price of our Common Shares prior to the offering, among other things. Other factors considered in determining the public offering price of the Common Shares include our history and prospects, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

**Other Relationships**

From time to time, certain of the underwriters and/or their affiliates have provided, and may in the future provide, various investment banking and other financial services for us for which services they have received and, may in the future receive, customary fees. In the course of their businesses, the underwriters and their affiliates may actively trade our securities or loans for their own account or for the accounts of customers, and, accordingly, the underwriters and their affiliates may at any time hold long or short positions in such securities or loans.

**Price Stabilization, Short Positions and Penalty Bids**

In connection with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our Common Shares. Specifically, the underwriters may over-allot in connection with this offering by selling more of our Common Shares than are set forth on the cover page of this prospectus. This creates a short position in our Common Shares for its own account. The short position may be either a covered short position or a naked short position. In a covered short position, the number of Common Shares over-allotted by the underwriters is not greater than the number of Common Shares that they may purchase in the over-allotment option. In a naked short position, the number of Common Shares involved is greater than the number of Common Shares in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment option. The underwriters may also elect to stabilize the price of our Common Shares or reduce any short position by bidding for, and purchasing, Common Shares in the open market.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing Common Shares in this offering because the underwriter repurchases the Common Shares in stabilizing or short covering transactions.

Finally, the underwriters may bid for, and purchase, Common Shares in market making transactions, including "passive" market making transactions as described below.

These activities may stabilize or maintain the market price of our Common Shares at a price that is higher than the price that might otherwise exist in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of these activities at any time without notice. These transactions may be effected on the national securities exchange on which our Common Shares are traded, in the over-the-counter market, or otherwise.

**Passive Market Making**

In connection with the offering, the underwriters may engage in passive market making transactions of our Common Shares on NYSE American in accordance with Rule 103 of Regulation M under the Exchange Act during the period before the commencement of offers or sales of our Common Shares and extending through the completion of Separation. A passive market maker must display its bids at a price not in excess of the highest independent bid of the security. However, if all independent bids are lowered below the passive market maker's bid, that bid must be lowered when specified purchase limits are exceeded.

**Electronic Distribution**

This prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters, or by their affiliates. Other than this prospectus in electronic format, the information on any underwriters' website and any information contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

**Selling Restrictions**

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of our Common Shares, or the possession, circulation or distribution of this prospectus or any other material relating to us or our Common Shares in any jurisdiction where action for that purpose is required. Accordingly, our Common Shares may not be offered or sold, directly or indirectly, and this prospectus or any other offering material or advertisements in connection with our Common Shares may be distributed or published, in or from any country or jurisdiction, except in compliance with any applicable rules and regulations of any such country or jurisdiction.

**Offer Restrictions Outside The United States**

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

***Australia***

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.

***China***

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to "qualified domestic institutional investors."

***European Economic Area — Belgium, Germany, Luxembourg and Netherlands***

The information in this document has been prepared on the basis that no offers of securities will be in member states ("Member State") of the European Economic Area (the "EEA") other than:

● to legal entities that are qualified investors as defined in the Prospectus Regulation;

● to fewer than 150 natural or legal persons (other than qualified investors within the meaning of the Prospectus Regulation) subject to obtaining the prior consent of our company or any underwriter for any such offer; or

● in any other circumstances falling within Article 1(4) of the Prospectus Regulation, provided that no such offer of securities shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

This prospectus has been prepared on the basis that any offer of Common Shares in any Member State of the EEA will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that Member State of Common Shares which are the subject of the offering contemplated in this prospectus supplement may only do so in circumstances in which no obligation arises for the Company or any of the Representatives to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation, in each case, in relation to such offer. Neither the Company nor the Representatives have authorized, nor do they authorize, the making of any offer of Common Shares in circumstances in which an obligation arises for the Company or the Representatives to publish a prospectus for such offer.

For the purposes of this provision, the expression an "offer of Common Shares to the public" in relation to any Common Shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Common Shares to be offered so as to enable an investor to decide to purchase or subscribe the Common Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Regulation in that Member State, the expression "Prospectus Regulation" means Regulation (EU) 2017/1129.

The above selling restriction is in addition to any other selling restrictions set out below.

***Notice to Prospective Investors in the United Kingdom***

In relation to the United Kingdom, no offer of Common Shares which are the subject of the offering has been, or will be made to the public in the United Kingdom, other than:

&nbsp;&nbsp;&nbsp;&nbsp;(a) to
 any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation (as defined below);

(b) to
 fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation)
 in the United Kingdom subject to obtaining the prior consent of Representatives for any such offer; or

(c) in
 any other circumstances falling within section 86 of the FSMA,

provided that no such offer of Common Shares shall require us or any underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

In the United Kingdom, this prospectus is not a prospectus for the purposes of the UK Prospectus Regulation (as defined below). This prospectus has been prepared on the basis that any offer of Common Shares in the United Kingdom will be made pursuant to an exemption under the UK Prospectus Regulation from the requirement to publish a prospectus for offers of Common Shares. Accordingly any person making or intending to make an offer in the United Kingdom of Common Shares which are the subject of the offering contemplated in this prospectus supplement may only do so in circumstances in which no obligation arises for the us or any of the underwriters to publish a prospectus pursuant to Article 3 of the UK Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation, in each case, in relation to such offer. Neither us nor the underwriters have authorized, nor do they authorize, the making of any offer of Common Shares in circumstances in which an obligation arises for us or the underwriters to publish or supplement a prospectus for such offer.

For the purposes of this provision, the expression an "offer of Common Shares to the public" in relation to any Common Shares in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and the Common Shares to be offered so as to enable an investor to decide to purchase or subscribe the Common Shares, as the same may be varied in United Kingdom by any measure implementing the UK Prospectus Regulation, the expression "UK Prospectus Regulation" means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

The communication of prospectus and any other document or materials relating to the issue of the Common Shares offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000, as amended (the "FSMA"). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.

Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Common Shares may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to us.

All applicable provisions of the FSMA must be complied with in respect to anything done by any person in relation to the Common Shares, from or otherwise involving the United Kingdom.

***France***

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers, or AMF. The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to be distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d'investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

***Ireland***

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005, or the Prospectus Regulations. The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

***Israel***

The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority, or the ISA, nor have such securities been registered for sale in Israel. The Common Shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with this offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.

***Italy***

The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa), or CONSOB, pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy, other than:

● to Italian qualified investors, or Qualified Investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999, or Regulation no. 1197l, as amended; and

● in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

● made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No.58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and

● in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.

***Japan***

The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended, or the FIEL, pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.

***Portugal***

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission for approval in Portugal and, accordingly, may not be distributed or caused to be distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are "qualified investors" (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

***Sweden***

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are "qualified investors" (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

***Switzerland***

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority.

This document is personal to the recipient only and not for general circulation in Switzerland.

***United Arab Emirates***

Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the securities, including the receipt of applications and/or the allotment or redemption of such shares, may be rendered within the United Arab Emirates by us.

No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.

***Canada***

The securities may be sold in Canada only to purchasers, purchasing, or deemed to be purchasing, as principal, that are accredited investors, as defined in National Instrument 45-106 *Prospectus Exemptions* or subsection 73.3(1) of the Securities Act (Ontario). Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable Canadian securities laws. Canadian purchasers should refer to any applicable provisions of the securities legislation of their province or territory for particulars of these rights or consult with a legal advisor.

**LEGAL MATTERS**

Certain legal matters in connection with the offering relating to U.S. law will be passed upon by Loeb & Loeb LLP, New York, New York. The validity of the issuance of the Common Shares offered hereby and other legal matters in connection with the offering relating to Canadian law will be passed upon by Gowling WLG (Canada) LLP. The underwriters in this offering are being represented by Sullivan & Worcester LLP relating to U.S. law and Tingle Merrett LLP relating to Canadian law.

**EXPERTS**

The combined financial statements as of December 31, 2021 and December 31, 2020 and for each of the two years in the period ended December 31, 2021 included in this registration statement have been so included in reliance on the report of Haskell & White LLP, an independent registered public accounting firm, appearing elsewhere herein, given on the authority of said firm as experts in auditing and accounting.

**WHERE YOU CAN FIND ADDITIONAL INFORMATION**

We have filed this Registration Statement under the Securities Act with the SEC, for the Common Shares of the Company being sold. The registration statement, including exhibits and schedules filed therewith, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, NE, Washington DC 20549. You may obtain information on the operation of the public reference facilities by contacting the SEC at 1-800-SEC-0330. Copies of such materials may be obtained at prescribed rates by writing to the SEC. The SEC also maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.

The Company is subject to the informational requirements of the Exchange Act. In accordance therewith, we file reports, proxy and information statements and other information with the SEC. Such reports, proxy and information statements and other information can be inspected and copied at the address set forth above. We intend to furnish our shareholders with annual reports containing financial statements audited by our independent accountants and quarterly reports for the first three quarters of each fiscal year containing unaudited summary financial information.

As a result of the offering, we will be required to file periodic reports and other information with the SEC. We also maintain an Internet site at www.strong-entertainment.com. Our website and the information contained therein or connected thereto shall not be deemed to be incorporated into this prospectus or the registration statement of which it forms a part.

You may also contact the Company at 5960 Fairview Road, Suite 275, Charlotte, NC 28210, or via telephone at (704) 471-6784.

**Strong Global Entertainment**

**Index to Financial Statements**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm](#as_002) | F-2 |
| Combined Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;[Combined Balance Sheets as of December 31, 2021 and December 31, 2020](#al_002) | F-3 |
| &nbsp;&nbsp;&nbsp;[Combined Statements of Income for the Years Ended December 31, 2021 and December 31, 2020](#al_003) | F-4 |
| &nbsp;&nbsp;&nbsp;[Combined Statements of Comprehensive Income for the Years Ended December 31, 2021 and December 31, 2020](#al_004) | F-5 |
| &nbsp;&nbsp;&nbsp;[Combined Statements of Equity for the Years Ended December 31, 2021 and December 31, 2020](#al_005) | F-6 |
| &nbsp;&nbsp;&nbsp;[Combined Statements of Cash Flows for the Years Ended December 31, 2021 and December 31, 2020](#al_006) | F-7 |
| &nbsp;&nbsp;&nbsp;[Notes to Combined Financial Statements](#al_007) | F-8 – F-24 |
| &nbsp;&nbsp;&nbsp;[Unaudited Combined Balance Sheets as of September 30, 2022 and December 31, 2021](#ar_001) | F-25 |
| &nbsp;&nbsp;&nbsp;[Unaudited Combined Statements of Operations for the Nine Months Ended September 30, 2022 and September 30, 2021](#ar_002) | F-26 |
| &nbsp;&nbsp;&nbsp;[Unaudited Combined Statements of Comprehensive (Loss) Income for the Nine Months Ended September 30, 2022 and September 30, 2021](#ar_003) | F-27 |
| &nbsp;&nbsp;&nbsp;[Unaudited Combined Statements of Equity for the Nine Months Ended September 30, 2022 and September 30, 2021](#ar_004) | F-28 |
| &nbsp;&nbsp;&nbsp;[Unaudited Combined Statements of Cash Flows for the Nine Months Ended September 30, 2022 and September 30, 2021](#ar_005) | F-29 |
| &nbsp;&nbsp;&nbsp;[Notes to Unaudited Combined Financial Statements](#ar_006) | F-30 – F-41 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholder and Board of Directors

Strong Global Entertainment, Inc.

***Opinion on the Financial Statements***

We have audited the accompanying combined balance sheets of Strong Global Entertainment (the "Company") as of December 31, 2021 and 2020, the related combined statements of income, comprehensive income, equity, and cash flows for each of the years then ended, and the related notes (collectively, the "combined financial statements"). In our opinion, the combined financial statements present fairly, in all material respects, the combined financial position of the Company as of December 31, 2021 and 2020, and the combined results of its operations and its cash flows for each of the years then ended, in conformity with U.S. generally accepted accounting principles.

***Emphasis of Matter – Combined Financial Statements***

As discussed in Note 1, the combined financial statements of the Company reflect the business assets, liabilities, revenue and expenses directly attributable to Strong/MDI Screen Systems, Inc. and Strong Technical Services, Inc., which currently operate as an operating segment of Ballantyne Strong, Inc. The combined financial statements also reflect allocations deemed reasonable by management to present the combined financial position, results of operations, changes in equity and cash flows of the Company on a stand-alone basis and do not necessarily reflect the combined financial position, results of operations, changes in equity and cash flows of the Company in the future or what they would have been had the Company been a separate, stand-alone entity during the periods presented.

***Basis for Opinion***

These combined financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's combined financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the combined financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the combined financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that our audits provide a reasonable basis for our opinion.

---

| | |
|:---|:---|
|  | */s/ Haskell & White LLP* |
|  | HASKELL & WHITE LLP |
| We have served as the Company's auditor since 2021. |  |
| Irvine, California |  |
| April 6, 2022, except for Note 15, as to which the date is May 2, 2022 |  |

---

**Strong Global Entertainment**

**Combined Balance Sheets**

**(In thousands)**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2020** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $4494 | $3355 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 4631 | 5580 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 3272 | 2264 |
| &nbsp;&nbsp;&nbsp;Other current assets | 3266 | 1035 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 15663 | 12234 |
| Property, plant and equipment, net | 5207 | 5364 |
| Operating lease right-of-use assets | 299 | 77 |
| Finance lease right-of-use assets |  | 4 |
| Intangible assets, net | 69 | 279 |
| Goodwill | 942 | 938 |
| Other assets | 19 | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $22199 | $18925 |
| **Liabilities and Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $3996 | $1696 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 2683 | 1470 |
| &nbsp;&nbsp;&nbsp;Short-term debt | 2998 | 3299 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 23 |  |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease obligations | 63 | 96 |
| &nbsp;&nbsp;&nbsp;Current portion of finance lease obligations |  | 3 |
| &nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | 2557 | 914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 12320 | 7478 |
| Long-term debt, net of current portion | 105 |  |
| Operating lease obligations, net of current portion | 298 | 15 |
| Deferred income taxes | 655 | 706 |
| Other long-term liabilities | 11 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 13389 | 8293 |
| Commitments, contingencies and concentrations (Notes 11, 12 and 13) |  |  |
| Equity: |  |  |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (3628) | (3829) |
| &nbsp;&nbsp;&nbsp;Net parent investment | 12438 | 14461 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 8810 | 10632 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and equity | $22199 | $18925 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Income**

**(In thousands)**

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** |
| Net product sales | $19631 | $15987 |
| Net service revenues | 6341 | 4833 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenues | 25972 | 20820 |
| Cost of products sold | 14078 | 10980 |
| Cost of services | 4526 | 5193 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenues | 18604 | 16173 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 7368 | 4647 |
| Selling and administrative expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Selling | 1781 | 1656 |
| &nbsp;&nbsp;&nbsp;Administrative | 4387 | 4312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total selling and administrative expenses | 6168 | 5968 |
| Loss on disposal of assets | - | (33) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from operations | 1200 | (1354) |
| Other (expense) income: |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (107) | (112) |
| &nbsp;&nbsp;&nbsp;Foreign currency transaction loss | (65) | (292) |
| &nbsp;&nbsp;&nbsp;Other income, net | 153 | 3129 |
| &nbsp;&nbsp;&nbsp;Total other income (expense) | (19) | 2725 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 1181 | 1371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax (expense) benefit | (360) | 74 |
| &nbsp;&nbsp;&nbsp;Net income | $821 | $1445 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Comprehensive Income**

**(In thousands)**

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** |
| Net income | $821 | $1445 |
| Currency translation adjustment: |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized net change arising during period | 201 | 670 |
| Total other comprehensive income | 201 | 670 |
| Comprehensive income | $1022 | $2115 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Equity**

**Years Ended December 31, 2021 and 2020**

**(In thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Accumulated**<br> **Other Comprehensive Loss** | **Net Parent Investment** | **Total** |
| Balance at December 31, 2019 | $(4499) | $16293 | $11794 |
| Net income |  | 1445 | 1445 |
| Net other comprehensive income | 670 |  | 670 |
| Stock-based compensation expense |  | 232 | 232 |
| Net transfer to parent | - | (3509) | (3509) |
| Balance at December 31, 2020 | (3829) | 14461 | 10632 |
| Net income |  | 821 | 821 |
| Net other comprehensive income | 201 |  | 201 |
| Stock-based compensation expense |  | 175 | 175 |
| Net transfer to parent | - | (3019) | (3019) |
| Balance at December 31, 2021 | $(3628) | $12438 | $8810 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Cash Flows** 

**(In thousands)**

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $821 | $1445 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Recovery of) provision for doubtful accounts | (263) | 588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for obsolete inventory | 95 | 151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for (benefit from) warranty reserve | 141 | (28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 906 | 870 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and accretion of operating leases | 72 | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of assets |  | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on business interruption claim settlement |  | (808) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 54 | 204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 175 | 232 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 1221 | 1414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (1095) | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current income taxes | (54) | 212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (2110) | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 3437 | (312) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | 1637 | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease obligations | (98) | (73) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 4831 | 4023 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | (394) | (467) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (394) | (467) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of short-term debt |  | 389 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on short-term debt | (315) | (233) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowing under credit facility |  | 5158 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of borrowings under credit facility |  | (5158) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash transferred to parent | (3019) | (3509) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (3334) | (3353) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash and cash equivalents | 36 | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in cash and cash equivalents | 1139 | 256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at beginning of year | 3355 | 3099 |
| Cash and cash equivalents at end of year | $4494 | $3355 |
| Supplemental disclosure of cash paid for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $107 | $112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $215 | $405 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Notes to the Combined Financial Statements**

**1. Business Description and Basis of Presentation**

***Business Description***

Strong Global Entertainment, Inc. ("Strong Global Entertainment," or the "Company") combines the operating assets and liabilities of Strong/MDI Screen Systems, Inc. ("Strong/MDI"), a leading premium screen and projection coatings supplier in the world, and Strong Technical Services, Inc. ("STS"), which provides comprehensive managed service offerings with 24/7/365 support nationwide to ensure solution uptime and availability.

The Company currently operates as an operating segment of Ballantyne Strong, Inc. ("Ballantyne"), as discussed in the *Basis of Presentation* below. On July 29, 2021, Ballantyne announced that its board of directors had approved the pursuit of a separation of its Strong Global Entertainment business segment from Ballantyne. Ballantyne announced that the separation was expected to be effected through an initial public offering (the "Offering") of newly issued common shares of Strong Global Entertainment, Inc. Ballantyne intends to remain the majority shareholder of the subsidiary post-offering.

***Basis of Presentation***

The combined financial statements of Strong Global Entertainment have been derived from the consolidated financial statements and accounting records of Ballantyne as if Strong Global Entertainment had operated on a stand-alone basis during the periods presented and were prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and pursuant to the regulations of the U.S. Securities and Exchange Commission ("SEC"). Historically, Strong Global Entertainment was reported as an operating segment within Ballantyne's reportable segments and did not operate as a stand-alone company. Accordingly, Ballantyne historically reported the financial position and the related results of operations, cash flows and changes in equity of Strong Global Entertainment as a component of Ballantyne's consolidated financial statements.

The combined financial statements are presented as if Strong Global Entertainment had been carved out of Ballantyne for all periods presented. Prior to the completion of the Offering, certain assets and liabilities presented will transfer to Strong Global Entertainment at carry-over (historical cost) basis.

Cash and cash equivalents are managed through bank accounts legally owned by Ballantyne as well as accounts owned by STS and Strong/MDI. Accordingly, cash and cash equivalents held by Ballantyne at the corporate level were not attributable to Strong Global Entertainment for any of the periods presented. Only cash amounts in accounts legally owned by entities dedicated to the Strong Global Entertainment business are reflected in the combined balance sheets. Ballantyne manages cash on a centralized basis and routinely transfers cash to and from its operating subsidiaries to maintain target cash levels and fund disbursements. Transfers of cash, both to and from Ballantyne, are reflected as a component of Net parent investment in the combined balance sheets and as financing activities on the accompanying combined statements of cash flows.

As the operations that comprise Strong Global Entertainment were not historically held by a single legal entity, total Net parent investment is shown in lieu of equity in the combined financial statements. Balances between Strong Global Entertainment and Ballantyne that were not historically cash settled are included in Net parent investment. Net parent investment represents Ballantyne's interest in the recorded net assets of Strong Global Entertainment and represents the cumulative investment by Ballantyne in Strong Global Entertainment through the dates presented, inclusive of operating results.

The operating results of Strong Global Entertainment have historically been disclosed as a reportable segment within the consolidated financial statements of Ballantyne enabling identification of directly attributable transactional information, functional departments and headcount. The combined balance sheets were primarily derived by reference to one, or a combination, of Strong Global Entertainment transaction-level information, functional department or headcount. Revenue and Cost of revenue were derived from transactional information specific to Strong Global Entertainment products and services. Directly attributable operating expenses were derived from activities relating to Strong Global Entertainment functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from Ballantyne. The allocated costs for corporate functions included, but were not limited to, executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Strong Global Entertainment level. These costs were allocated on a basis of revenue, headcount or other measures Strong Global Entertainment has determined as reasonable.

Strong Global Entertainment employees also historically participated in Ballantyne's stock-based incentive plans, in the form of restricted stock units ("RSUs") and stock options issued pursuant to Ballantyne's employee stock purchase plan. Stock-based compensation expense has been directly reported by Strong Global Entertainment based on the awards and terms previously granted to Ballantyne's employees.

Allocations for management costs and corporate support services provided to Strong Global Entertainment totaled $1.1 million and $1.4 million for the years ended December 31, 2021 and December 31, 2020, respectively, all of which is included in administrative expenses. Strong Global Entertainment expects to incur additional expenses as a stand-alone publicly traded company. It is not practicable to estimate actual costs that would have been incurred had Strong Global Entertainment been a stand-alone company during the periods presented.

The management of Strong Global Entertainment believes the assumptions underlying the combined financial statements, including the assumptions regarding the allocated expenses, reasonably reflect the utilization of services provided, or the benefit received by, Strong Global Entertainment during the periods presented. Nevertheless, the combined financial statements may not be indicative of Strong Global Entertainment's future performance, do not necessarily include all of the actual expenses that would have been incurred had Strong Global Entertainment been an independent entity during the historical periods and may not reflect the results of operations, financial position, and cash flows had Strong Global Entertainment been a stand-alone company during the periods presented.

During the periods presented in the combined financial statements, the operations of Strong Global Entertainment are included in the consolidated U.S. federal, and certain state and local and foreign income tax returns filed by Ballantyne, where applicable. Income tax expense and other income tax related information contained in the combined financial statements are presented on a separate return basis as if Strong Global Entertainment had filed its own tax returns. The income taxes of Strong Global Entertainment as presented in the combined financial statements may not be indicative of the income taxes that Strong Global Entertainment will generate in the future. Additionally, certain tax attributes such as net operating losses or credit carryforwards are presented on a separate return basis, and accordingly, may differ in the future. In jurisdictions where Strong Global Entertainment has been included in the tax returns filed by Ballantyne, any income tax receivables resulting from the related income tax provisions have been reflected in the balance sheet within Net parent investment.

Net income per share data has not been presented in the combined financial statements because Strong Global Entertainment did not operate as a separate legal entity with its own capital structure during the periods presented.

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year.

The preparation of these combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.

**2. Summary of Significant Accounting Policies**

***Revenue Recognition***

The Company accounts for revenue using the following steps:

● Identify the contract, or contracts, with a customer;

● Identify the performance obligations in the contract;

● Determine the transaction price;

● Allocate the transaction price to the identified performance obligations; and

● Recognize revenue when, or as, the Company satisfies the performance obligations.

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine whether they are distinct, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.

As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company typically does not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when the Company invoices clients, or receives cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation.

The Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of December 31, 2021 or December 31, 2020.

***Screen system sales***

The Company typically recognizes revenue on the sale of its screen systems when control of the screen is transferred to the customer, usually at the time of shipment. However, revenue is recognized upon delivery for certain international shipments with longer shipping transit time because control does not transfer to the customer until delivery. For contracts that are long-term in nature, the Company believes that the use of the percentage-of-completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues, and contract costs. Under the percentage-of-completion method, revenue is recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer.

***Digital equipment sales***

The Company recognizes revenue on sales of digital equipment when the control of the equipment is transferred, which occurs at the time of shipment from the Company's warehouse or drop-shipment from a third party. The Company typically records revenue for drop-shipment orders on a gross basis as the Company (i) is responsible for fulfilling the order, (ii) has inventory risk, (iii) would be the recipient of any returned items and (iv) has discretion over pricing. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer.

***Field maintenance and monitoring services***

The Company sells service contracts that provide maintenance and monitoring services to its customers. These contracts are generally 12 months in length. Revenue related to service contracts is recognized ratably over the term of the agreement.

In addition to selling service contracts, the Company also performs discrete time and materials-based maintenance and repair work for its customers. Revenue related to time and materials-based maintenance and repair work is recognized at the point in time when the performance obligation has been fully satisfied.

***Installation services***

The Company performs installation services for its customers and recognizes revenue upon completion of the installations.

***Extended warranty sales***

The Company sells extended warranties to its customers. Typically, the Company is the primary obligor, and revenue is recognized on a gross basis ratably over the term of the extended warranty.

***Cash and Cash Equivalents***

All short-term, highly liquid financial instruments are classified as cash equivalents in the combined balance sheets and statements of cash flows. Generally, these instruments have maturities of three months or less from date of purchase. As of December 31, 2021, $2.4 million of the $4.5 million in cash and cash equivalents was in Canada, and the remaining $2.1 million was in the U.S.

***Accounts Receivable***

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt expense to be adjusted accordingly. The accounts receivable balances on the combined balance sheets are net of an allowance for doubtful accounts of $0.5 million and $0.9 million as of December 31, 2021 and 2020, respectively. Past due accounts are written off when our efforts have been unsuccessful in collecting amounts due.

***Inventories***

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Inventories include appropriate elements of material, labor and manufacturing overhead. Inventory balances are net of reserves on slow moving or obsolete inventory. The Company reviews its inventory on hand on an item-by-item basis for obsolete or slow moving inventory. The Company's management considers various factors to estimate each item's net realizable value including recent sales history, industry trends, customer demand, and technological developments. In instances where net realizable is deemed to be lower than cost, the Company decreases the value of that inventory to the estimated net realizable value.

The following table details a roll-forward of the inventory reserve during 2021 (in thousands):

---

| | |
|:---|:---|
| Inventory reserve balance at December 31, 2020 | $387 |
| Inventory write-offs during 2021 | (15) |
| Provision for inventory reserve during 2021 | 95 |
| Inventory reserve balance at December 31, 2021 | $467 |

---

***Business Combinations***

The Company uses the acquisition method of accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions, the Company normally obtains the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

***Intangible Assets***

The Company's intangible assets consist primarily of costs incurred to develop or obtain software, as well as costs incurred for upgrades and enhancements resulting in new or enhanced functionality. The Company evaluates its intangible assets for impairment when events or circumstances indicate that the carrying amount of these assets may not be recoverable. Intangible assets with definite lives are amortized over their respective estimated useful lives to their estimated residual values. Significant judgments and assumptions are required in the impairment evaluations and in estimating useful lives.

***Goodwill***

Goodwill is not amortized and is tested for impairment at least annually, or whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. The annual impairment test is performed as of December 31 each year. Significant judgment is involved in determining if an indicator of impairment has occurred. The Company may consider indicators such as deterioration in general economic conditions, adverse changes in the markets in which the reporting unit operates, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill.

The Company may first review for goodwill impairment by assessing qualitative factors to determine whether any impairment may exist. For a reporting unit in which the Company concludes, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount (or if the Company elects to skip the optional qualitative assessment), the Company is required to perform a quantitative impairment test, which includes measuring the fair value of the reporting unit and comparing it to the reporting unit's carrying amount. If the fair value of a reporting unit exceeds its carrying value, the goodwill of the reporting unit is not impaired. If the carrying value of a reporting unit exceeds its fair value, the Company must record an impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit.

Goodwill was recorded in connection with the acquisition of Peintures Elite, Inc. in 2013. A qualitative assessment was performed as of December 31, 2021 and it was determined that no events had occurred that would indicate an impairment was more likely than not.

***Property, Plant and Equipment***

Significant expenditures for the replacement or expansion of property, plant and equipment are capitalized. Depreciation of property, plant and equipment is provided over the estimated useful lives of the respective assets using the straight-line method. For financial reporting purposes, assets are depreciated over the estimated useful lives of 20 years for buildings and improvements, the lesser of the lease term or the estimated useful life for leasehold improvements, three to ten years for machinery and equipment, seven years for furniture and fixtures and three years for computers and accessories. The Company generally uses accelerated methods of depreciation for income tax purposes. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of property, plant and equipment is based on management's estimates of future undiscounted cash flows and these estimates may vary due to a number of factors, some of which may be outside of management's control. To the extent that the Company is unable to achieve management's forecasts of future income, it may become necessary to record impairment losses for any excess of the net book value of property, plant and equipment over their fair value.

The Company incurs maintenance costs on all of its major equipment. Repair and maintenance costs are expensed as incurred.

***Income Taxes***

Income taxes are accounted for under the asset and liability method. The Company uses an estimate of its annual effective rate at each interim period based on the facts and circumstances at the time while the actual effective rate is calculated at year-end. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing whether the deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company's uncertain tax positions are evaluated in a two-step process, whereby 1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and 2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The Company accrues interest and penalties related to uncertain tax positions in the combined statements of operations as income tax expense.

***Other Taxes***

Sales taxes assessed by governmental authorities, including sales, use and excise taxes, are recorded on a net basis. Such taxes are excluded from revenues and are shown as a liability on the balance sheet until remitted to the appropriate taxing authorities.

***Research and Development***

Research and development related costs are charged to operations in the period incurred. Such costs amounted to $0.2 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively, and are included within administrative expenses on the combined statements of income.

***Advertising Costs***

Advertising and promotional costs are expensed as incurred and amounted to approximately $0.1 million and $50,000 for the years ended December 31, 2021 and 2020, respectively, and are included within selling expenses on the combined statements of income.

***Stock Compensation Plans***

The Company's employees have historically participated in Ballantyne's stock-based compensation plans. Stock-based compensation expense has been allocated to the Company based on the awards and terms previously granted to the Ballantyne's employees. The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to RSUs is based on the closing fair market value of Ballantyne's common stock on the date of grant.

The Company recognizes compensation expense for all stock-based payment awards based on estimated fair values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company has historically issued shares upon exercise of stock options or vesting of restricted stock from new stock issuances. The Company estimates the fair value of restricted stock awards based upon the closing market price of the underlying Common Shares on the date of grant. The fair value of stock options granted is calculated using the Black-Scholes option pricing model. No stock-based compensation cost was capitalized as a part of inventory in 2021 and 2020.

***Fair Value of Financial and Derivative Instruments***

Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Level
 1 — inputs
 to the valuation techniques are quoted prices in active markets for identical assets or liabilities

● Level
 2 — inputs
 to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly

● Level
 3 — inputs
 to the valuation techniques are unobservable for the assets or liabilities

The following tables present the Company's financial assets and liabilities measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 31, 2021 and 2020.

Fair values measured on a recurring basis at December 31, 2021 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Cash and cash equivalents | $4494 | $- | $- | $4494 |
| Notes receivable | - | - | - | - |
| Total | $4494 | $- | $- | $4494 |

---

Fair values measured on a recurring basis at December 31, 2020 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Cash and cash equivalents | $3355 | $- | $- | $3355 |
| Notes receivable | - | - | - | - |
| Total | $3355 | $- | $- | $3355 |

---

During 2011, the Company entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of digital projection equipment. In order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. In 2019, in connection with the Company's review of the debtor's financial statements and changes in the underlying trend of historical and projected cash flows available to service the notes, the Company determined that it was unlikely that the Company would receive any cash from settlement of the note receivable and reduced the carrying value of the notes receivable to zero. There have been no changes to the carrying value of the notes receivable since 2019.

The Company's short-term debt is recorded at historical cost. The carrying values of all other financial assets and liabilities, including accounts receivable, accounts payable, and short-term debt reported in the combined balance sheets equal or approximate their fair values due to the short-term nature of these instruments.

All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment).

***Net parent investment***

Net parent investment on the combined balance sheets represents Ballantyne's historical investment in Strong Global Entertainment, and the net effect of transactions with, and allocations from, Ballantyne.

***Foreign Currency Translation***

For Strong/MDI, the environment in which the business conducts operations is considered the functional currency, generally the local currency, which is the Canadian dollar. The assets and liabilities of Strong/MDI are translated into the United States dollar at the foreign exchange rates in effect at the end of the period. Revenue and expenses of Strong/MDI are translated using an average of the foreign exchange rates in effect during the period. Translation adjustments are not included in determining net earnings but are presented in comprehensive loss within the combined statements of comprehensive income. Transaction gains and losses that arise from foreign exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the combined statements of income as incurred. If the Company disposes of its investment in a foreign entity, any gain or loss on currency translation balance recorded in accumulated other comprehensive income would be recognized as part of the gain or loss on disposition.

***Warranty Reserves***

In most instances, digital products sold to customers are covered by the manufacturing firm's warranty; however, for certain customers, the Company may grant warranties in excess of the manufacturer's warranty. In addition, the Company provides warranty coverage on screens it manufactures. The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the years ended December 31 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **2021** | **2020** |
| Warranty accrual at beginning of year | $79 | $169 |
| &nbsp;&nbsp;&nbsp;Charged to expense | 141 | (28) |
| &nbsp;&nbsp;&nbsp;Claims, net of recoveries | (85) | (62) |
| &nbsp;&nbsp;&nbsp;Foreign currency adjustment | 1 | - |
| Warranty accrual at end of year | $136 | $79 |

---

***Contingencies***

The Company accrues for contingencies when its assessments indicate that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company's estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results may differ from the Company's estimates, resulting in an impact, positive or negative, on earnings.

***Recently Adopted Accounting Pronouncements***

In December 2019, the Financial Account Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU removes certain exceptions for investments, intraperiod allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. The effective date of the standard is annual periods beginning after December 15, 2020, with early adoption permitted. The various amendments in the standard are applied on a retrospective basis, modified retrospective basis and prospective basis, depending on the amendment. The Company early adopted this ASU effective January 1, 2020. The adoption did not have a material impact on the Company's combined financial statements.

In January 2020, the FASB issued ASU 2020-01, "Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815." This ASU clarifies the interaction between accounting standards related to equity securities, equity method investments and certain derivatives. The effective date of the standard is annual periods beginning after December 15, 2020, and interim periods within those fiscal years. The adoption did not have a material impact on the Company's combined financial statements.

In April 2020, the FASB issued a question-and-answer document to address stakeholder questions on the application of the lease accounting guidance for lease concessions related to the effects of the COVID-19 pandemic. The guidance allows concessions related to the timing of payments, where the total consideration has not changed, to not be accounted for as lease modifications. Instead, any such concessions can be accounted for as if no change was made to the contract or as variable lease payments. As a result of the COVID-19 pandemic, the Company received certain lease concessions in the form of rent deferrals during 2020. The Company chose to implement the policy election provided by the FASB to record rent concessions as if no modifications to lease contracts were made, and thus no changes to the lease obligations were recorded in respect to these concessions. As of December 31, 2021, the Company did not have any deferred rent outstanding.

***Recently Issued Accounting Pronouncements***

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This ASU will require the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance was initially effective for the Company for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10, "Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates," which, among other things, defers the effective date of ASU 2016-13 for public filers that are considered smaller reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted. The Company believes the adoption of this ASU will not significantly impact its results of operations and financial position.

**3. Revenue**

The following tables disaggregate the Company's revenue by major source for the years ended December 31, 2021 and December 31, 2020 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Screen system sales | $9292 | $8929 |
| Digital equipment sales | 8264 | 5174 |
| Extended warranty sales | 250 | 466 |
| Other product sales | 1825 | 1418 |
| Total product sales | 19631 | 15987 |
| Field maintenance and monitoring services | 5198 | 3954 |
| Installation services | 987 | 728 |
| Other service revenues | 156 | 151 |
| Total service revenues | 6341 | 4833 |
| &nbsp;&nbsp;&nbsp;Total | $25972 | $20820 |

---

The following tables disaggregate the Company's revenue by the timing of transfer of goods or services to the customer for the years ended December 31, 2021 and December 31, 2020 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Point in time | $22304 | $17405 |
| Over time | 3668 | 3415 |
| &nbsp;&nbsp;&nbsp;Total | $25972 | $20820 |

---

At December 31, 2021, the unearned revenue amount associated with maintenance and monitoring services and extended warranty sales in which the Company is the primary obligor was $0.8 million, all of which is expected to be recognized during 2022. The amount expected to be recorded during 2022 includes $0.4 million related to long-term projects that the Company's uses the percentage-of-completion method to recognize revenue.

**4. Inventories**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2020** |
| Raw materials and components | $1680 | $1584 |
| Work in process | 399 | 141 |
| Finished goods | 1193 | 539 |
|  | $3272 | $2264 |

---

The inventory balances are net of reserves of approximately $0.5 million and 0.4 million as of December 31, 2021 and December 31, 2020, respectively. The inventory reserves primarily related to the Company's finished goods inventory. A rollforward of the inventory reserve for 2021 is provided in Note 2.

**5. Property, Plant and Equipment**

Property, plant and equipment include the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2020** |
| Land | $51 | $51 |
| Buildings and improvements | 6760 | 6681 |
| Machinery and other equipment | 4848 | 4636 |
| Office furniture and fixtures | 686 | 769 |
| Construction in progress | 376 | 154 |
| Total property, plant and equipment, cost | 12721 | 12291 |
| Less: accumulated depreciation | (7514) | (6927) |
| Net property, plant and equipment | $5207 | $5364 |

---

Depreciation expense approximated $0.6 million and $0.7 million during the years ended December 31, 2021 and December 31, 2020, respectively.

**6. Intangible Assets**

Intangible assets consisted of the following at December 31, 2021 (dollars in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Useful**<br> **life** | **Gross** | **Accumulated Amortization** | **Net** |
|  | (Years) | | | |
| Software in service | 5 | $778 | $(726) | $52 |
| Product formulation | 10 | 482 | (465) | 17 |
| Total |  | $1260 | $(1191) | $69 |

---

Intangible assets consisted of the following at December 31, 2020 (dollars in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Useful**<br> **life** | **Gross** | **Accumulated Amortization** | **Net** |
|  | (Years) | | | |
| Software in service | 5 | $723 | $(477) | $246 |
| Product formulation | 10 | 477 | (444) | 33 |
| Total |  | $1200 | $(921) | $279 |

---

Intangible assets with definite lives are amortized over their useful lives. The Company recorded amortization expense relating to intangible assets of $0.3 million and $0.2 million during the years ended December 31, 2021 and December 31, 2020, respectively.

The following table shows the Company's estimated future amortization expense related to intangible assets currently subject to amortization for the next five years (in thousands):

---

| | |
|:---|:---|
| 2022 | $63 |
| 2023 | 6 |
| 2024 |  |
| 2026 |  |
| 2026 |  |
| Thereafter | - |
| Total | $69 |

---

**7. Goodwill**

The following represents a summary of changes in the Company's carrying amount of goodwill (in thousands):

---

| | |
|:---|:---|
| Balance as of December 31, 2020 | $938 |
| Foreign currency translation adjustment | 4 |
| Balance as of December 31, 2021 | $942 |

---

**8. Accrued Expenses and Other Long-Term Liabilities**

The major components of current accrued expenses are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2020** |
| Employee-related | $1366 | $1134 |
| Warranty obligation | 136 | 79 |
| Interest and taxes | 324 | 69 |
| Legal and professional fees | 473 | 57 |
| Other | 384 | 131 |
| Total | $2683 | $1470 |

---

The major components of other long-term liabilities are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2020** |
| Deferred revenue | $11 | $15 |
| Deferred payroll taxes | - | 79 |
| &nbsp;&nbsp;&nbsp;Total | $11 | $94 |

---

**9. Income Taxes and other Taxes**

Income before income taxes consists of (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** |
| United States | $612 | $(2090) |
| Foreign | 569 | 3461 |
| &nbsp;&nbsp;&nbsp;Total | $1181 | $1371 |

---

Income tax expense (benefit) consists of (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** |
| Federal: |  |  |
| &nbsp;&nbsp;&nbsp;Current | $266 | $(702) |
| &nbsp;&nbsp;&nbsp;Deferred | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 266 | (702) |
| State: |  |  |
| &nbsp;&nbsp;&nbsp;Current | 4 | 24 |
| &nbsp;&nbsp;&nbsp;Deferred | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 4 | 24 |
| Foreign: |  |  |
| &nbsp;&nbsp;&nbsp;Current | 163 | 582 |
| &nbsp;&nbsp;&nbsp;Deferred | (73) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 90 | 604 |
| Total | $360 | $(74) |

---

Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal income tax rate to pretax income as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2021** | **2020** |
| Expected federal income tax provision | $248 | $288 |
| State income taxes, net of federal benefit | 3 | 19 |
| Foreign tax rate differential | 31 | 190 |
| NOL carryback rate differential |  | (268) |
| Change in state tax rate | 3 | 44 |
| Change in valuation allowance | 120 | 180 |
| Permanent items | (52) | (292) |
| Return to provision | 14 | (137) |
| Other | (7) | (98) |
| &nbsp;&nbsp;&nbsp;Total | $360 | $(74) |

---

Deferred tax assets and liabilities were comprised of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31,**<br> **2020** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Deferred revenue | $109 | $51 |
| &nbsp;&nbsp;&nbsp;Compensation-related accruals | 154 | 168 |
| &nbsp;&nbsp;&nbsp;Inventory reserves | 173 | 122 |
| &nbsp;&nbsp;&nbsp;Warranty reserves | 35 | 19 |
| &nbsp;&nbsp;&nbsp;Uncollectible receivable reserves | 75 | 129 |
| &nbsp;&nbsp;&nbsp;Net operating losses | 23 | 53 |
| &nbsp;&nbsp;&nbsp;Fair value adjustment to notes receivable | 571 | 572 |
| &nbsp;&nbsp;&nbsp;Other | 51 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets | 1191 | 1120 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (1174) | (1054) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax assets after valuation allowance | 17 | 66 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 672 | 772 |
| &nbsp;&nbsp;&nbsp;Total deferred tax liabilities | 672 | 772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax liability | $(655) | $(706) |

---

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular jurisdiction in recent years is a significant piece of negative evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance of $1.2 million and $1.1 million should be recorded against the Company's U.S. tax jurisdiction deferred tax assets as of December 31, 2021 and 2020, respectively. The overall change in valuation allowance was $0.1 million.

As a result of the Tax Cuts and Jobs Act of 2017, all Federal net operating losses that are generated beginning January 1, 2018 and beyond will carryforward indefinitely. Under The Coronavirus Aid, Relief, and Economic Security Act CARES Act (the "CARES Act"), which was enacted in March 2020, a net operating loss from a tax year beginning in 2018, 2019, or 2020 can be carried back five years. Using the separate-return method, the Company does not have any gross net operating loss carryforwards for Federal tax purposes at December 31, 2021 or 2020. A net operating loss was generated during the year ended December 31, 2020. This net operating loss is presumed to be carried back to the 2015 and 2016 tax years to offset prior taxable income, resulting in a current tax benefit in 2020.

The CARES Act made significant changes to Federal tax laws, including certain changes that were retroactive to the 2019 tax year. Changes in tax laws are accounted for in the period of enactment and the retroactive effects are recognized in these financial statements. There were no material income tax consequences of this enacted legislation on the reporting period of these financial statements.

The Consolidated Appropriations Act extended and expanded the availability of the CARES Act employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ("ARP Act"), enacted on March 11, 2021, extended and expanded the availability of the employee retention credit through December 31, 2021, however, certain provisions apply only after December 31, 2020. This new legislation expanded the group of qualifying businesses to include businesses with fewer than 500 employees and those who previously qualified for the Paycheck Protection Program (the "PPP Loan"). The employee retention credit is calculated to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company has determined that the qualifications for the credit were met in the first, second and third quarters of 2021. During the nine months ended September 30, 2021, the Company applied for total refunds of $1.6 million of payroll taxes previously paid and recognized a corresponding reduction in compensation expenses. Of the $1.6 million, $1.3 million was recorded within cost of services and $0.3 million was recorded within selling and administrative expenses during the nine months ended September 30, 2021. The Infrastructure Investment and Jobs Act was signed into law November 15, 2021, and ended the availability of the employee retention credit for the fourth quarter of 2021.

The Company is subject to possible examinations not yet initiated for Federal purposes for the fiscal years 2018 through 2020. In most cases, the Company has examinations open for foreign, state, or local jurisdictions based on the particular jurisdiction's statute of limitations.

Estimated amounts related to underpayment of income taxes, including interest and penalties, are classified as a component of income tax expense in the combined statements of income and were not material for the years ended December 31, 2021 and 2020. Amounts accrued for estimated underpayment of income taxes were zero as of December 31, 2021 and 2020.

**10. Debt**

The Company's short-term and long-term debt consists of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2020** |
| Short-term debt: |  |  |
| &nbsp;&nbsp;&nbsp;Strong/MDI 20-year installment loan | $2682 | $2906 |
| &nbsp;&nbsp;&nbsp;Strong/MDI 5-year equipment loan | 316 | 393 |
| &nbsp;&nbsp;&nbsp;Strong/MDI revolving credit facility | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total short-term debt | $2998 | $3299 |
| &nbsp;&nbsp;&nbsp;Long-term debt: |  |  |
| &nbsp;&nbsp;&nbsp;Tenant improvement loan | $128 | $- |
| &nbsp;&nbsp;&nbsp;Less: current position | (23) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt, net of current portion | $105 | $- |

---

***Strong/MDI Installment Loans***

On September 5, 2017, Strong/MDI entered into a demand credit agreement, as amended and restated May 15, 2018, with a bank consisting of a revolving line of credit for up to CAD$3.5 million, subject to a borrowing base requirement, a 20-year installment loan for up to CAD$6.0 million and a 5-year installment loan for up to CAD$0.5 million. On June 7, 2021, Strong/MDI entered into a demand credit agreement (the "2021 Credit Agreement"), which amended and restated the demand credit agreement dated as of September 5, 2017. The 2021 Credit Agreement consists of a revolving line of credit for up to CAD$2.0 million subject to a borrowing base requirement, a 20-year installment loan for up to CAD$5.1 million and a 5-year installment loan for up to CAD$0.5 million. Amounts outstanding under the line of credit are payable on demand and bear interest at the prime rate established by the lender. Amounts outstanding under the installment loans bear interest at the lender's prime rate plus 0.5% and are payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loans at any time. The Strong/MDI credit facilities are secured by a lien on Strong/MDI's Quebec, Canada facility and substantially all of Strong/MDI's assets. The 2021 Credit Agreement requires Strong/MDI to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity method investments) not exceeding 2.5 to 1, a current ratio (excluding amounts due from related parties) of at least 1.3 to 1 and minimum "effective equity" of CAD$4.0 million. As of December 31, 2021, there was CAD$3.4 million, or approximately $2.7 million, of principal outstanding on the 20-year installment loan, which bears variable interest at 2.95%. As of December 31, 2021, there was CAD$0.4 million, or approximately $0.3 million, of principal outstanding on the 5-year installment loan, which also bears variable interest at 2.95%. Strong/MDI was in compliance with its debt covenants as of December 31, 2021.

***Tenant Improvement Loan***

During the fourth quarter of 2021, the Company entered into a lease for a combined office and warehouse in Omaha, Nebraska, which replaces the warehouse lease that expires in May 2022. The Company expects to incur total costs of approximately $0.4 million to complete the build-out of the new combined office and warehouse facility. The landlord has agreed to fund approximately 50% of the build-out costs, and the Company is required to repay the portion funded by the landlord in equal monthly installments through the end of the initial lease term in February 2027. Through the end of 2021, the Company has incurred approximately $0.2 million of total costs to build out the facility, of which approximately $0.1 million has been funded by the landlord. The Company expects to complete the build-out during the first quarter of 2022.

**11. Compensation and Benefit Plans**

***Retirement Plan***

Ballantyne sponsors a defined contribution 401(k) plan (the "401(k) Plan") for all eligible employees in the United States. Pursuant to the provisions of the 401(k) Plan, employees may defer up to 100% of their compensation subject to the IRS annual limits. Ballantyne matches 50% of the amount deferred up to 6% of their compensation. The contributions made to the 401(k) Plan by Ballantyne were approximately $0.1 million during each of the years ended December 31, 2021 and 2020. The employees of the Company will continue to participate in Ballantyne's plans after the planned separation from Ballantyne.

**12. Leases**

The Company leases office and warehouse facilities and equipment under operating and finance leases expiring through February 2027. The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.

Right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. Certain of the leases contain extension options; however, the Company has not included such options as part of its right-of-use assets and lease liabilities because it does not expect it is reasonably certain the leases will be extended. The Company measures and records a right-of-use asset and lease liability based on the discount rate implicit in the lease, if known. In cases where the discount rate implicit in the lease is not known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company's estimated incremental borrowing rate for loans with similar collateral and duration.

The Company elected to not apply the recognition requirements of Topic 842 to leases of all classes of underlying assets that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Instead, lease payments for such short-term leases are recognized in operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

The Company elected, as a lessee, for all classes of underlying assets, to not separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component.

The following tables present the Company's lease costs and other lease information (dollars in thousands):

---

| | | |
|:---|:---|:---|
| **Lease cost** | **Year Ended** | **Year Ended** |
|  | **December 31, 2021** | **December 31, 2020** |
| Finance lease cost: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | $4 | $3 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities |  | 1 |
| Operating lease cost | 99 | 144 |
| Short-term lease cost | 56 | 58 |
| &nbsp;&nbsp;&nbsp;Net lease cost | $159 | $206 |

---

---

| | | |
|:---|:---|:---|
| **Other information** | **Year Ended** | **Year Ended** |
|  | **December 31, 2021** | **December 31, 2020** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows from finance leases | $- | $1 |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $98 | $181 |
| &nbsp;&nbsp;&nbsp;Financing cash flows from finance leases | $4 | $3 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $291 | $- |

---

---

| | |
|:---|:---|
|  | **As of<br> December 31, 2021** |
| Weighted-average remaining lease term - finance leases (years) |  |
| Weighted-average remaining lease term - operating leases (years) | 5.0 |
| Weighted-average discount rate - finance leases |  |
| Weighted-average discount rate - operating leases | 4.5% |

---

The following table presents a maturity analysis of the Company's operating lease liabilities as of December 31, 2021 (in thousands):

---

| | |
|:---|:---|
|  | **Operating Leases** |
| 2022 | $78 |
| 2023 | 76 |
| 2024 | 78 |
| 2025 | 79 |
| 2026 | 81 |
| Thereafter | 14 |
| Total lease payments | 406 |
| Less: Amount representing interest | (45) |
| Present value of lease payments | 361 |
| Less: Current maturities | (63) |
| Lease obligations, net of current portion | $298 |

---

**13. Commitments, Contingencies and Concentrations**

***Concentrations***

The Company's top ten customers accounted for approximately 39% and 55% of 2021 and 2020 combined net revenues. Trade accounts receivable from these customers represented approximately 29% and 52% of net combined receivables at December 31, 2021 and December 31, 2020, respectively. None of the Company's customers accounted for more than 10% of its combined net revenues during 2021, and one customer accounted for more than 10% of its net combined receivables as of December 31, 2021. None of the Company's customers accounted for more than 10% of its combined net revenues during 2020, and one customer accounted for more than 10% of the Company's net combined receivables as of December 31, 2020. While the Company believes its relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from the Company's significant customers could have a material adverse effect on the Company's business, financial condition and results of operations. The Company could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which the Company sells its products.

***Litigation***

In the ordinary course of our business operations, we are involved, from time to time, in certain legal disputes. Ballantyne and certain of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to Ballantyne. In the Company's experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. Ballantyne has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits. The Company has agreed to indemnify Ballantyne for future losses, if any, related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to the Company in the Separation, up to an aggregate amount not to exceed $250,000 per year as well as to indemnify Ballantyne for all expenses (including legal fees) related to the defense of such claims. During 2021, the Company recorded a loss contingency reserve of approximately $0.3 million, which represents the Company's estimate of its potential losses related to the settlement of open cases. When appropriate, Ballantyne may settle certain claims. The Company does not expect the resolution of these cases to have a material adverse effect on the Company's combined financial condition, results of operations or cash flows.

***Insurance Recoveries***

During February 2019, one portion of Strong/MDI's Quebec, Canada facility sustained damage as a result of inclement weather. The Company has property and casualty and business interruption insurance and has made claims for reimbursement of incurred costs of the affected portion of the facility and compensation for the Company's business interruption losses. During the third quarter of 2020, the Company reached a settlement with its insurance company which resolved all contingencies related to its business interruption claim, which resulted in an insurance recovery gain of approximately $2.8 million, which is included within Other income, net on the combined statements of income.

**14. Related Party Transactions**

***Related Party Transactions***

Immediately prior to the completion of the Offering, we and Ballantyne intend to enter into a management services agreement that will provide a framework for our ongoing relationship with Ballantyne, whereby which Ballantyne will provide certain services to us, such as information technology, legal, finance and accounting, human resources, tax, treasury, and other services. Pursuant to the Management Services Agreement, Ballantyne will charge us a fee that is based on its actual costs for those services in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations).

***Allocation of Corporate Expenses***

The operating results of Strong Global Entertainment have historically been disclosed as a reportable segment within the consolidated financial statements of Ballantyne enabling identification of directly attributable transactional information, functional departments and headcount. The combined balance sheet was primarily derived by reference to one of, or a combination of, Strong Global Entertainment transaction-level information, functional department or headcount. Revenue and Cost of revenue were derived from transactional information specific to Strong Global Entertainment products and services. Directly attributable operating expenses were derived from activities relating to Strong Global Entertainment functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from Ballantyne. The allocated costs for corporate functions included, but were not limited to, executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Strong Global Entertainment level. These costs were allocated on a basis of revenue, headcount or other measures Strong Global Entertainment has determined as reasonable.

The combined statements of income of the Company reflect allocations of general corporate expenses from Ballantyne including expenses related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing, shared facilities and other shared services. These costs were allocated based on a basis of revenue, headcount, or other measures the Company has determined as reasonable. These allocations are primarily reflected within operating expenses in the combined statements of income. The amount of these allocations from Ballantyne for each of the years ended December 31, 2021 and December 31, 2020 was $1.1 million and $1.4 million, respectively, all of which related to general and administrative expenses. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, the Company during the periods presented.

**15. Subsequent Events**

The Company has evaluated its subsequent events from December 31, 2021 through the date these combined financial statements were issued on April 6, 2022. Other than the item discussed below, the Company has determined that there are no subsequent events requiring disclosure in these combined financial statements.

On March 3, 2022, Ballantyne, Strong Studios, Inc. a wholly-owned subsidiary of STS, ("Strong Studios"), and Landmark Studio Group LLC ("Landmark") entered into (a) an Assignment and Attachment Agreement (the "AA Agreement"), pursuant to which Landmark agreed to assign and transfer its rights in certain television series projects to Strong Studios in return for certain future executive production and development fees, 7.5% of certain future net proceeds, plus warrants to purchase 150,000 common shares in the Company post IPO; and (b) a Purchase Agreement (the "Purchase Agreement"), pursuant to which Landmark agreed to sell to Strong Studios, and Strong Studios agreed to purchase from Landmark certain rights in certain motion picture and television projects in return for certain future production fees, the guaranteed payment of $1.7 million, of which $0.3 million was paid upon the closing, and 10% of the Net Proceeds (as defined therein) from those projects. Together, the AA Agreement and the Purchase Agreement are referred to as the "Agreements."

*AA Agreement*

Pursuant to the AA Agreement, Landmark agreed to assign, transfer and covey to Strong Studios all of Seller's right, title, and interest in (a) certain agreements (the "AA Underlying Agreements") listed in the AA Agreement under which the Seller acquired rights, title, or interests in the television series projects "*Flagrant*" and "*Safehaven*" (the "AA Projects"), (b) all literary and dramatic material transferred or generated under the AA Underlying Agreements, and (c) all of the Seller's other interests in the AA Projects, as described more fully in the AA Agreement.

In consideration for such assignment, and in the event that Strong Studios develops a production of any of the AA Projects in any media, Strong Studios agreed to pay Landmark: (a) an executive fee for each episode of an AA Project produced, which shall be $20,000 per episode for *Safehaven* and $30,000 per episode for *Flagrant*, (b) one-time lump sum development fees for each AA Project which shall be $200,000 for *Safehaven* and $200,000 for *Flagrant*, (c) a fee for 7.5% of net proceeds from future sequels, spinoffs, and other derivatives of the AA Projects, and a warrant for the purchase 150,000 common shares of the Company, exercisable for five years as of six months from the date of the consummation of the initial public offering of the Company. The exercise price of the warrant would be equal to the per-share offering price to the public in the Company's initial public offering. In the event that an initial public offering of the Company does not occur within a specified time, Landmark would have the right to surrender the warrant in exchange for 2.5% ownership in Strong Studios.

As a condition precedent to entry into the AA Agreement, Strong Studios agreed to enter into distribution agreements for the AA Projects (the "AA Distribution Agreements") with Screen Media Ventures, LLC ("SMV"). Pursuant to the AA Distribution Agreements, SMV agreed to make an aggregate of $9.0 million in advances to Strong Studios in return for the right to distribute the AA Projects as more fully provided under such AA Distribution Agreements.

*AA Purchase Agreement*

In consideration for the sale, of the rights to certain the motion picture and television projects under the AA Purchase Agreement, Strong Studios agreed to pay to Landmark approximately $1.7 million in four separate payments (the "Guaranteed Payments"), subject to certain limitations, reductions, and setoffs as more fully set forth in the Purchase Agreement, together with 10% of the Net Proceeds (as defined therein) from those projects. Pursuant to the Purchase Agreement, Ballantyne unconditionally guaranteed the full and timely payment of Guaranteed Payments of Strong Studios to Landmark.

*Accounting for the Transaction*

The Company reviewed the acquisition of the projects from Landmark from an accounting perspective and concluded substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets. Therefore, the Company determined the transaction was not the acquisition of a business, but instead should be treated as an asset acquisition. Costs of acquiring and producing films and television programs are capitalized when incurred. In connection with the transaction, the Company allocated the $1.7 million acquisition price to the various projects under development based upon the historical costs incurred by Landmark, which the Company believes approximates fair value. The Company also recorded a liability for the $1.4 million of remaining installment payments it will make to Landmark. Finally, the Company also determined the fair value of the Landmark Warrant and allocated an additional $0.4 million to the various projects under development. The Company will recognize the remaining payment obligations due to Landmark when the contingencies are resolved and the amounts become payable.

**Strong Global Entertainment**

**Combined Balance Sheets**

**(In thousands)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **December 31, 2021** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $3189 | $4494 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for doubtful account of $458 and $507, respectively | 4901 | 4631 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 3666 | 3272 |
| &nbsp;&nbsp;&nbsp;Other current assets | 4333 | 3266 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 16089 | 15663 |
| Property, plant and equipment, net | 4652 | 5207 |
| Operating lease right-of-use assets | 250 | 299 |
| Intangible assets, net | 8 | 69 |
| Film and television programming rights, net | 1449 |  |
| Goodwill | 871 | 942 |
| Other assets | - | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $23319 | $22199 |
| **Liabilities and Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $4008 | $3996 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 3924 | 2683 |
| &nbsp;&nbsp;&nbsp;Short-term debt | 2553 | 2998 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 35 | 23 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease obligations | 63 | 63 |
| &nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | 2097 | 2557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 12680 | 12320 |
| Long-term debt, net of current portion | 135 | 105 |
| Operating lease obligations, net of current portion | 250 | 298 |
| Deferred income taxes | 490 | 655 |
| Other long-term liabilities | 529 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 14084 | 13389 |
| Commitments, contingencies and concentrations (Note 14) |  |  |
| Equity: |  |  |
| Accumulated other comprehensive loss | (5561) | (3628) |
| Net parent investment | 14796 | 12438 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 9235 | 8810 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and equity | $23319 | $22199 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Operations**

**(In thousands)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30,** | **Nine** **Months Ended**<br> **September** **30,** |
|  | **2022** | **2021** |
| Net product sales | $22076 | $11811 |
| Net service revenues | 6370 | 4395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenues | 28446 | 16206 |
| Cost of products sold | 16233 | 7831 |
| Cost of services | 5538 | 2861 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenues | 21771 | 10692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 6675 | 5514 |
| Selling and administrative expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Selling | 1723 | 1156 |
| &nbsp;&nbsp;&nbsp;Administrative | 4138 | 2960 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total selling and administrative expenses | 5861 | 4116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 814 | 1398 |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 3 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (85) | (84) |
| &nbsp;&nbsp;&nbsp;Foreign currency transaction income (loss) | 646 | (56) |
| &nbsp;&nbsp;&nbsp;Other income, net | 15 | 167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income | 579 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 1393 | 1425 |
| &nbsp;&nbsp;&nbsp;Income tax expense | (417) | (346) |
| Net income | $976 | $1079 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Comprehensive (Loss) Income**

**(In thousands)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine** **Months Ended <br> September 30,** | **Nine** **Months Ended <br> September 30,** |
|  | **2022** | **2021** |
| Net income | $976 | $1079 |
| Currency translation adjustment: |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized net change arising during period | (1933) | (314) |
| Total other comprehensive loss | (1933) | (314) |
| Comprehensive (loss) income | $(957) | $765 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Equity**

**Nine** **Months Ended September 30, 2022 and 2021**

**(In thousands)**

**(unaudited)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Accumulated**<br> **Other Comprehensive Loss** | **Net Parent Investment** | **Total** |
| Balance at December 31, 2021 | $(3628) | $12438 | $8810 |
| Net income |  | 976 | 976 |
| Net other comprehensive loss | (1933) |  | (1933) |
| Stock-based compensation expense |  | 97 | 97 |
| Net transfer from parent | - | 1285 | 1285 |
| Balance at September 30, 2022 | $(5561) | $14796 | $9235 |
| Balance at December 31, 2020 | $(3829) | $14461 | $10632 |
| Net income |  | 1079 | 1079 |
| Net other comprehensive loss | (314) |  | (314) |
| Stock-based compensation expense |  | 134 | 134 |
| Net transfer to parent | - | (374) | (374) |
| Balance at September 30, 2021 | $(4143) | $15300 | $11157 |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Combined Statements of Cash Flows**

**(In thousands)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine** **Months Ended** <br> **September** **30,** | **Nine** **Months Ended** <br> **September** **30,** |
|  | **2022** | **2021** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $976 | $1079 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for (recovery of) doubtful accounts | 10 | (249) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for obsolete inventory |  | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for warranty reserve | 9 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 521 | 684 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and accretion of operating leases | 52 | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (116) | (67) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 97 | 134 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (395) | 1380 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (556) | (793) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current income taxes | 503 | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 1133 | (2064) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (3572) | 833 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | (420) | 2002 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease obligations | (50) | (79) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | (1808) | 3158 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Capital expenditures | (197) | (150) |
| &nbsp;&nbsp;&nbsp;Acquisition of programming rights | (407) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (604) | (150) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on long-term debt | (20) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on short-term debt | (228) | (236) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash transferred from (to) parent | 1285 | (374) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on capital lease obligations | - | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 1037 | (613) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash and cash equivalents | 70 | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (decrease) increase in cash and cash equivalents | (1305) | 2390 |
| Cash and cash equivalents at beginning of period | 4494 | 3355 |
| Cash and cash equivalents at end of period | $3189 | $5745 |
| Supplemental disclosure of cash paid (refunded) for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $82 | $84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $(34) | $253 |
| Supplemental disclosure of non-cash investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount payable to Landmark Studio Group in connection with acquisition of projects (Note 7) | $1345 | $- |

---

See accompanying notes to combined financial statements.

**Strong Global Entertainment**

**Notes to the Combined Financial Statements**

**(unaudited)**

**1. Business Description and Basis of Presentation**

***Business Description***

Strong Global Entertainment ("Strong Global Entertainment," or the "Company") combines the operating assets and liabilities of Strong/MDI Screen Systems, Inc. ("Strong/MDI"), a leading premium screen and projection coatings supplier in the world, Strong Technical Services, Inc. ("STS"), which provides comprehensive managed service offerings with 24/7/365 support nationwide to ensure solution uptime and availability, and Strong Studios, Inc., which develops and produces original feature films and television series and acquires rights to distribute content globally. The Company recently launched Strong Studios, Inc. ("Strong Studios") with the goal of expanding its business to include content creation and production of feature films and series. The launch of Strong Studios is intended to further diversify our revenue streams and increase our addressable markets, while leveraging and expanding our existing relationships in the industry.

The Company currently operates as an operating segment of Ballantyne Strong, Inc. ("Ballantyne"), as discussed in the *Basis of Presentation* below. On July 29, 2021, Ballantyne announced that its board of directors had approved the pursuit of a separation of its Strong Global Entertainment business segment from Ballantyne. Ballantyne announced that the separation was expected to be effected through an initial public offering (the "Offering") of newly issued common shares of Strong Global Entertainment, Inc. Ballantyne intends to remain the majority shareholder of the subsidiary post-offering.

Effective July 20, 2022, the Company's Board of Directors approved the relocation of Strong Global Entertainment's headquarters from 4201 Congress Street, Suite 175, Charlotte, North Carolina, 28209 to 5960 Fairview Road, Suite 275, Charlotte North Carolina, 28210.

***Basis of Presentation***

The combined financial statements of Strong Global Entertainment have been derived from the consolidated financial statements and accounting records of Ballantyne as if Strong Global Entertainment had operated on a stand-alone basis during the periods presented and were prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and pursuant to the regulations of the U.S. Securities and Exchange Commission ("SEC"). Historically, Strong Global Entertainment was reported as an operating segment within Ballantyne's reportable segments and did not operate as a stand-alone company. Accordingly, Ballantyne historically reported the financial position and the related results of operations, cash flows and changes in equity of Strong Global Entertainment as a component of Ballantyne's consolidated financial statements.

The combined financial statements are presented as if Strong Global Entertainment had been carved out of Ballantyne for all periods presented. Prior to the completion of the Offering, certain assets and liabilities presented will transfer to Strong Global Entertainment at carry-over (historical cost) basis.

Cash and cash equivalents are managed through bank accounts legally owned by Ballantyne as well as accounts owned by STS and Strong/MDI. Accordingly, cash and cash equivalents held by Ballantyne at the corporate level were not attributable to Strong Global Entertainment for any of the periods presented. Only cash amounts in accounts legally owned by entities dedicated to the Strong Global Entertainment business are reflected in the combined balance sheets. Ballantyne manages cash on a centralized basis and routinely transferred cash to and from its operating subsidiaries to maintain target cash levels and fund disbursements. Transfers of cash, both to and from Ballantyne, are reflected as a component of Net parent investment in the combined balance sheets and as a financing activity on the accompanying combined statements of cash flows.

As the operations that comprise Strong Global Entertainment were not historically held by a single legal entity, total Net parent investment is shown in lieu of equity in the combined financial statements. Balances between Strong Global Entertainment and Ballantyne that were not historically cash settled are included in Net parent investment. Net parent investment represents Ballantyne's interest in the recorded net assets of Strong Global Entertainment and represents the cumulative investment by Ballantyne in Strong Global Entertainment through the dates presented, inclusive of operating results.

The operating results of Strong Global Entertainment have historically been disclosed as a reportable segment within the consolidated financial statements of Ballantyne enabling identification of directly attributable transactional information, functional departments and headcount. The combined balance sheets were primarily derived by reference to one, or a combination, of Strong Global Entertainment transaction-level information, functional department or headcount. Revenue and Cost of revenue were derived from transactional information specific to Strong Global Entertainment products and services. Directly attributable operating expenses were derived from activities relating to Strong Global Entertainment functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from Ballantyne. The allocated costs for corporate functions included, but were not limited to, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Strong Global Entertainment level. These costs were allocated on a basis of revenue, headcount or other measures Strong Global Entertainment has determined as reasonable.

Strong Global Entertainment employees also historically participated in Ballantyne's stock-based incentive plans, in the form of restricted stock units ("RSUs") and stock options issued pursuant to Ballantyne's employee stock purchase plan. Stock-based compensation expense has been directly reported by Strong Global Entertainment based on the awards and terms previously granted to Ballantyne's employees.

Allocations for management costs and corporate support services provided to Strong Global Entertainment totaled $0.7 million and $0.8 million for the nine months ended September 30, 2022 and September 30, 2021, respectively, all of which is included in general and administrative expenses. Strong Global Entertainment expects to incur additional expenses as a stand-alone publicly traded company. It is not practicable to estimate actual costs that would have been incurred had Strong Global Entertainment been a stand-alone company during the periods presented.

The management of Strong Global Entertainment believes the assumptions underlying the combined financial statements, including the assumptions regarding the allocated expenses, reasonably reflect the utilization of services provided, or the benefit received by, Strong Global Entertainment during the periods presented. Nevertheless, the combined financial statements may not be indicative of Strong Global Entertainment's future performance, do not necessarily include all of the actual expenses that would have been incurred had Strong Global Entertainment been an independent entity during the historical periods and may not reflect the results of operations, financial position, and cash flows had Strong Global Entertainment been a stand-alone company during the periods presented.

During the periods presented in the combined financial statements, the operations of Strong Global Entertainment are included in the consolidated U.S. federal, and certain state and local and foreign income tax returns filed by Ballantyne, where applicable. Income tax expense and other income tax related information contained in the combined financial statements are presented on a separate return basis as if Strong Global Entertainment had filed its own tax returns. The income taxes of Strong Global Entertainment as presented in the combined financial statements may not be indicative of the income taxes that Strong Global Entertainment will generate in the future. Additionally, certain tax attributes such as net operating losses or credit carryforwards are presented on a separate return basis, and accordingly, may differ in the future. In jurisdictions where Strong Global Entertainment has been included in the tax returns filed by Ballantyne, any income tax receivables resulting from the related income tax provisions have been reflected in the balance sheet within Net parent investment.

Net income per share data has not been presented in the combined financial statements because Strong Global Entertainment did not operate as a separate legal entity with its own capital structure during the periods presented.

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year.

The preparation of these combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.

These combined financial statements are presented in accordance with the requirements of interim financial data and consequently do not include all of the disclosures normally required by GAAP for annual reporting purposes, such as those made in the Company's audited combined financial statements for the years ended December 31, 2021 and 2020. These combined financial statements should be read in conjunction with the combined financial statements and notes thereto included elsewhere in this registration statement for the years ended December 31, 2021 and 2020.

The combined balance sheet as of December 31, 2021 was derived from the Company's audited combined balance sheet as of that date. All other combined financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full fiscal year.

**2. Summary of Significant Accounting Policies**

***Accounts Receivable***

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based on several factors, including overall customer credit quality, historical write-off experience, industry-specific trends and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt expense to be adjusted accordingly.

***Income Taxes***

Income taxes are accounted for under the asset and liability method. The Company uses an estimate of its annual effective rate at each interim period based on the facts and circumstances at the time while the actual effective rate is calculated at year-end. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing whether the deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company's uncertain tax positions are evaluated in a two-step process, whereby 1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and 2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The Company accrues interest and penalties related to uncertain tax positions in the combined statements of operations as income tax expense.

***Stock Compensation Plans***

The Company's employees have historically participated in Ballantyne's stock-based compensation plans. Stock-based compensation expense has been allocated to the Company based on the awards and terms previously granted to the Ballantyne's employees. The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to RSUs is based on the closing fair market value of Ballantyne's common stock on the date of grant.

The Company recognizes compensation expense for all stock-based payment awards based on estimated fair values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company has historically issued shares upon exercise of stock options or vesting of restricted stock from new stock issuances. The Company estimates the fair value of restricted stock awards based upon the market price of the underlying Common Shares on the date of grant. The fair value of stock options granted is calculated using the Black-Scholes option pricing model. No stock-based compensation cost was capitalized as a part of inventory during the nine months ended September 30, 2022 and September 30, 2021.

***Film and Television Programming Rights***

Commencing in March 2022, the Company began producing original productions and acquiring rights to films and television programming. Film and television programming rights include the unamortized costs of in-process or in-development content produced or acquired by the Company. The Company's capitalized costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. Film and television program rights are stated at the lower of amortized cost or estimated fair value.

The costs of producing content are amortized using the individual-film-forecast method. These costs are amortized based on the ratio of the current period's revenues to management's estimated remaining total gross revenues to be earned ("Ultimate Revenue") as of each reporting date to reflect the most current available information. Management's judgment is required in estimating Ultimate Revenue and the costs to be incurred throughout the life of each film or television program. Amortization is adjusted when necessary to reflect increases or decreases in forecasted Ultimate Revenues.

For an episodic television series, the period over which Ultimate Revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. For films, Ultimate Revenue includes estimates over a period not to exceed ten years following the date of initial release.

Content assets are expected to be predominantly monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change in the expected usefulness of the content or the fair value may be less than the unamortized cost.

Due to the inherent uncertainties involved in making such estimates of Ultimate Revenues and expenses, these estimates may differ from actual results. In addition, in the normal course of our business, some films and titles will be more successful or less successful than anticipated. Management regularly reviews and revises, when necessary, its Ultimate Revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. An increase in the estimate of Ultimate Revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of Ultimate Revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically results in an impairment requiring a write-down of the film cost to the title's fair value. The Company has not yet incurred any of these write-downs.

An impairment charge would be recorded in the amount by which the unamortized costs exceed the estimated fair value. Estimates of future revenue involve measurement uncertainties and it is therefore possible that reductions in the carrying value of film library costs may be required because of changes in management's future revenue estimates.

***Fair Value of Financial and Derivative Instruments***

Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Level
 1 — inputs
 to the valuation techniques are quoted prices in active markets for identical assets or liabilities

● Level
 2 — inputs
 to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly

● Level
 3 — inputs
 to the valuation techniques are unobservable for the assets or liabilities

The following tables present the Company's financial assets and liabilities measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 30, 2022 and December 31, 2021.

Fair values measured on a recurring basis at September 30, 2022 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Cash and cash equivalents | $3189 | $- | $- | $3189 |
| Notes receivable | - | - | - | - |
| Total | $3189 | $- | $- | $3189 |

---

Fair values measured on a recurring basis at December 31, 2021 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Cash and cash equivalents | $4494 | $- | $- | $4494 |
| Notes receivable | - | - | - | - |
| Total | $4494 | $- | $- | $4494 |

---

During 2011, the Company entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of digital projection equipment. In order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. In 2019, in connection with the Company's review of the debtor's financial statements and changes in the underlying trend of historical and projected cash flows available to service the notes, the Company determined that it was unlikely that the Company would receive any cash from settlement of the note receivable and reduced the carrying value of the notes receivable to zero. There have been no changes to the carrying value of the notes receivable since 2019.

The Company's short-term debt is recorded at historical cost. The carrying values of all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt reported in the combined balance sheets equal or approximate their fair values due to the short-term nature of these instruments.

All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment).

***Net parent investment***

Net parent investment on the combined balance sheets represents Ballantyne's historical investment in Strong Global Entertainment, the net effect of transactions with, and allocations to and from, Ballantyne, and Strong Global Entertainment.

***Recently Issued Accounting Pronouncements***

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This ASU will require the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance was initially effective for the Company for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10, "Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates," which, among other things, defers the effective date of ASU 2016-13 for public filers that are considered smaller reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted. The Company believes the adoption of this ASU will not significantly impact its results of operations and financial position.

**3. Revenue**

***Revenue Recognition***

The Company accounts for revenue using the following steps:

● Identify the contract, or contracts, with a customer;

● Identify the performance obligations in the contract;

● Determine the transaction price;

● Allocate the transaction price to the identified performance obligations; and

● Recognize revenue when, or as, the Company satisfies the performance obligations.

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine whether they are distinct, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.

As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company typically does not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when the Company invoices clients, or receives cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation.

The Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of September 30, 2022 or December 31, 2021.

***Screen system sales***

The Company typically recognizes revenue on the sale of its screen systems when control of the screen is transferred to the customer, usually at time of shipment. However, revenue is recognized upon delivery for certain international shipments with longer shipping transit time because control does not transfer to the customer until delivery. For contracts that are long-term in nature, the Company believes that the use of the percentage-of-completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues, and contract costs. Under the percentage-of-completion method, revenue is recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer.

***Digital equipment sales***

The Company recognizes revenue on sales of digital equipment when the control of the equipment is transferred, which occurs at the time of shipment from the Company's warehouse or drop-shipment from a third party. The Company typically records revenue for drop-shipment orders on a gross basis as the Company (i) is responsible for fulfilling the order, (ii) has inventory risk, (iii) would receive any returned items and (iv) has discretion over pricing. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer.

***Field maintenance and monitoring services***

The Company sells service contracts that provide maintenance and monitoring services to its customers. These contracts are generally 12 months in length. Revenue related to service contracts is recognized ratably over the term of the agreement.

In addition to selling service contracts, the Company also performs discrete time and materials-based maintenance and repair work for its customers. Revenue related to time and materials-based maintenance and repair work is recognized at the point in time when the performance obligation has been fully satisfied.

***Installation services***

The Company performs installation services for its customers and recognizes revenue upon completion of the installations.

***Extended warranty sales***

The Company sells extended warranties to its customers. When the Company is the primary obligor, revenue is recognized on a gross basis ratably over the term of the extended warranty. In third party extended warranty sales, the Company is not the primary obligor, and revenue is recognized on a net basis at the time of the sale.

The following tables disaggregate the Company's revenue by major source for the nine months ended September 30, 2022 and September 30, 2021 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30, 2022** | **Nine** **Months Ended**<br> **September** **30, 2021** |
| Screen system sales | $9341 | $6680 |
| Digital equipment sales | 9808 | 3890 |
| Extended warranty sales | 290 | 105 |
| Other product sales | 2637 | 1136 |
| Total product sales | 22076 | 11811 |
| Field maintenance and monitoring services | 4975 | 3630 |
| Installation services | 1294 | 674 |
| Other service revenues | 101 | 91 |
| Total service revenues | 6370 | 4395 |
| Total | $28446 | $16206 |

---

The following tables disaggregate the Company's revenue by the timing of transfer of goods or services to the customer for the nine months ended September 30, 2022 and September 30, 2021 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine** **Months Ended**<br> **September** **30, 2022** | **Nine** **Months Ended**<br> **September** **30, 2021** |
| Point in time | $24561 | $13733 |
| Over time | 3885 | 2473 |
| Total | $28446 | $16206 |

---

At September 30, 2022, the unearned revenue amount associated with maintenance and monitoring services and extended warranty sales in which the Company is the primary obligor was $0.7 million. The Company expects to recognize $0.6 million of the unearned revenue amounts during the remainder of 2022, $0.1 million during 2023 and immaterial amounts from 2024 through 2026. The amount expected to be recorded during the remainder of 2022 includes $0.2 million related to long-term projects that the Company's uses the percentage-of-completion method to recognize revenue.

**4. Inventories**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2022** | **December 31,**<br> **2021** |
| Raw materials and components | $1591 | $1680 |
| Work in process | 364 | 399 |
| Finished goods | 1711 | 1193 |
|  | $3666 | $3272 |

---

The inventory balances were net of reserves of approximately $0.5 million as of both September 30, 2022 and December 31, 2021. The inventory reserves primarily related to the Company's finished goods inventory. A rollforward of the inventory reserve for the nine months ended September 30, 2022 is as follows (in thousands):

---

| | |
|:---|:---|
| Inventory reserve balance at December 31, 2021 | $467 |
| Inventory write-offs and other adjustments during 2022 | 5 |
| Provision for inventory reserve during 2022 | - |
| Inventory reserve at September 30, 2022 | $472 |

---

**5. Other current assets**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2022** | **December 31,<br> 2021** |
| Prepaid expenses | $488 | $627 |
| Employee retention credit receivable | 540 | 1063 |
| Costs incurred in connection with initial public offering | 1330 | 882 |
| Recoverable income and other taxes | 35 | 542 |
| Unbilled accounts receivable | 422 | 60 |
| Due from Safehaven 2022, Inc. | 1375 |  |
| Other | 143 | 92 |
| Total | $4333 | $3266 |

---

**6.** **Property, Plant and Equipment**

Property, plant and equipment include the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **December 31,**<br> **2021** |
| Land | $47 | $51 |
| Buildings and improvements | 6667 | 6760 |
| Machinery and other equipment | 4691 | 4848 |
| Office furniture and fixtures | 662 | 686 |
| Construction in progress | 11 | 376 |
| Total property, plant and equipment, cost | 12078 | 12721 |
| Less: accumulated depreciation | (7426) | (7514) |
| Net property, plant and equipment | $4652 | $5207 |

---

Depreciation expense approximated $0.4 million and $0.5 million during the nine months ended September 30, 2022 and 2021, respectively.

**7.** **Film and Television Programming Rights, Net**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2022** | **December 31,<br> 2021** |
| Television series in development | $1257 | $- |
| Films in development | 192 | - |
| Total | $1449 | $- |

---

The Company has not yet commenced amortization of the projects as they were still in development at September 30, 2022.

A rollforward of film and television programming rights, net for the nine months ended September 30, 2022 is as follows (in thousands):

---

| | |
|:---|:---|
| Balance at December 31, 2021 | $- |
| In-process projects acquired from Landmark | 1670 |
| Warrant to be issued to Landmark | 364 |
| Expenditures on in-process projects | 407 |
| Reclass from other assets | 124 |
| Reclass of reimbursable costs associated with *Safehaven* | (1116) |
| Balance at September 30, 2022 | $1449 |

---

On March 3, 2022, Strong Studios acquired, from Landmark Studio Group LLC ("Landmark"), the rights to original feature films and television series, and has been assigned third party rights to content for global multiplatform distribution. The transaction entailed the acquisition of certain projects which are in varying stages of development, none of which have, as yet, produced revenue. In connection with such assignment and purchase, Strong Studios agreed to pay to Landmark approximately $1.7 million in four separate payments, $0.3 million of which was paid upon the closing of the transaction. The $1.7 million acquisition price was allocated to three projects in development, including $1.0 million to *Safehaven*, $0.3 million to *Flagrant* and $0.4 million to *Shadows in the Vineyard*. The Company also agreed to issue to Landmark no later than 10 days after the completion of the initial public offering of Strong Global Entertainment, a warrant to purchase up to 150,000 common shares of Strong Global Entertainment, exercisable for three years beginning six months after the consummation of the initial public offering, at an exercise price equal to the per-share offering price of Strong Global Entertainment's common shares in the initial public offering (the "Landmark Warrant"). The Landmark Warrant allows for cashless exercise in certain limited circumstances and provides for certain registration rights for such warrant shares. In the event that an initial public offering of the Company does not occur within a specified time, Landmark would have the right to surrender the warrant in exchange for 2.5% ownership in Strong Studios.

As a condition precedent to entry into the AA Agreement, Strong Studios agreed to enter into distribution agreements for the AA Projects (the "AA Distribution Agreements") with Screen Media Ventures, LLC ("SMV"). Pursuant to the AA Distribution Agreements, SMV agreed to purchase the global distribution rights to *Safehaven* for $6.5 million and *Flagrant* for $2.5 million upon delivery of each project. In January 2023, Strong Studios amended its agreement with SMV resulting in Strong Studios retaining the worldwide global distribution rights for the Flagrant series and releasing SMV from the obligation to purchase the distribution rights for the series.

In accordance with Accounting Standards Codification ("ASC") 926 Entertainment - Films, costs of acquiring and producing films and television programs are capitalized when incurred. In connection with the transaction, and using the guidance in "Acquisition of Assets Rather than a Business" subsections contained within ASC 805 *Business Combinations,* the Company allocated the $1.7 million acquisition price to the various projects under development based upon the historical costs incurred by Landmark, which the Company believes approximates fair value. The Company also recorded a liability for the $1.4 million of remaining installment payments it will make to Landmark. Finally, the Company also determined the fair value of the Landmark Warrant and allocated an additional $0.4 million to the various projects under development. The Company will recognize the remaining payment contingencies that may be due to Landmark, which include distribution fees and profit participations that will be incurred following the completion and exploitation of each project, when the contingencies are resolved, and the amounts become payable.

The fair value of the Landmark Warrant was estimated on the date of grant using a Black-Scholes valuation model with the following assumptions:

---

| | |
|:---|:---|
| Expected dividend yield at date of grant | 0.0% |
| Risk-free interest rate | 1.7% |
| Expected stock price volatility | 72.9% |
| Expected life of warrants (in years) | 3.0 |

---

The Company estimated the expected stock price volatility based on Ballantyne's historical volatility.

During the second quarter of 2022, Safehaven 2022, Inc. ("Safehaven 2022") was established to manage the production and financing of the *Safehaven* television series, one of the projects acquired from Landmark. Strong Studios owns 49% of Safehaven 2022 and the remaining 51% is owned by Unbounded Services, LLC ("Unbounded"). No consideration was paid by the Company in exchange for its 49% equity interest in Safehaven 2022. Unbounded also did not contribute any assets or liabilities to Safehaven 2022 and agreed to provide day-to-day management services in exchange for their 51% ownership. Unbounded will also serve as a co-producer on the project. The Company assigned the Landmark distribution agreement to Safehaven 2022, and the Landmark distribution agreement serves as collateral for the production financing at Safehaven 2022. The Company and Unbounded will share profits and losses, if any, from Safehaven 2022 on a pro-rata basis based on their relative ownership percentages.

The Company allocated $1.0 million of the $1.7 million acquisition price to the *Safehaven* project and incurred an additional $0.1 million of development costs during the nine months ended September 30, 2022. The Company transferred the $1.1 million in intellectual property representing the rights and assets related to the *Safehaven* project and Safehaven 2022 agreed to reimburse Strong Studios $1.1 million for those costs following payment of any senior secured debt and prior to any profit participations or equity distributions. The $1.1 million payable to Strong Studios represents an obligation of Safehaven 2022 to Strong Studios and is not contingent on any specific event. Accordingly, the Company has classified the amount due from Safehaven 2022 as a receivable within other current assets on its Combined Balance Sheet as of September 30, 2022. The Company expects Safehaven 2022 to reimburse the acquisition cost allocated to the project based on its ultimate expected revenues and profits from the exploitation of the project. Safehaven 2022 will begin to generate revenue and expenses upon delivery of the completed *Safehaven* project to SMV, which is expected to occur in early 2023. The $6.5 million minimum guarantee is due and payable to Safehaven 2022 in installments of 25% upon delivery and acceptance, 25% three months thereafter, and the remaining 50% six months thereafter. Upon delivery and acceptance, Safehaven 2022 expects to recognize $6.5 million in initial revenue from the distribution rights and will record cost of sales using the individual-film-forecast method based on the ratio of the current period's revenues to management's estimated remaining total gross revenues to be earned. Safehaven 2022 is an equity method holding and the Company will reflect its proportionate share of the net periodic profit and loss of Safehaven 2022 as equity method income (loss) during each reporting period.

Safehaven 2022 subsequently entered into an $8.9 million Loan and Security Agreement with Bank of Hope to provide interim production financing for the *Safehaven* production, secured by the Landmark distribution agreement. Safehaven 2022 is the sole borrower and guarantor under the loan agreement. As of September 30, 2022, Safehaven 2022 had borrowed $8.6 million under the facility for production costs incurred to that date. Safehaven 2022 has also received working capital advances of $0.4 million from Ballantyne, which was funded on behalf of Strong Studios. Strong Studios. Strong Studios expects to be reimbursed by Safehaven 2022 for the working capital advances when tax credits are received in the second half of 2023. Upon reimbursement of the working capital advances from Safehaven 2022, Strong Studios will then reimburse Ballantyne.

The Company reviewed its ownership in Safehaven 2022 and concluded that it has significant influence, but not a controlling interest, in Safehaven 2022 based on its ownership being less than 50% along with having one of three representatives on the board. The Company also reviewed whether it otherwise had the power to make decisions that significantly impact the economic performance of Safehaven 2022 and concluded that it did not control the entity and is not the primary beneficiary. Accordingly, the Company will apply the equity method of accounting to its equity holding in Safehaven 2022 and will record its proportionate share of the net income/loss resulting from the equity holding as a single line item captioned "equity method holding income (loss)" on its statement of operations.

Safehaven 2022 did not record any income or expense during the nine months ended September 30, 2022, because all costs incurred by Safehaven 2022 related to the in-process production through September 30, 2022, have been capitalized. Upon delivery and acceptance of the project, Safehaven 2022 expects to recognize revenue from the distribution rights and will record cost of sales using the individual-film-forecast method based on the ratio of the current period's revenues to management's estimated remaining total gross revenues to be earned. A summary of the balance sheet of Safehaven 2022 as of September 30, 2022, is as follows (in thousands):

---

| | |
|:---|:---|
| Cash | $194 |
| Television programming rights | 10439 |
| Other assets | 337 |
| Total assets | $10970 |
| Accounts payable and accrued liabilities | $946 |
| Due to Strong Studios | 1375 |
| Debt | 8649 |
| Equity | - |
| Total liabilities and equity | $10970 |

---

**8.** **Goodwill**

The following represents a summary of changes in the Company's carrying amount of goodwill (in thousands):

---

| | |
|:---|:---|
| Balance as of December 31, 2021 | $942 |
| Foreign currency translation adjustment | (71) |
| Balance as of September 30, 2022 | $871 |

---

**9. Accrued Expenses and Other Long-Term Liabilities**

The major components of current accrued expenses are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **September** **30,**<br> **2022** | **December 31,**<br> **2021** |
| Employee-related | $1467 | $1366 |
| Warranty obligation | 163 | 136 |
| Interest and taxes | 273 | 324 |
| Legal and professional fees | 50 | 473 |
| Film and television programming rights | 1189 |  |
| Safehaven 2022 working capital advance due to Ballantyne | 375 |  |
| Other | 407 | 384 |
| Total | $3924 | $2683 |

---

The $1.2 million of accrued expenses related to film and television programming rights includes $0.8 million payable to Landmark and $0.4 million related to the Landmark Warrant.

The major components of other long-term liabilities are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **September** **30,**<br> **2022** | **December 31, 2021** |
| Film and television programming rights | $520 | $- |
| Deferred revenue | 9 | 11 |
| &nbsp;&nbsp;&nbsp;Total | $529 | $11 |

---

The $0.5 million of long-term accrued expenses related to film and television programming rights includes amounts payable to Landmark.

**10.** **Income Taxes**

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular jurisdiction in recent years is a significant piece of negative evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence including recent updates to the taxing jurisdictions generating income, the Company concluded that a full valuation allowance should be recorded against the Company's U.S. tax jurisdiction net deferred tax assets as of September 30, 2022 and December 31, 2021, respectively.

As a result of the Tax Cuts and Jobs Act of 2017, all Federal net operating losses that are generated beginning January 1, 2018 and beyond will carryforward indefinitely. Under The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which was enacted in March 2020, a net operating loss from a tax year beginning in 2018, 2019, or 2020 can be carried back five years. Using the separate-return method, the Company does not have any gross net operating loss carryforwards for Federal tax purposes at September 30, 2022 or December 31, 2021.

The CARES Act made significant changes to Federal tax laws, including certain changes that were retroactive to the 2019 tax year. Changes in tax laws are accounted for in the period of enactment and the retroactive effects are recognized in these financial statements. There were no material income tax consequences of this enacted legislation on the reporting period of these financial statements.

The Consolidated Appropriations Act extended and expanded the availability of the CARES Act employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ("ARP Act"), enacted on March 11, 2021, extended and expanded the availability of the employee retention credit through December 31, 2021, however, certain provisions apply only after December 31, 2020. This new legislation expanded the group of qualifying business to include businesses with fewer than 500 employees and those who previously qualified for the Paycheck Protection Program (the "PPP Loan"). The employee retention credit is calculated to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company determined that the qualifications for the credit were met in the first, second and third quarters of 2021. During the nine months ended September 30, 2021, the Company applied for total refunds of $1.6 million of payroll taxes previously paid and recognized a corresponding reduction in compensation expenses. Of the $1.6 million, $1.3 million was recorded within cost of services and $0.2 million was recorded within general and administrative expenses during the nine months ended September 30, 2021.

The Company is subject to possible examinations not yet initiated for Federal purposes for the fiscal years 2018 through 2020. In most cases, the Company has examinations open for foreign, state, or local jurisdictions based on the particular jurisdiction's statute of limitations.

Estimated amounts related to underpayment of income taxes, including interest and penalties, are classified as a component of income tax expense in the combined statements of operations and were not material for the nine months ended September 30, 2022 and 2021. Amounts accrued for estimated underpayment of income taxes were zero as of September 30, 2022 and December 31, 2021.

**11.** **Debt**

The Company's short-term and long-term debt consist of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **December 31,**<br> **2021** |
| Short-term debt: |  |  |
| &nbsp;&nbsp;&nbsp;Strong/MDI 20-year installment loan | $2316 | $2682 |
| &nbsp;&nbsp;&nbsp;Strong/MDI 5-year equipment loan | 237 | 316 |
| &nbsp;&nbsp;&nbsp;Strong/MDI revolving credit facility | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total short-term debt | $2553 | $2998 |
| &nbsp;&nbsp;&nbsp;Long-term debt: |  |  |
| &nbsp;&nbsp;&nbsp;Tenant improvement loan | $170 | $128 |
| &nbsp;&nbsp;&nbsp;Less: current position | (35) | (23) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt, net of current portion | $135 | $105 |

---

***Strong/MDI Installment Loans***

On September 5, 2017, the Company's Canadian subsidiary, Strong/MDI, entered into a demand credit agreement, as amended and restated May 15, 2018, with a bank consisting of a revolving line of credit for up to CAD$3.5 million, subject to a borrowing base requirement, a 20-year installment loan for up to CAD$6.0 million and a 5-year installment loan for up to CAD$0.5 million. On June 7, 2021, Strong/MDI entered into a demand credit agreement (the "2021 Credit Agreement"), which amended and restated the demand credit agreement dated as of September 5, 2017. The 2021 Credit Agreement consists of a revolving line of credit for up to CAD$2.0 million subject to a borrowing base requirement, a 20-year installment loan for up to CAD$5.1 million and a 5-year installment loan for up to CAD$0.5 million. Amounts outstanding under the line of credit are payable on demand and bear interest at the prime rate established by the lender. Amounts outstanding under the installment loans bear interest at the lender's prime rate plus 0.5% and are payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loans at any time. The Strong/MDI credit facilities are secured by a lien on Strong/MDI's Quebec, Canada facility and substantially all of Strong/MDI's assets. The 2021 Credit Agreement requires Strong/MDI to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity holdings) not exceeding 2.5 to 1, a current ratio (excluding amounts due from related parties) of at least 1.3 to 1 and minimum "effective equity" of CAD$4.0 million. As of September 30, 2022, there was CAD$3.2 million, or approximately $2.3 million, of principal outstanding on the 20-year installment loan, which bears variable interest at 5.2%. As of September 30, 2022, there was CAD$0.3 million, or approximately $0.2 million, of principal outstanding on the 5-year installment loan, which also bears variable interest at 5.2%. Strong/MDI was in compliance with its debt covenants as of September 30, 2022.

In January 2023, Strong/MDI entered into a demand credit agreement (the "2023 Credit Agreement"), which amended and restated the 2021 Credit Agreement. The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million. Under the 2023 Credit Agreement: (i) the amount outstanding under the line of credit is payable on demand and bears interest at the prime rate the lender's prime rate plus 1.0%. and (ii) the amount outstanding under the installment loan bears interest at the lender's prime rate plus 0.5% and is payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loan at any time. The 2023 Credit Agreement is secured by a lien on Strong/MDI's Quebec, Canada facility and substantially all of Strong/MDI's assets. The 2023 Credit Agreement requires Strong/MDI to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity holdings) not exceeding 2.5 to 1 and a fixed charge coverage ratio of not less than 1.1 times earnings before interest, income taxes, depreciation and amortization.

As discussed in Note 15, Strong/MDI's manufacturing facility is not expected to transfer to the Company as part of the offering. The 2023 Credit Agreement, including the 20-year installment loan, which is collateralized by the manufacturing facility, is also not expected to be transferred to the Company. The Company is currently in discussions with the existing lender related to a new credit facility and is continuing to review terms and conditions with the lender. A new credit facility, if completed, would be finalized and implemented following the completion of the Separation.

***Tenant Improvement Loan***

During the fourth quarter of 2021, the Company entered into a lease for a combined office and warehouse in Omaha, Nebraska. The Company incurred total costs of approximately $0.4 million to complete the build-out of the new combined office and warehouse facility. The landlord has agreed to fund approximately 50% of the build-out costs, and the Company is required to repay the portion funded by the landlord in equal monthly installments through the end of the initial lease term in February 2027. Through the end of 2021, the Company incurred approximately $0.2 million of total costs to build out the facility, of which approximately $0.1 million was funded by the landlord. The Company completed the build-out during the first quarter of 2022 and incurred an additional $0.2 million of total costs to complete the build-out, of which approximately $0.1 million was funded by the landlord.

**12.** **Compensation and Benefit Plans**

***Retirement Plan***

Ballantyne sponsors a defined contribution 401(k) plan (the "401(k) Plan") for all eligible employees in the United States. Pursuant to the provisions of the 401(k) Plan, employees may defer up to 100% of their compensation. Ballantyne matches 50% of the amount deferred up to 6% of their compensation. The contributions made to the 401(k) Plan by Ballantyne was approximately $0.1 million during each of the nine months ended September 30, 2022 and September 30, 2021. The employees of Strong Global Entertainment, Inc. will continue to participate in the 401(k) Plan after the initial public offering.

**13.** **Leases**

The Company leases office and warehouse facilities and equipment under operating and finance leases expiring through February 2027. The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.

Right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. Certain of the leases contain extension options; however, the Company has not included such options as part of its right-of-use assets and lease liabilities because it does not expect to extend the leases. The Company measures and records a right-of-use asset and lease liability based on the discount rate implicit in the lease, if known. In cases where the discount rate implicit in the lease is not known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company's estimated incremental borrowing rate for loans with similar collateral and duration.

The Company elected to not apply the recognition requirements of Topic 842 to leases of all classes of underlying assets that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Instead, lease payments for such short-term leases are recognized in operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

The Company elected, as a lessee, for all classes of underlying assets, to not separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component.

The following tables present the Company's lease costs and other lease information (dollars in thousands):

---

| | | |
|:---|:---|:---|
| **Lease cost** | **Nine** **Months Ended** | **Nine** **Months Ended** |
|  | **September** **30, 2022** | **September** **30, 2021** |
| Finance lease cost: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | $- | $3 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities |  | 1 |
| Operating lease cost | 70 | 87 |
| Short-term lease cost | 41 | 40 |
| &nbsp;&nbsp;&nbsp;Net lease cost | $111 | $131 |

---

---

| | | |
|:---|:---|:---|
| **Other information** | **Nine** **Months Ended** | **Nine** **Months Ended** |
|  | **September** **30, 2022** | **September** **30, 2021** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| Operating cash flows from finance leases | $- | $1 |
| Operating cash flows from operating leases | $59 | $146 |
| Financing cash flows from finance leases | $- | $3 |

---

---

| | |
|:---|:---|
|  | **As of<br> September 30, 2022** |
| Weighted-average remaining lease term - operating leases (years) | 4.4 |
| Weighted-average discount rate - operating leases | 4.5% |

---

The following table presents a maturity analysis of the Company's operating lease liabilities as of September 30, 2022 (in thousands):

---

| | |
|:---|:---|
|  | **Operating Leases** |
| Remainder of 2022 | $19 |
| 2023 | 76 |
| 2024 | 78 |
| 2025 | 79 |
| 2026 | 81 |
| Thereafter | 13 |
| Total lease payments | 346 |
| Less: Amount representing interest | (33) |
| Present value of lease payments | 313 |
| Less: Current maturities | (63) |
| Lease obligations, net of current portion | $250 |

---

**14.** **Commitments, Contingencies and Concentrations**

***Concentrations***

The Company's top ten customers accounted for approximately 54% and 48% of combined net revenues during the nine months ended September 30, 2022 and September 30, 2021, respectively. Trade accounts receivable from these customers represented approximately 45% and 29% of net combined receivables at September 30, 2022 and December 31, 2021, respectively. None of the Company's customers accounted for more than 10% of its combined net revenues during the nine months ended September 30, 2022, and none of the Company's customers accounted for more than 10% of the Company's net combined receivables as of September 30, 2022. One of the Company's customers accounted for more than 10% of its combined net revenues during the nine months ended September 30, 2021. While the Company believes its relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from the Company's significant customers could have a material adverse effect on the Company's business, financial condition and results of operations. The Company could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which the Company sells its products.

***Litigation***

In the ordinary course of our business operations, we are involved, from time to time, in certain legal disputes. Ballantyne and certain of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to Ballantyne. In the Company's experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. Ballantyne has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits. The Company has agreed to indemnify Ballantyne for future losses, if any, related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to the Company in the Separation, up to an aggregate amount not to exceed $250,000 per year as well as to indemnify Ballantyne for all expenses (including legal fees) related to the defense of such claims. During 2021, the Company recorded a loss contingency reserve of approximately $0.3 million, which represents the Company's estimate of its potential losses related to the settlement of open cases. There have been no changes to this loss contingency reserve during the nine months ended September 30, 2022. When appropriate, Ballantyne may settle certain claims. The Company does not expect the resolution of these cases to have a material adverse effect on the Company's combined financial condition, results of operations or cash flows.

**15.** **Related Party Transactions**

***Related Party Transactions***

Immediately prior to the completion of the offering, we and Ballantyne intend to enter into a management services agreement that will provide a framework for our ongoing relationship with Ballantyne, whereby which Ballantyne will provide certain services to us, which could include information technology, legal, finance and accounting, human resources, tax, treasury, and other services. Pursuant to the Management Services Agreement, Ballantyne will charge us a fee that is based on its actual costs for those services in the future.

The Company manufactures its screens in an approximately 80,000 square-foot facility near Montreal, Quebec, Canada, which is owned by Strong/MDI. The facility is not expected to be transferred to the Company as part of the transactions contemplated in connection with the offering. Immediately prior to the completion of the offering, the Company and Strong/MDI intend to enter into a long-term lease agreement covering the Company's continued use of the facility. As discussed in Note 11, the 20-year installment loan, which is collateralized by the manufacturing facility, is also not expected to be transferred to the Company.

***Allocation of Corporate Expenses***

The operating results of Strong Global Entertainment have historically been disclosed as a reportable segment within the consolidated financial statements of Ballantyne enabling identification of directly attributable transactional information, functional departments and headcount. The combined balance sheet was primarily derived by reference to one of, or a combination of, Strong Global Entertainment transaction-level information, functional department or headcount. Revenue and Cost of revenue were derived from transactional information specific to Strong Global Entertainment products and services. Directly attributable operating expenses were derived from activities relating to Strong Global Entertainment functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from Ballantyne. The allocated costs for corporate functions included, but were not limited to, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Strong Global Entertainment level. These costs were allocated on a basis of revenue, headcount or other measures Strong Global Entertainment has determined as reasonable.

The combined statements of operations of the Company reflect allocations of general corporate expenses from Ballantyne including expenses related to corporate services, such information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing, shared facilities and other shared services. These costs were allocated based on a basis of revenue, headcount, or other measures the Company has determined as reasonable. These allocations are primarily reflected within operating expenses in the combined statements of operations. The amount of these allocations from Ballantyne for the nine months ended September 30, 2022 and September 30, 2021 was $0.7 million and $0.8 million, respectively, all of which related to general and administrative expense. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, the Company during the periods presented.

**16.** **Subsequent Events**

Effective December 23, 2022, Ballantyne changed its name to FG Group Holdings Inc. The name change was approved by Ballantyne's stockholders at its annual meeting held on December 6, 2021.

The Company has evaluated its subsequent events from September 30, 2022 through the date these combined financial statements were issued, January 17, 2023, and determined that there are no other subsequent events requiring disclosure in these combined financial statements.

**2,000,000** **Class A Common Voting Shares**

![](image_001.jpg)

**Strong Global Entertainment, Inc.**

**PRELIMINARY PROSPECTUS**

**ThinkEquity**

, 2023

Through and including , 2023 (the 25<sup>th</sup> day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table indicates the expenses to be incurred in connection with the offering described in this registration statement, other than underwriting discounts, expenses and commissions, all of which will be paid by us. All amounts are estimated except the SEC registration fee, the FINRA filing fee and the NYSE American listing fee.

---

| | |
|:---|:---|
| SEC registration fee | $3199 |
| FINRA filing fee | $3249 |
| NYSE American listing fee | $50000 |
| Accounting fees and expenses | $590793 \* |
| Legal fees and expenses | $1295350 \* |
| Transfer agent's and registrar's fees and expenses | $15900 \* |
| Printing and engraving expenses | $5000<br> \* |
| Miscellaneous fees | $36509 \* |
| Total | $2000000 \* |

---

\*Estimated

**Item 14. Indemnification of Directors and Officers**

The corporate laws of British Columbia allow the Registrant to indemnify its directors and officers or former directors and officers and its corporate Articles, as amended (the "Registrant's Articles"), require the Registrant (subject to the provisions of the BCBCA noted below), to indemnify its directors, former directors, alternate directors and their heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Registrant must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Registrant on the terms of the indemnity contained in the Registrant's Articles, as amended.

For the purposes of such an indemnification pursuant to the Registrant's Articles:

○ "eligible
 penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
 and

○ "eligible
 proceeding" means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a
 director, former director or alternative director of the Registrant (an "eligible party") or any of the heirs and legal
 personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternative director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is
 or may be joined as a party, or

(2) is
 or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding.

In addition, under the BCBCA, the Registrant may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party (which pursuant to the provisions of the BCBCA includes directors, former directors, officers and former officers) in respect of that proceeding, provided that the Registrant first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the restrictions noted below, the eligible party will repay the amounts advanced.

Notwithstanding the provisions of the Registrant's Articles, as amended, noted above, under the BCBCA the Registrant must not indemnify an eligible party or pay the expenses of an eligible party, if any of the following circumstances apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the company was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the company is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful.

In addition, if an eligible proceeding is brought against an eligible party by or on behalf of the Registrant or by or on behalf of an associated corporation, the Registrant must not do either of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) indemnify the eligible party under section 160(a) of the BCBCA in respect of the proceeding; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) pay the expenses of the eligible party in respect of the proceeding.

Notwithstanding any of the foregoing, and whether or not payment of expenses or indemnification has been sought, authorized or declined under the BCBCA or the Registrant's Articles, on the application of the Registrant or an eligible party, the Supreme Court of British Columbia may do one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) order a company to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) order a company to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) order the enforcement of, or any payment under, an agreement of indemnification entered into by a company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) order a company to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) make any other order the court considers appropriate.

The Registrant intends to enter into indemnification agreements with each of its directors and officers. The indemnification agreements will provide the directors and officers with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the Registrant's Articles, as amended, and the BCBCA, subject to certain exceptions contained in those agreements.

The Registrant maintains standard policies of insurance under which coverage is provided (a) to its directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act, and (b) to the Registrant with respect to payments which may be made by the Registrant to such officers and directors pursuant to the above indemnification provisions or otherwise as a matter of law.

The proposed form of Underwriting Agreement filed as Exhibit 1.1 to this registration statement provides for indemnification under certain conditions of us, our directors, our officers and persons who control us within the meaning of the Securities Act, against certain liabilities.

**Item 15. Recent Sales of Unregistered Securities**

None.

**Item 16. Exhibits**

(a) Exhibits.

The following list describes the exhibits filed as part of this registration statement:

---

| | |
|:---|:---|
| **EXHIBIT**<br>**NUMBER** | <br>**DESCRIPTION OF DOCUMENT** |
| 1.1 | [Form of Underwriting Agreement by and among Strong Global Entertainment, Inc., FG Group Holdings Inc., Strong/MDI Screen Systems, Inc. and ThinkEquity LLC.](ex1-1.htm) |
| 3.1\* | [Notice of Articles of Registrant, dated April 5, 2022.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex3-1.htm) |
| 3.2\* | [Articles of Registrant, dated April 5, 2022.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex3-2.htm) |
| 4.1\* | [Specimen Class A Common Voting Share Certificate.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex4-1.htm) |
| 4.2 | [Form of Representative's Warrant (included in Exhibit 1.1).](ex1-1.htm) |
| 5.1\* | [Opinion of Gowling WLG (Canada) LLP.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222033598/ex5-1.htm) |
| 5.2\* | [Opinion of Loeb & Loeb LLP.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222024218/ex5-2.htm) |
| 10.1\* | [Authorized Reseller Agreement, dated as of January 21, 2010, between Ballantyne Strong, Inc. and NEC Display Solutions of America, Inc.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex10-1.htm) |
| 10.2† | [Demand Credit Agreement, dated as of January 13, 2023, between Canadian Imperial Bank of Commerce and Strong/MDI Screen Systems Inc.](ex10-2.htm) |
| 10.3\* | [Form of Indemnity Agreement between Registrant and its officers and directors.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222024218/ex10-3.htm) |
| 10.4† | [Form of Master Asset Purchase Agreement between Strong/MDI Screen Systems, Inc., a company existing under the laws of Quebec and Strong/MDI Screen Systems Inc., a company incorporated under the laws of British Columbia.](ex10-4.htm) |
| 10.5\* | [Form of Confirmatory of Ownership Assignment of Intellectual Property between Strong/MDI Screen Systems, Inc., a company existing under the laws of Quebec and Strong/MDI Screen Systems Inc., a company incorporated under the laws of British Columbia](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex10-5.htm) |
| 10.6† | [Form of FG Group Holdings Asset Transfer Agreement between FG Group Holdings Inc. and Strong Technical Services, Inc.](ex10-6.htm) |
| 10.7 | [Form of Patent Assignment between FG Group Holdings Inc., and Strong Technical Services, Inc.](ex10-7.htm) |
| 10.8† | [Form of Management Services Agreement by and between FG Group Holdings Inc. and Strong Global Entertainment Inc.](ex10-8.htm) |
| 10.9\* | [Form of Lease Agreement between Strong/MDI Screen Systems, Inc. and Strong/MDI Screen Systems, Inc.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex10-9.htm) |
| 10.10+ | [2023 Share Compensation Plan.](ex10-10.htm) |
| 10.11+ | [Form of Employment Agreement between Strong Technical Services, Inc. and Mark D. Roberson.](ex10-11.htm) |
| 10.12+ | [Form of Employment Agreement between Strong Technical Services, Inc. and Todd R. Major.](ex10-12.htm) |
| 10.13+ | [Form of Employment Agreement between Strong Technical Services, Inc. and Ray F. Boegner.](ex10-13.htm) |
| 10.14\* | [Assignment and Attachment Agreement, dated as of March 3, 2022, between Strong Studios, Inc. and Landmark Studio Group, LLC.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex10-14.htm) |
| 14.1\* | [Code of Business Conduct and Ethics.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex14-1.htm) |
| 21.1\* | [List of Subsidiaries of Registrant.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/ex21-1.htm) |
| 23.1\* | [Consent of Gowling WLG (Canada) LLP (included in Exhibit 5.1).](https://www.sec.gov/Archives/edgar/data/1893448/000149315222033598/ex5-1.htm) |
| 23.2\* | [Consent of Loeb & Loeb LLP (included in Exhibit 5.2).](https://www.sec.gov/Archives/edgar/data/1893448/000149315222024218/ex5-2.htm) |
| 23.3 | [Consent of Haskell & White LLP.](ex23-3.htm) |
| 24\* | [Power of Attorney.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222009293/forms-1.htm#POA) |
| 107\* | [Filing Fee Table.](https://www.sec.gov/Archives/edgar/data/1893448/000149315222033598/ex107.htm) |

---

+ Indicates management contract or compensatory plan.

† Exhibits and schedules to this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

\* Filed previously.

(b) Financial Statement Schedules.

See index to financial statements on page F-1. All schedules have been omitted because they are not required or are not applicable.

**Item 17. Undertakings**

The undersigned registrant hereby undertakes to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Include
 any prospectus required by Section 10(a)(3) of the Securities Act, as amended;

(ii) Reflect
 in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration
 statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
 the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
 offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities
 Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price
 set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

(iii) Include
 any additional or changed material information on the plan of distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) For purposes of determining any liability under the Securities Act, treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) For the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Any
 preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to the
 Rule 424;

2. Any
 free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
 the undersigned registrant;

3. The
 portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
 or its securities provided by or on behalf of the undersigned registrant; and

4. Any
 other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Provide to the underwriters, at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

**SIGNATURES**

In accordance with the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form S-1 and authorized this registration statement or amendment to be signed on its behalf by the undersigned, in Charlotte, North Carolina, on January 17, 2023.

---

| | |
|:---|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** | **STRONG GLOBAL ENTERTAINMENT, INC.** |
| By: | */s/ Mark D. Roberson* |
|  | Mark D. Roberson, Chief Executive Officer (Principal Executive Officer) |
| By: | */s/ Todd R. Major* |
|  | Todd R. Major, Chief Financial Officer (Principal Accounting Officer, Principal Financial Officer) |

---

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities held on the dates indicated.

---

| | |
|:---|:---|
| */s/ Mark D. Roberson* | Date: January 17, 2023 |
| Mark D. Roberson, Chief Executive Officer, Director |  |
| (Principal Executive Officer) |  |
| */s/ Todd R. Major* | Date: January 17, 2023 |
| Todd R. Major, Chief Financial Officer |  |
| (Principal Accounting and Financial Officer) |  |
| *\** | Date: January 17, 2023 |
| D. Kyle Cerminara, Chairman |  |
| *\** | Date: January 17, 2023 |
| Richard E. Govignon Jr., Director |  |
| *\** | Date: January 17, 2023 |
| John W. Struble, Director |  |
| *\** | Date: January 17, 2023 |
| Marsha G. King, Director |  |

---

---

| | |
|:---|:---|
| \*By: | */s/ Mark D. Roberson* |
|  | Attorney-in-Fact |
| \*By: | */s/ Todd R. Major* |
|  | Attorney-in-Fact |

---

## Exhibit 1.1

**Exhibit 1.1**

**UNDERWRITING AGREEMENT** 

**between**

**STRONG GLOBAL ENTERTAINMENT, INC.**

**and**

**THINKEQUITY LLC**

**as Representative of the Several Underwriters**

**STRONG GLOBAL ENTERTAINMENT, INC.**

**<u>UNDERWRITING AGREEMENT</u>**

New York, New York

[●], 2023

ThinkEquity LLC

As Representative of the several Underwriters named on Schedule 1 attached hereto

17 State Street, 22<sup>nd</sup> Fl

New York, NY 10004

Ladies and Gentlemen:

The undersigned, Strong Global Entertainment, Inc., a company incorporated under the Business Corporations Act (British Columbia) (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries or affiliates of Strong Global Entertainment, Inc., the "**Company**"), hereby confirms its agreement (this "**Agreement**") with ThinkEquity LLC (hereinafter referred to as "you" (including its correlatives) or the "**Representative**") and with the other underwriters named on <u>Schedule 1</u> hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively called the "**Underwriters**" or, individually, an "**Underwriter**") as set forth below.

The Company is a wholly-owned subsidiary of Strong/MDI Screen Systems, Inc. ("**Strong/MDI**" or "**Parent**"), a company incorporated under the laws of Quebec, Canada. Strong/MDI is a wholly-owned subsidiary of FG Group Holdings, Inc., a Delaware corporation ("**FG Group Holdings**" or "**Manager**"). Prior to the date hereof, the Company entered into agreements to (i) acquire all of the assets comprising FG Group Holdings' entertainment business, except the real estate and manufacturing plant in Joliette, Quebec, Canada (the "**Joliette Plant**", which the Company will lease on a long-term basis), and (ii) assume some of the liabilities relating thereto. In furtherance of the transactions described in the Prospectus (as defined below), the Company has entered into or will enter into, as the case may be, inter alia, the following agreements: (i) a master asset purchase agreement between the Company, and Strong/MDI (the "**Master Asset Purchase Agreement**"); (ii) the asset transfer agreement, between FG Group Holdings and the Company (the "**FG Group Holdings Asset Transfer Agreement**"), and (iii) a management services agreement between the Company and FG Group Holdings (the "**Management Services Agreement**"). The Master Asset Purchase Agreement, the FG Group Holdings Asset Transfer Agreement, and the Management Services Agreement are hereinafter collectively referred to as the "**Transaction Documents**" and singly as a "**Transaction Document**."

1. <u>Purchase and Sale of Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Firm Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.1. <u>Nature and Purchase of Firm Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the several Underwriters, an aggregate of [●] Class A Common Voting Shares (the "Firm Shares"), no par value in the authorized share structure of the Company (the "Common Shares").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their respective names on <u>Schedule 1</u> attached hereto and made a part hereof at a purchase price of $[●] per Firm Share (93% of the per Firm Share offering price to the public). The Firm Shares are to be offered initially to the public at the offering price of $[●], which is also set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.2. <u>Firm Shares Payment and Delivery</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Delivery and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on the second (2<sup>nd</sup>) Business Day following the date hereof (or the third (3<sup>rd</sup>) Business Day following the date hereof if the Registration Statement is declared effective after 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Sullivan & Worcester LLP, 1633 Broadway, New York, NY 10019 ("Representative Counsel"), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Shares is called the "Closing Date."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Payment for the Firm Shares shall be made on the Closing Date by wire transfer in U.S. dollars (same day) funds, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares (or through the facilities of the Depository Trust Company ("DTC")) for the account of the Underwriters. The Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all of the Firm Shares. The term "Business Day" means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Over-allotment Option</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.1. <u>Option Shares</u>. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the Company hereby grants to the Underwriters an option to purchase up to [•] additional Common Shares, representing fifteen percent (15%) of the Firm Shares sold in the offering, from the Company (the "Over-allotment Option"). Such [●] additional Common Shares, the net proceeds of which will be deposited with the Company's account, are hereinafter referred to as "Option Shares." The purchase price to be paid per Option Share shall be equal to the price per Firm Share set forth in Section 1.1.1 hereof. The Firm Shares and the Option Shares are hereinafter referred to together as the "Public Securities." The offering and sale of the Public Securities is hereinafter referred to as the "Offering."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.2. <u>Exercise of Option</u>. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within forty-five (45) days after the Closing Date. The Underwriters shall not be under any obligation to purchase any Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (the "Option Closing Date"), which shall not be later than one (1) full Business Day after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Shares, subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of Option Shares specified in such notice and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of Option Shares then being purchased as set forth in <u>Schedule 1</u> opposite the name of such Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.3. <u>Payment and Delivery</u>. Payment for the Option Shares shall be made on the Option Closing Date by wire transfer in U.S. dollars (same day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the Underwriters) representing the Option Shares (or through the facilities of DTC) for the account of the Underwriters. The Option Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least one (1) full Business Day prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Shares except upon tender of payment by the Representative for applicable Option Shares. The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the Closing Date, the term "Closing Date" shall refer to the time and date of delivery of the Firm Shares and Option Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Representative's Warrants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.1. <u>Purchase Warrants</u>. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date a warrant ("Representative's Warrant") to purchase up to an aggregate of [•] Common Shares, representing 5% of the Firm Shares, for an aggregate purchase price of $100.00. In the event that the Representative exercises the Over-allotment Option, the Company agrees to issue and sell to the Representative (and/or its designees) on each Option Closing Date a Representative's Warrant for the purchase of an aggregate number of shares of Common Shares equal to five percent (5%) of the Option Shares sold on such Option Closing Date. Each Representative's Warrant will be issued in the form attached hereto as <u>Exhibit A</u>, and shall be exercisable, in whole or in part, commencing on a date which is one hundred eighty (180) days after the effective date (the "Effective Date") of the Registration Statement (as defined in Section 2.1.1 below) and expiring on the five (5) year anniversary of the Effective Date at an initial exercise price per Common Share of $[•], which is equal to one hundred twenty five percent (125%) of the Firm Share public offering price. The Representative's Warrant and the Common Shares issuable upon exercise thereof are hereinafter referred to together as the "Representative's Securities." The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative's Warrant and the underlying Common Shares during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative's Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.2. <u>Delivery</u>. Delivery of the Representative's Warrant shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as the Representative may request.

2. <u>Representations and Warranties of the Company</u>. The Company, FG Group Holdings and Strong/MDI (collectively, the "Company Group") each, severally and not jointly, represent and warrant to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of the Option Closing Date, if any, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Filing of Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1.1. <u>Pursuant to the Securities Act</u>. The Company has filed with the U.S. Securities and Exchange Commission (the "Commission") a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-[•]), including any related prospectus or prospectuses, for the registration of the Public Securities and the Representative's Securities under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement and amendment or amendments have been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act (the "Securities Act Regulations") and contains and will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the "Rule 430A Information")), is referred to herein as the "Registration Statement." If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term "Registration Statement" shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been declared effective by the Commission on the date hereof.

**Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a "Preliminary Prospectus." The Preliminary Prospectus, subject to completion, dated [•], 2023, that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the "Pricing Prospectus." The final prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the "Prospectus." Any reference to the "most recent Preliminary Prospectus" shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement.** 

**"Applicable Time" means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.**

**"Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 of the Securities Act Regulations ("Rule 433"), including without limitation any "free writing prospectus" (as defined in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the Commission by the Company, (ii) a "road show that is a written communication" within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company's records pursuant to Rule 433(g).**

**"Issuer General Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a "*bona fide* electronic road show," as defined in Rule 433 (the "Bona Fide Electronic Road Show")), as evidenced by its being specified in <u>Schedule 2-B</u> hereto.** 

**"Issuer Limited Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.**

**"Pricing Disclosure Package" means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on <u>Schedule 2-A</u> hereto, all considered together.** 

**For the purposes of this Agreement "Knowledge" means, when referring to the 'knowledge' of the Company, or any similar phrase or qualification based on knowledge, the actual knowledge of Company's officers and/or employees, and the knowledge that each such person would have obtained after making due and appropriate inquiry with respect to the particular matter in question.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1.2. <u>Pursuant to the Exchange Act</u>. The Company has filed with the Commission a Form 8-A (File Number 000-[•]) providing for the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of the Common Shares. The registration of the Common Shares and related Form 8-A have become effective under the Exchange Act on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Stock Exchange Listing</u>. The Common Shares have been approved for listing on the NYSE American LLC (the "Exchange"), subject to official notice of issuance, and the Company has taken no action designed to, or likely to have the effect of, delisting the Common Shares from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>No Stop Orders, etc</u>. Neither the Commission nor, to the Company's knowledge, any state regulatory authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company's knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Disclosures in Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.1. <u>Compliance with Securities Act and 10b-5 Representation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with the Underwriters' Information (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any Issuer Limited Use Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following disclosure contained in the "Underwriting" section of the Registration Statement, the Pricing Prospectus or the Prospectus: (i) the first sentence in the first paragraph and the table in the second paragraph under the caption "Underwriting"; (ii) the second sentence of the subsection entitled "Discounts, Commissions and Reimbursement" related to concessions; (iii) the first three paragraphs under the subsection entitled "Price Stabilization, Short Positions and Penalty Bids"; and (iv) the subsections entitled "Passive Market Making", "Electronic Distribution", "Selling Restrictions" and "Offering Restrictions Outside The United States" (the "Underwriters' Information").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters' Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.2. <u>Disclosure of Agreements</u>. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material to the Company's business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and when executed and delivered, will constitute, or constituted, as the case may be, the valid and binding agreements of the Company, as applicable, enforceable against the Company, as applicable and, to the Company's knowledge, the other parties thereto, in accordance with their respective terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company's knowledge, any other party is in default thereunder and, to the Company's knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the Company's knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a "Governmental Entity"), including, without limitation, those relating to environmental laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.3. <u>Prior Securities Transactions</u>. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.4. <u>Regulations</u>. The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal, state, local and all foreign regulation on the Offering and the Company's business as currently contemplated are correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed, except as which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.5. <u>No Other Distribution of Offering Materials</u>. The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the Offering other than any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus and other materials, if any, permitted under the Securities Act and consistent with Section 3.2 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Changes After Dates in Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.1. <u>No Material Adverse Change</u>. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of operations of the Company, nor any change or development that, singularly or in the aggregate, would result in a material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, business plan or, assets of the Company (a "Material Adverse Change"); (ii) there has been no Manager Adverse Change or Parent Adverse Change (each as defined herein); (iii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iv) no officer (as defined in Rule 16a-1(f) of the Exchange Act) or director of the Company has resigned from any position with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.2. <u>Recent Securities Transactions, etc</u>. Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Independent Accountants</u>. To the knowledge of the Company and FG Group Holdings, Haskell & White LLP (the "Auditor"), whose report is filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 <u>Financial Statements, etc</u>. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present in all material aspects, the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"), consistently applied throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration Statement present fairly in all material aspects, the information required to be stated therein. Except as included therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and present fairly in all material aspects, the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company's financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each, a "Subsidiary" and, collectively, the "Subsidiaries"), has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries, or, other than in the course of business, any grants under any stock compensation plan, and (d) there has not been any Material Adverse Change in the Company's long-term or short-term debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 <u>Authorized Capital; Options, etc</u>. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued Common Shares or any security convertible or exercisable into Common Shares, or any contracts or commitments to issue or sell Common Shares or any such options, warrants, rights or convertible securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 <u>Valid Issuance of Securities, etc.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9.1. <u>Outstanding Securities</u>. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission or similar rights with respect thereto or put rights, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights of first refusal or rights of participation of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized Common Shares conform in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding Common Shares were at all relevant times either registered under the Securities Act and the applicable state securities or "blue sky" laws or, based in part on the representations and warranties of the purchasers of such securities, exempt from such registration requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9.2. <u>Securities Sold Pursuant to this Agreement</u>. The Public Securities and Representative's Securities have been duly authorized for issuance and sale and, when issued and paid for pursuant to the terms of this Agreement, and the Representative's Warrant for the Representative's Securities, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative's Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public Securities and Representative's Securities has been duly and validly taken. The Public Securities and Representative's Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 <u>Registration Rights of Third Parties</u>. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities in a registration statement to be filed by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 <u>Validity and Binding Effect of Agreements</u>. This Agreement, each Transaction Document and the Representative's Warrant Agreement have been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of each member of the Company Group, enforceable against each member of the Company Group in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 <u>No Conflicts, etc</u>. The execution, delivery and performance by each member of the Company Group, as applicable of this Agreement, each Transaction Document, the Representative's Warrant and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by each member of the Company Group, as applicable with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a breach of, or conflict with any of the terms and provisions of, or constitute a default under, or result in the creation, modification, termination or imposition of any lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, lease, loan agreement or any other agreement or instrument, franchise, license or permit to which the Company is a party or as to which any property of the Company is a party; (ii) result in any violation of the provisions of the Company's Articles, the Manager's Certificate of Incorporation or the Parent's Articles (collectively, as the same may be amended or restated from time to time, the "Charter") or the by-laws of the Manager (as the same may be amended or restated from time to time, the "Bylaws"); or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof, except in the cases of clauses (i) and (iii) above, for such breaches or conflicts which would not reasonably be expected to have a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 <u>No Defaults; Violations</u>. No default exists in the due performance and observance of any term, covenant or condition of any license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which any member of the Company Group is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject, except for any of the foregoing that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. Each member of the Company Group is not in violation of any term or provision of its Charter or Bylaws, or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 <u>Corporate Power; Licenses; Consents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14.1. <u>Conduct of Business</u>. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, each member of the Company Group has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except for any of the foregoing that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14.2. <u>Transactions Contemplated Herein</u>. Each member of the Company Group has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this Agreement and the Representative's Warrant and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal, state and foreign securities laws, the rules and regulations of the Exchange Act and the rules and regulations of the Financial Industry Regulatory Authority, Inc. ("FINRA").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 <u>D&O Questionnaires</u>. To the Company's knowledge, all information contained in the questionnaires (the "Questionnaires") completed by each of the Company's directors, officers and principal shareholders immediately prior to the Offering (the "Insiders") as supplemented by all information concerning the Company's directors, officers and principal shareholders as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.24 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 <u>Litigation; Governmental Proceedings</u>. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company's knowledge, threatened against, or involving the Company or, to the Company's knowledge, any executive officer or director, which has not been disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus or in connection with the Company's listing application for the listing of the Public Securities on the Exchange, and which is required to be disclosed. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to each member of the Company Group's knowledge, threatened against, or involving any member of the Company Group or, to the Company Group's knowledge, any executive officer or director which would reasonably be expected to result in a Material Adverse Change, which has not been disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus or in connection with the Company's listing application for the listing of the Public Securities on the Exchange, and which is required to be disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 <u>Good Standing</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17.1. The Company has been duly incorporated and is validly existing as a company under the *Business Corporations Act* (British Columbia) and is in good standing with respect to the filing of annual reports with theBritish Columbia Register of Companies as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to be so qualified or in good standing, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17.2. Manager has been duly incorporated and is validly existing as a corporation and is in good standing under the laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a material adverse change in the financial position or results of operations of Manager, nor any change or development that, singularly or in the aggregate, would result in a material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, business plan or assets of Manager (a "Manager Adverse Change").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17.3. Parent has been duly incorporated and is validly existing as a corporation and is in good standing under the laws of Quebéc, Canada as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to be so qualified or in good standing, singularly or in the aggregate, would not have or reasonably be expected to result in a material adverse change in the financial position or results of operations of Parent, nor any change or development that, singularly or in the aggregate, would result in a material adverse change in or affecting the condition (financial or otherwise), results of operations, business, business plan or assets of Parent (a "Parent Adverse Change").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 <u>Insurance</u>. The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks which the Company believes is adequate, including, but not limited to, directors and officers insurance coverage at least equal to $5,000,000 all such insurance is in full force and effect. As of the date hereof, the Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 <u>Transactions Affecting Disclosure to FINRA</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.1. <u>Finder's Fees</u>. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder's, consulting or origination fee by any member of the Company Group or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company's knowledge, any of its shareholders that may affect the Underwriters' compensation, as determined by FINRA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.2. <u>Payments Within Twelve (12) Months</u>. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the date hereof, other than the payment to the Underwriters as provided hereunder in connection with the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.3. <u>Use of Proceeds</u>. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.4. <u>FINRA Affiliation</u>. To the Company's knowledge, there is no (i) officer or director of the Company, (ii) beneficial owner of five percent (5%) or more of any class of the Company's securities or (iii) beneficial owner of the Company's unregistered equity securities which were acquired during the one hundred eighty (180) day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA). Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the proceeds from the sale of the Public Securities to repay any outstanding debt owed to any affiliate of any Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19.5. <u>Information</u>. All information provided by the Company and, to the Company's knowledge, all the information provided by the Insiders in their FINRA questionnaires to Representative Counsel specifically for use by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 <u>Foreign Corrupt Practices Act</u>. To the knowledge of each member of the Company Group, each member of the Company Group has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the "FCPA"), or any provisions of the Corruption of Foreign Officials Act (Canada), if applicable. None of the Company, any member of the Company Group and its Subsidiaries or, to each member of the Company Group's knowledge, any director, officer, agent, employee or affiliate of a member of the Company Group and its Subsidiaries or any other person acting on behalf of a member of Company Group and its Subsidiaries, has, directly or indirectly, given or agreed to give any unlawful money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company or a member of the Company Group (or assist it in connection with any actual or proposed transaction) that (i) might subject any member of the Company Group to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change, (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of any member of the Company Group, (iv) violated or is in violation of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or regulation, (v) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment, or (vi) received notice of any investigation, proceeding or inquiry by any Governmental Entity regarding any of the matters in clauses (i)-(v) above; and any member of the Company Group and, to the knowledge of any member of the Company Group, the Company Group's affiliates have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 <u>Compliance with OFAC</u>. None of the members of the Company Group and its Subsidiaries or, to the members of the Company Group's knowledge, any director, officer, agent, employee or affiliate of any member of the Company Group and its Subsidiaries or any other person acting on behalf of a member of the Company Group and its Subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"), and any member of the Company Group will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 <u>Money Laundering Laws</u>. The operations of any member of the Company Group and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended, and the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the "Money Laundering Laws"); and no action, suit or proceeding by or before any Governmental Entity involving any member of the Company Group with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 <u>Officers' Certificate</u>. Any certificate signed by any duly authorized officer of the Company, FG Group Holdings or Strong/MDI and delivered to you or to Representative Counsel shall be deemed a representation and warranty by the Company, FG Group Holdings or Strong/MDI, as applicable, to the Underwriters as to the matters covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 <u>Lock-Up Agreements. Schedule 3</u> hereto contains a complete and accurate list of the Company's officers (as defined in Rule 16a-1(f) of the Exchange Act), directors and each owner of the Company's outstanding Common Shares (or securities convertible or exercisable into Common Shares) who will be subject to the Lock-Up Agreement (as defined below) (collectively, the "Lock-Up Parties"). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as <u>Exhibit B</u> (the "Lock-Up Agreement"), prior to the execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 <u>Subsidiaries</u>. All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on the assets, business or operations of the Company taken as a whole. The Company's ownership and control of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 <u>Related Party Transactions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26.1. <u>Business Relationships</u>. There are no business relationships or related party transactions involving the Company (within the scope of Item 404 of Regulation S-K) or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26.2. <u>No Unconsolidated Entities</u>. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company's liquidity or the availability of or requirements for its capital resources required to be described in the Pricing Disclosure Package and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26.3. <u>No Loans or Advances to Affiliates</u>. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of (i) any of the officers or directors of the Company, (ii) any other affiliates of the Company or (iii) any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, which are, in the case of clauses (ii) and (iii), required to be disclosed in the Registration Statement, the Pricing Disclosure Package or the Prospectus.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 <u>Board of Directors</u>. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the Prospectus captioned "Management." The qualifications of the persons serving as board members and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the "Sarbanes-Oxley Act") applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an "audit committee financial expert," as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors qualify as "independent," as defined under the listing rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28 <u>Sarbanes-Oxley Compliance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28.1. <u>Disclosure Controls</u>. The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15 under the Exchange Act Regulations applicable to it, and, except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, such controls and procedures are effective as of the date hereof to ensure that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company's Exchange Act filings and other public disclosure documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28.2. Compliance. The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company's future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley Act (it being understood that this subsection shall not require the Company to comply with Section 404 of the Sarbanes-Oxley Act as of an earlier date than it would otherwise be required to so comply under applicable law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.29 <u>Accounting Controls</u>. The Company is in the process of establishing systems of "internal control over financial reporting" (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses (as defined in Rule 12b-2 of the Exchange Act) in its internal controls. The Company's auditors and the Audit Committee of the Board of Directors of the Company have not been advised of: (i) any significant deficiencies and material weaknesses (each as defined in Rule 12b-2 of the Exchange Act) in the design or operation of internal controls over financial reporting which are known to the Company's management and that have adversely affected or are reasonably likely to adversely affect the Company' ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company's management, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.30 <u>No Investment Company Status</u>. The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an "investment company," as defined in the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.31 <u>No Labor Disputes</u>. Except as would not reasonably be expected to result in a Material Adverse Change, no labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.32 <u>Intellectual Property Rights</u>. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights necessary for the conduct of the business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus ("Intellectual Property Rights"). To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change; and (E) to the Company's knowledge, no employee of the Company is in or has ever been in, violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee's employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company's knowledge, all material technical information developed by and belonging to the Company which has not been patented or disclosed in a patent application has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any material contractual obligation binding on the Company or, to the Company's knowledge, any of its officers, directors or employees, or otherwise in material violation of the rights of any persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.33 <u>Taxes</u>. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof, except where the failure to do so would not reasonably be expected to result in a Material Adverse Change. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective Subsidiary, except where the failure to do so would not reasonably be expected to result in a Material Adverse Change. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all material accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters or as would not reasonably be expected to result in a Material Adverse Change, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term "taxes" means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term "returns" means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.34 <u>ERISA Compliance</u>. Except as would not reasonably be expected to result in a Material Adverse Change, the Company and any "employee benefit plan" (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, "ERISA")) established or maintained by the Company or its "ERISA Affiliates" (as defined below) are in compliance in all respects with ERISA. "ERISA Affiliate" means, with respect to the Company, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the "Code") of which the Company is a member. No "reportable event" (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any "employee benefit plan" established or maintained by the Company or any of its ERISA Affiliates. No "employee benefit plan" established or maintained by the Company or any of its ERISA Affiliates, if such "employee benefit plan" were terminated, would have any "amount of unfunded benefit liabilities" (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would reasonably be expected to cause the loss of such qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.35 <u>Compliance with Laws</u>. The Company: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company ("Applicable Laws"), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any warning letter, untitled letter or other correspondence or notice from any other governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws ("Authorizations"), except as to noncompliance that would not reasonably be expected to have a Material Adverse Change; (C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of any term of any such Authorizations; (D) has not received written notice of any material claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third party is considering any such material claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received written notice that any governmental authority has taken, is taking or intends to take material action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such governmental authority is considering such material action; (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, "dear doctor" letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company's knowledge, no third party has initiated, conducted or intends to initiate any such notice or action as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.36 <u>Ineligible Issuer</u>. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at the date hereof, the Company was not and is not an "ineligible issuer," as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.37 <u>Real Property</u>. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and each of its Subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries; and all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.38 <u>Contracts Affecting Capital</u>. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company's liquidity or the availability of or requirements for its capital resources required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described or incorporated by reference as required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.39 <u>Loans to Directors or Officers</u>. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the officers or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.40 <u>Smaller Reporting Company</u>. As of the time of filing of the Registration Statement, the Company was a "smaller reporting company," as defined in Rule 12b-2 of the Exchange Act Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.41 <u>Industry Data</u>. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company's good faith estimates that are made on the basis of data derived from such sources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.42 <u>Emerging Growth Company</u>. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly in or through any Person authorized to act on its behalf in any Testing-the Waters Communication) through the date hereof, the Company has been and is an "emerging growth company," as defined in Section 2(a) of the Securities Act (an "Emerging Growth Company"). "Testing-the-Waters Communication" means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.43 <u>Testing-the-Waters Communications</u>. The Company has not (i) alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters Communications with the written consent of the Representative and with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company confirms that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications other than those listed on <u>Schedule 2-C</u> hereto. "Written Testing-the-Waters Communication" means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.44 <u>Electronic Road Show</u>. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the Securities Act Regulations such that no filing of any "road show" (as defined in Rule 433(h) of the Securities Act Regulations) is required in connection with the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.45 <u>Margin Securities</u>. The Company owns no "margin securities" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), and none of the proceeds of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Common Shares to be considered a "purpose credit" within the meanings of Regulation T, U or X of the Federal Reserve Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.46 <u>Environmental Laws</u>. To the Company's knowledge, the Company and its Subsidiaries are in compliance with all foreign, federal, state, local and foreign legally-binding rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety (to the extent relating to exposure to hazardous or toxic substances) or the environment which are applicable to their businesses ("Environmental Laws"), except the failure to comply would not, singularly or in the aggregate, reasonably be expected to have a Material Adverse Change, or as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any of its Subsidiaries (or, to any member of the Company Group's knowledge, any other entity for whose acts or omissions the Company or any of its Subsidiaries is or may otherwise be liable) upon any of the property now or, to any member of the Company Group's knowledge, previously owned or leased by the Company or any of its Subsidiaries, or upon any other property, in violation of any Environmental Law or which would, under any Environmental Law, give rise to any liability, except for any violation or liability which would not reasonably be expected to result, singularly or in the aggregate with all such violations and liabilities, in a Material Adverse Change; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which any member of the Company Group has knowledge, except for any such disposal, discharge, emission or other release of any kind which would not be expected to result, singularly or in the aggregate, in a Material Adverse Change. In the ordinary course of business, the members of the Company Group, and the Company and its Subsidiaries, conduct periodic reviews of the effect of Environmental Laws on their business and assets, in the course of which they identify and evaluate any associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or governmental permits issued thereunder, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such reviews, the members of the Company Group and the Company and its Subsidiaries have reasonably concluded that such associated costs and liabilities would not reasonably be expected to result, singularly or in the aggregate, in a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.47 <u>Forward-Looking Statements</u>. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the Registration Statement, Pricing Disclosure Package or Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

3. <u>Covenants of the Company</u>. The Company covenants and agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Amendments to Registration Statement</u>. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Federal Securities Laws</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.1. <u>Compliance</u>. The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public Securities and Representative's Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Public Securities and Representative's Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its reasonable best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.2. <u>Continued Compliance</u>. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations ("Rule 172"), would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.3. <u>Exchange Act Registration</u>. For a period of two (2) years after the date of this Agreement, the Company shall use its best efforts to maintain the registration of the Common Shares under the Exchange Act. The Company shall not deregister the Common Shares under the Exchange Act without the prior written consent of the Representative, provided that such provision shall not unreasonably prevent a sale, merger or similar transaction involving the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.4. <u>Free Writing Prospectuses</u>. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a "free writing prospectus," or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus hereto and any "road show that is a written communication" within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an "issuer free writing prospectus," as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.5. <u>Testing-the-Waters Communications</u>. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify the Representative and shall promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Delivery to the Underwriters of Registration Statements</u>. The Company has delivered or made available or shall deliver or make available to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Delivery to the Underwriters of Prospectuses</u>. The Company has delivered or made available or will deliver or make available to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Effectiveness and Events Requiring Notice to the Representative</u>. The Company shall use its best efforts to cause the Registration Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Review of Financial Statements.</u> For a period of three (3) years after the date of this Agreement, the Company, at its expense, shall use cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company's financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Listing</u>. The Company shall use its reasonable best efforts to maintain the listing of the Common Shares (including the Public Securities) on the Exchange for at least four (4) years from the date of this Agreement, provided that such provision shall not prevent a sale, merger or similar transaction involving the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Financial Public Relations Firm</u>. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably acceptable to the Representative, which firm shall be experienced in assisting issuers in initial public offerings of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable to the Representative, which shall not be unreasonably withheld, for a period of not less than two (2) years after the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Reports to the Representative</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9.1. <u>Periodic Reports, etc</u>. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement filed by the Company under the Securities Act; (v) a copy of each report or other communication furnished to shareholders; and (vi) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request; provided the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative Counsel in connection with the Representative's receipt of such information. Documents filed with the Commission pursuant to its EDGAR system or posted on the Company's investor relations website and press releases through customary channels shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9.2. <u>Transfer Agent; Transfer Sheets</u>. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent and registrar acceptable to the Representative (the "Transfer Agent") and shall furnish to the Representative at the Company's sole cost and expense such transfer sheets of the Company's securities as the Representative may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Broadridge Corporate Issuer Solutions, Inc. is acceptable to the Representative to act as Transfer Agent for the Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9.3. <u>Trading Reports</u>. For a period of six months after the date of this Agreement, the Company shall provide to the Representative, at the Company's expense, such reports published by Exchange relating to price trading of the Public Securities, as the Representative shall reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10 <u>Payment of Expenses</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10.1. <u>General Expenses Related to the Offering</u>. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Common Shares to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Filing System filing fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Public Securities on the Exchange and such other stock exchanges as the Company and the Representative together determine, including any fees charged by the DTC for new securities; (d) all reasonable documented fees, expenses and disbursements relating to background checks of the Company's officers and directors in an amount not to exceed $7,000 in the aggregate; (e) all fees, expenses and disbursements relating to the registration or qualification of the Public Securities under the "blue sky" securities laws of such states, if applicable, and other jurisdictions as the Representative may reasonably designate; (f) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Public Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting documents (including, without limitation, this Agreement, any blue sky surveys and, if appropriate, any Agreement among Underwriters, Selected Dealers' Agreement, Underwriters' Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and delivering certificates representing the Public Securities; (j) fees and expenses of the Transfer Agent for the Common Shares; (k) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (l) to the extent approved by the Company in writing, the costs associated with post-Closing advertising the Offering in the national editions of the Wall Street Journal and New York Times; (m) the costs associated with one set of bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee shall provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably request, in an amount not to exceed $3,000 in aggregate; (n) the fees and expenses of the Company's accountants; (o) the fees and expenses of the Company's legal counsel and other agents and representatives; (p) fees and expenses of the Representative's legal counsel not to exceed $125,000; (q) the $29,500 cost associated with the Representative's use of Ipreo's book-building, prospectus tracking and compliance software for the Offering; (r) up to $10,000 for data services and communications expenses; (s) up to $10,000 of the Representative's actual accountable "road show"; and (t) up to $30,000 of the Representative's market making and trading, and clearing firm settlement expenses for the Offering. For the sake of clarity, the aggregate reimbursement for the foregoing expenses shall not exceed $214,500. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein (less any amounts previously advanced against such actual reimbursable expense) to be paid by the Company to the Underwriters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10.2. <u>Non-accountable Expenses</u>. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares (excluding the Option Shares), less the Advance (as such term is defined in Section 8.3 hereof), provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11 <u>Application of Net Proceeds</u>. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the application thereof described under the caption "Use of Proceeds" in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12 <u>Delivery of Earnings Statements to Security Holders</u>. The Company shall make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth (15<sup>th</sup>) full calendar month following the date of this Agreement, an earnings statement (which need not be certified by independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.13 <u>Stabilization</u>. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Public Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.14 <u>Internal Controls</u>. The Company shall use its commercially reasonable efforts to maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.15 <u>Accountants</u>. As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period ending on the earlier of (i) three (3) years after the date of this Agreement and (ii) the effective date of the Company's deregistration of the Common Shares under the Exchange Act and the suspension of the Company's reporting obligations under Section 15(d) thereunder. The Representative acknowledges that the Auditor is acceptable to the Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.16 <u>FINRA</u>. The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if prior to the Closing Date it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of five percent (5%) or more of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered equity securities which were acquired during the one hundred eighty (180) days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.17 <u>No Fiduciary Duties</u>. The Company acknowledges and agrees that the Underwriters' responsibility to the Company is solely contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.18 <u>Company Lock-Up Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.18.1. <u>Restriction on Sales of Capital Stock</u>. The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of twelve (12) months from the date of this Agreement (the "Lock-Up Period"), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares of the Company or any securities convertible into or exercisable or exchangeable for Common Shares of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any Common Shares of the Company or any securities convertible into or exercisable or exchangeable for Common Shares of the Company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.

The restrictions contained in this Section 3.18.1 shall not apply to (i) the Common Shares to be sold hereunder, (ii) the issuance by the Company of Common Shares upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date hereof, which is disclosed in the Registration Statement, Disclosure Package and Prospectus, provided that such options, warrants, and securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, (iii) the issuance by the Company of stock options or Common Shares of the Company or other awards under any equity compensation plan of the Company, or (iv) the issuance of securities pursuant to a bona fide merger, consolidation, acquisition of securities, businesses, property or other assets, joint venture, collaboration, licensing or strategic alliances or other similar transactions, not primarily for the purposes of raising capital, providing that the aggregate number of shares of securities shall not exceed 5% of the total number of Public Securities issued and outstanding immediately following the completion of the transactions contemplated by this Agreement, provided that in each of (ii) and (iii) above, the underlying shares shall be restricted from sale during the entire Lock-Up Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.18.2. <u>Restriction on Continuous Offerings</u>. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of twenty-four (24) months from the date of the Offering, directly or indirectly in any "at-the-market" or continuous equity transaction, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of Common Shares of the Company or any securities convertible into or exercisable or exchangeable for Common Shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.19 <u>Release of D&O Lock-up Period</u>. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreements described in Section 2.24 hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of <u>Exhibit C</u> hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.20 <u>Blue Sky Qualifications</u>. The Company shall use its reasonable best efforts, in cooperation with the Underwriters, if necessary, to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.21 <u>Reporting Requirements</u>. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under Rule 463 under the Securities Act Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.22 <u>Emerging Growth Company Status</u>. The Company shall promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the Securities Act and (ii) fifteen (15) days following the completion of the Lock-Up Period.

4. <u>Conditions of Underwriters' Obligations</u>. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Regulatory Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1. <u>Effectiveness of Registration Statement; Rule 430A Information</u>. The Registration Statement has become effective not later than 5:00 p.m., Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company's knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2. <u>FINRA Clearance</u>. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.3. <u>Exchange Stock Market Clearance</u>. On the Closing Date, the Company's Common Shares, including the Firm Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date (if any), the Company's Common Shares, including the Option Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.4. <u>Transaction Documents</u>. All of the Transaction Documents shall have been executed and delivered contemporaneously with or prior to the sale of the Firm Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Company Counsel Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1. <u>Closing Date Opinion of Corporate Counsel</u>. On the Closing Date, the Representative shall have received the favorable opinion of Loeb & Loeb LLP, U.S. counsel to the Company, dated the Closing Date and addressed to the Representative, substantially in form and substance reasonably acceptable to the Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.2. <u>Opinion of Counsel for the Manager</u>. On the Closing Date, the Representative shall have received the favorable opinion of Kirton McConkie PC, counsel to the Manager, dated the Closing Date, addressed to the Representative substantially in form and substance reasonably acceptable to the Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.3. <u>Opinion of Canadian Counsel for the Company and the Parent</u>. On the Closing Date, the Representative shall have received the favorable opinion of Gowling WLG (Canada) LLP, Canadian counsel to the Company and the Parent, dated the Closing Date, addressed to the Representative substantially in form and substance reasonably acceptable to the Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.4. <u>Option Closing Date Opinions of Counsel</u>. On the Option Closing Date, if any, the Representative shall have received the favorable opinions of each counsel listed in Sections 4.2.1, 4.2.2, and 4.2.3 dated the Option Closing Date, addressed to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsels in their respective opinions delivered on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.5. <u>Reliance</u>. In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the United States and/or Canada and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinions of Loeb & Loeb LLP, Kirton McConkie PC and Gowling WLG (Canada) LLP and any opinion relied upon by Loeb & Loeb LLP, Kirton McConkie PC and Gowling WLG (Canada) LLP shall include a statement to the effect that it may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Comfort Letters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.1. <u>Cold Comfort Letter</u>. At the time this Agreement is executed the Representative shall have received a cold comfort letter containing statements and information of the type customarily included in accountants' comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative and to the Auditor, dated as of the date of this Agreement and not have the Auditor cutoff date more than three (3) business days prior to the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.2. <u>Bring-down Comfort Letter</u>. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Officers' Certificates</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.1. <u>Officers' Certificate</u>. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer, its President and its Chief Financial Officer (on behalf of the Company and not in an individual capacity) stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct in all material respects (except for those representations and warranties qualified as to materiality, which shall be true and correct in all respects and except for those representations and warranties which refer to facts existing at a specific date, which shall be true and correct as to such date) and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, any Material Adverse Change in the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate, would result in a Material Adverse Change, in or affecting the condition (financial or otherwise), results of operations, business, business plan or assets of the Company, except as set forth in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.2. <u>Secretary's Certificate</u>. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying: (i) that each of the Company's Articles and Notice of Articles is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company's Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.3. <u>Manager Certificate</u>. Manager shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer and its Chief Financial Officer (on behalf of the Manager and not in an individual capacity) stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Manager in this Agreement are true and correct in all material respects (except for those representations and warranties qualified as to materiality, which shall be true and correct in all respects and except for those representations and warranties which refer to facts existing at a specific date, which shall be true and correct as to such date) and the Manager has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date) and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, any Material Adverse Change in the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate, would result in a Material Adverse Change, in or affecting the condition (financial or otherwise), results of operations, business, business plan or assets of Parent or Company, except as set forth in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.4. <u>Parent Certificate</u>. Parent shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its President and its Chief Financial Officer (on behalf of the Parent and not in an individual capacity) stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct in all material respects (except for those representations and warranties qualified as to materiality, which shall be true and correct in all respects and except for those representations and warranties which refer to facts existing at a specific date, which shall be true and correct as to such date) and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and. (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, any Material Adverse Change in the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate, would result in a Material Adverse Change, in or affecting the condition (financial or otherwise), results of operations, business, business plan or assets of any member of the Company Group, except as set forth in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>No Material Changes</u>. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no Material Adverse Change or development in the condition or the business activities, financial or otherwise, of any member of the Company Group from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or, to the Company's knowledge, threatened against the Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding would reasonably be expected to materially adversely affect the business, operations, prospects or financial condition or income of any member of the Company Group, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or, to the Company's knowledge, threatened by the Commission; (iv) no action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any Governmental Entity which would prevent the issuance or sale of the Public Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of any member of the Company Group; (v) no injunction, restraining order or order of any other nature by any federal, state or foreign court of competent jurisdiction shall have been issued which would prevent the issuance or sale of the Public Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of any member of the Company Group; and (vi) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Corporate Proceedings</u>. All corporate proceedings and other legal matters incident to the authorization, form and validity of each of this Agreement, the Public Securities, the Registration Statement, the Pricing Disclosure Package and the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>Delivery of Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.1. <u>Lock-Up Agreements</u>. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up Agreements from each of the persons listed in <u>Schedule 3</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.2. <u>Representative's Warrant</u>. On the Closing Date, the Company shall have delivered to the Representative executed copy of the Representative's Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u>Additional Documents</u>. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling Representative Counsel to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities and the Representative's Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representative and Representative Counsel.

5. <u>Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Indemnification of the Underwriters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1. <u>General</u>. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel, and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the "Underwriter Indemnified Parties," and each an "Underwriter Indemnified Party"), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries (a "Claim"), (i) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, the Pricing Disclosure Package, any Preliminary Prospectus, the Prospectus, or in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication (as from time to time each may be amended and supplemented); (B) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any "road show" or investor presentations made to investors by the Company (whether in person or electronically); or (C) any application or other document or written communication (in this Section 5, collectively called "application") executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Public Securities and Representative's Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters' Information or (ii) otherwise arising in connection with or allegedly in connection with the Offering. The Company also agrees that it will reimburse each Underwriter Indemnified Party for all reasonable and documented fees and expenses (including but not limited to any and all reasonable legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) (collectively, the "Expenses"), and further agrees wherever and whenever possible to advance payment of Expenses as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending any Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2. <u>Procedure</u>. If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses if an Underwriter Indemnified Party requests that the Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company, and shall be advanced by the Company. The Company shall not be liable for any settlement of any action effected without its consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the Underwriters, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Underwriter Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified Party, from all liabilities, expenses and claims arising out of such action for which indemnification or contribution may be sought and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Indemnification of the Company</u>. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters' Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public Securities or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Contribution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.1. <u>Contribution Rights</u>. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering of the Public Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the Common Shares purchased under this Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering of the Public Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.2. <u>Contribution Procedure</u>. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party ("contributing party"), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid fifteen (15) days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution on account of any settlement of any claim, action or proceeding without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available. Each Underwriter's obligations to contribute pursuant to this Section 5.3 are several and not joint.

6. <u>Default by an Underwriter</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Default Not Exceeding 10% of Firm Shares or Option Shares</u>. If any Underwriter or Underwriters shall default in its or their obligations to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate ten percent (10%) of the number of Firm Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Default Exceeding 10% of Firm Shares or Option Shares</u>. In the event that the default addressed in Section 6.1 relates to more than ten percent (10%) of the Firm Shares or Option Shares, you may in your discretion arrange for yourself or for another party or parties to purchase such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day after such default relating to more than ten percent (10%) of the Firm Shares or Option Shares, you do not arrange for the purchase of such Firm Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Shares or Option Shares on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default relates as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except as provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Firm Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Postponement of Closing Date</u>. In the event that the Firm Shares or Option Shares to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Common Shares.

7. <u>Additional Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Board Composition and Board Designations</u>. The Company shall ensure that: (i) the qualifications of the persons serving as members of the Board of Directors and the overall composition of the Board comply with the Sarbanes-Oxley Act, with the Exchange Act and with the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company seeks to have its Public Securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable, at least one (1) member of the Audit Committee of the Board of Directors qualifies as an "audit committee financial expert," or , absent meeting such qualification, has "accounting or related financial management expertise" or "financial sophistication" or such term, as applicable, is defined under Regulation S-K or the listing rules of the Exchange, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Prohibition on Press Releases and Public Announcements</u>. The Company shall not issue press releases or engage in any other publicity, without the Representative's prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1<sup>st</sup>) Business Day following the fortieth (40<sup>th</sup>) day after the Closing Date, other than normal and customary releases issued in the ordinary course of the Company's business and any other press release that may be necessary to comply with the Securities Act or the rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Right of First Refusal</u>. Provided that the Firm Shares are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable right of first refusal (the "Right of First Refusal"), for a period of twelve (12) months after the date the Offering is completed, to act as sole investment banker, sole book-runner, and/or sole placement agent, at the Representative's sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings (each, a "Subject Transaction"), during such twelve (12) month period, of the Company, or any successor to or subsidiary of the Company, on terms customary to the Representative for such Subject Transactions. The Representative shall have the sole right to determine whether or not any other broker dealer shall have the right to participate in any such Subject Transaction and the economic terms of any such participation.

The Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing or other permitted delivery of such notice, then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative shall not adversely affect the Representative's Right of First Refusal with respect to any other Subject Transaction during the twelve (12) month period agreed to above.

8. <u>Effective Date of this Agreement and Termination Thereof</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Effective Date</u>. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts of such signatures to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Termination</u>. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the Exchange, the New York Stock Exchange or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Shares or Option Shares; or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date hereof of such a Material Adverse Change in the conditions of the Company Group, or such Material Adverse Change in general market conditions as in the Representative's judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Expenses</u>. Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements of Representative Counsel) up to $200,000, inclusive of the $50,000 advance for accountable expenses previously paid by the Company to the Representative (the "Advance") and upon demand the Company shall pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Survival of Indemnification</u>. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <u>Representations, Warranties, Agreements to Survive</u>. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.

9. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Notices</u>. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.

If to the Representative:

ThinkEquity LLC

17 State Street, 22<sup>nd</sup> Floor

New York, New York 10004

Attention: Mr. Eric Lord, Head of Investment Banking

Fax No.: (212) 349-2550

E-mail: notices@think-equity.com

with copies (which shall not constitute notice) to:

Sullivan & Worcester LLP

1633 Broadway

New York, New York 10019

Attention: Oded Har-Even, Esq.

Fax No.: (212) 660-3001

Email: ohareven@sullivanlaw.com

and

Tingle Merrett LLP (Canadian Counsel to Underwriters)

1250, 639 – 5 Avenue SW

Calgary, AB T2P 0M9

Attn: Scott Reeves

Fax No.: 403-571-8008

If to the Company or Strong/MDI:

Strong Global Entertainment, Inc.

5960 Fairview Road, Suite 275

Charlotte, North Carolina, 28210

Attention: Mark D. Roberson

Fax No: (402) 453-7238

with a copy (which shall not constitute notice) to:

Loeb & Loeb LLP

345 Park Ave

New York, NY 10154

Attention: Mitchell Nussbaum, Esq. or Janeane Ferrari, Esq.

Fax No: 212-407-4990

If to FG Group Holdings:

FG Group Holdings, Inc.

5960 Fairview Road, Suite 275

Charlotte, North Carolina, 28210

Attention: Mark D. Roberson

Fax No: (402) 453-7238

with a copy (which shall not constitute notice) to:

Kirton McConkie PC (Counsel to FG Group Holdings)

50 E. South Temple

Salt Lake City, UT 84111

Attn: C. Parkinson Lloyd

Fax No: 801-321-4893

and

Holland & Hart LLP

222 South Main Street, Suite 2200

Salt Lake City, UT 84101

Attn: S. Chase Dowden

Email: SCDowden@hollandhart.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Research Analyst Independence</u>. The Company acknowledges that each Underwriter's research analysts and research departments are required to be independent from its investment banking division and are subject to certain regulations and internal policies, and that such Underwriter's research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the Offering that differ from the views of their investment banking division. The Company acknowledges that each Underwriter is a full service securities firm and as such from time to time, subject to applicable securities laws, rules and regulations, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the Company; provided, however, that nothing in this Section 9.2 shall relieve the Underwriter of any responsibility or liability it may otherwise bear in connection with activities in violation of applicable securities laws, rules or regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Headings</u>. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Amendment</u>. This Agreement may only be amended by a written instrument executed by each of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Entire Agreement</u>. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter between the Company and ThinkEquity LLC dated October 12, 2021, shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Binding Effect</u>. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term "successors and assigns" shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Governing Law; Consent to Jurisdiction; Trial by Jury</u>. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. Each of the Company and the Underwriters agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys' fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Execution in Counterparts</u>. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>Waiver, etc</u>. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

[Signature Page Follows]

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.

---

| | |
|:---|:---|
|  | Very truly yours, |
|  | STRONG GLOBAL ENTERTAINMENT, INC. |
|  | By: |
|  | Name: |
|  | Title: |
|  | FG GROUP HOLDINGS, INC. |
|  | By: |
|  | Name: |
|  | Title: |
|  | Strong/MDI Screen Systems, Inc. |
|  | By: |
|  | Name: |
|  | Title: |
| Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on <u>Schedule 1</u> hereto: |  |
| THINKEQUITY LLC |  |
| By: |  |
| Name: |  |
| Title: |  |

---

[SIGNATURE PAGE]

[ISSUER] – UNDERWRITING AGREEMENT

**<u>SCHEDULE 1</u>**

 

<br> ---

| | | |
|:---|:---|:---|
| **Underwriter** | **Total Number of**<br> **Firm Shares to be Purchased** | **Number of Additional Shares to be Purchased if the Over-Allotment Option is Fully Exercised** |
| ThinkEquity LLC . |  |  |
| **TOTAL** |  |  |

---

Sch. 1-1

**<u>SCHEDULE 2-A</u>**

 

<br> **Pricing Information**

Number of Firm Shares: [●]

Number of Option Shares: [●]

Number of Representative's Warrants: [●]

Firm Share Offering Price per Share: $[●]

Underwriting Discount per Share: $[●]

Underwriting Non-accountable expense allowance per Share: $[●]

Proceeds to Company per Share (before expenses): $[●]

**<u>SCHEDULE 2-B</u>**

**Issuer General Use Free Writing Prospectuses**

[None.]

**<u>SCHEDULE 2-C</u>**

**Written Testing-the-Waters Communications**

[None.]

Sch. 2-1

**<u>SCHEDULE 3</u>**

**List of Lock-Up Parties**

FG Group Holdings, Inc.

Strong/MDI Screen Systems, Inc.

Mark D. Roberson

Todd R. Major

Ray F. Boegner

D. Kyle Cerminara

Richard E. Govignon Jr.

John W. Struble

Marsha G. King

Sch. 3-1

**<u>EXHIBIT A</u>**

**Form of Representative's Warrant** 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) THINKEQUITY LLC, OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF THINKEQUITY LLC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [________________] [**DATE THAT IS 180 DAYS FROM THE EFFECTIVE DATE OF THE OFFERING**]. VOID AFTER 5:00 P.M., EASTERN TIME, [___________________] [**DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING**].

**WARRANT TO PURCHASE CLASS A COMMON VOTING SHARES** 

**STRONG GLOBAL ENTERTAINMENT, INC.**

Warrant Shares: _______ <br> Initial Exercise Date: ______, 2023

THIS WARRANT TO PURCHASE COMMON SHARES (the "<u>Warrant</u>") certifies that, for value received, ThinkEquity LLC or its assigns (the "<u>Holder</u>") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after ____, 2023 (the "<u>Initial Exercise Date</u>") and, in accordance with FINRA Rule 5110(g)(8)(A), prior to at 5:00 p.m. (New York time) on the date that is five (5) years following the Effective Date (the "<u>Termination Date</u>") but not thereafter, to subscribe for and purchase from Strong Global Entertainment, Inc., a company incorporated under the Business Corporations Act (British Columbia) (the "<u>Company</u>"), up to ______ Class A Common Voting Shares, no par value, of the Company (the "<u>Common Shares</u>"), as subject to adjustment hereunder (the "<u>Warrant Shares</u>"). The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant is being issued in connection with that certain Underwriting Agreement, dated as of [●], 2023 between the Company and ThinkEquity LLC, as representative of the underwriter(s) named therein.

<u>Section 1</u>. <u>Definitions</u>. In addition to the terms defined elsewhere in the Warrant, the following terms have the meanings indicated in this Section 1:

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

Ex. A- 1

"<u>Business Day</u>" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Effective Date</u>" means the effective date of the registration statement on Form S-1 (File No. [333-]), including any related prospectus or prospectuses, for the registration of the Common Shares and the Warrant Shares under the Securities Act, that the Company has filed with the Commission.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Rule 144</u>" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Trading Day</u>" means a day on which the New York Stock Exchange is open for trading.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE American LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

"<u>VWAP</u>" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of a Common Share for such date (or the nearest preceding date) on the OTCQB or OTCQX as applicable, (c) if Common Shares are not then listed or quoted for trading on the OTCQB or OTCQX and if prices for Common Shares are then reported in the "Pink Sheets" published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of the Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

Ex. A- 2

<u>Section 2</u>. <u>Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. **The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Exercise Price</u>. The exercise price per Common Share under this Warrant shall be **$[**●**]**<sup>1</sup>, subject to adjustment hereunder (the "<u>Exercise Price</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Cashless Exercise</u>. In lieu of exercising this Warrant by delivering the aggregate Exercise Price by wire transfer or cashier's check, at the election of the Holder this Warrant may also be exercised, in whole or in part, at such time by means of a "cashless exercise" in which the Holder shall be entitled to receive the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) = as
 applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
 Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
 and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined
 in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading
 Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is executed during "regular
 trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close
 of "regular trading hours" on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
 Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
 pursuant to Section 2(a) hereof after the close of "regular trading hours" on such Trading Day;

(B) = the
 Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the
 number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
 exercise were by means of a cash exercise rather than a cashless exercise.

<sup>1</sup> 125% of the public offering price per Common Share.

Ex. A- 3

If Warrant Shares are issued in such a "cashless exercise," the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 2(c).

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Delivery of Warrant Shares Upon Exercise</u>. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by its transfer agent to the Holder by crediting the account of the Holder's or its designee's balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system ("<u>DWAC</u>") if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as defined below), and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise (such date, the "<u>Warrant Share Delivery Date</u>"). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of unlegended Warrant Shares upon a cashless exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the second (2<sup>nd</sup>) Trading Day following the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5<sup>th</sup>) Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.

Ex. A- 4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Delivery of New Warrants Upon Exercise</u>. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Rescission Rights</u>. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; <u>provided</u>, <u>however</u>, that the Holder shall be required to return any Warrant Shares or Common Shares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder's right to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise</u>. In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "<u>Buy-In</u>"), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver Common Shares upon exercise of the Warrant as required pursuant to the terms hereof.

Ex. A- 5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. <u>No Fractional Shares or Scrip</u>. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. <u>Charges, Taxes and Expenses</u>. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; <u>provided</u>, <u>however</u>, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. <u>Closing of Books</u>. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii. <u>Signature</u>. This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order to exercise this Purchase Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Purchase Warrant. No additional legal opinion, other information or instructions shall be required of the Holder to exercise this Purchase Warrant. The Company shall honor exercises of this Purchase Warrant and shall deliver Shares underlying this Purchase Warrant in accordance with the terms, conditions and time periods set forth herein.

Ex. A- 6

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Holder's Exercise Limitations</u>. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder's Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder's Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Shares Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercise of the Warrant that are not in compliance with the Beneficial Ownership Limitation, except to the extent that the Holder relies on the number of outstanding Common Shares that was provided by the Company. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding Common Shares that was provided by the Company. For purposes of this Section 2(e), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company's transfer agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding Common Shares was reported. The "<u>Beneficial Ownership Limitation</u>" shall be 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61<sup>st</sup> day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Ex. A- 7

<u>Section 3</u>. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Splits</u>. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event that the Company or any Subsidiary thereof, as applicable, sells or grants any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Shares or Common Share Equivalents, at an effective price per share less than the Exercise Price then in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) [RESERVED]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Shares (the "<u>Purchase Rights</u>"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

Ex. A- 8

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Pro Rata Distributions</u>. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash dividends) or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "<u>Distribution</u>"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (<u>provided</u>, <u>however</u>, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Fundamental Transaction</u>. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "<u>Fundamental Transaction</u>"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "<u>Alternate Consideration</u>") receivable by holders of Common Shares as a result of such Fundamental Transaction for each Common Share for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "<u>Successor Entity</u>") to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of Common Shares of such Successor Entity (or its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such Common Shares (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of Common Shares and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

Ex. A- 9

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Calculations</u>. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Notice to Holder</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Adjustment to Exercise Price</u>. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver by facsimile or mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Notice to Allow Exercise by Holder</u>. If while the Warrant is outstanding, (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or mailed a notice to the Holder at its facsimile number, or last address as it shall appear upon the Warrant Register of the Company, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to provide such notice or any defect therein shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Ex. A- 10

<u>Section 4</u>. <u>Transfer of Warrant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Transferability</u>. Pursuant to FINRA Rule 5110(e)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of one hundred eighty (180) days immediately following the Effective Date pursuant to which this Warrant is being issued, except the transfer of any security:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. by operation of law or by reason of reorganization of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. if the aggregate amount of securities of the Company held by the Holder or related person do not exceed 1% of the securities being offered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.

Subject to the foregoing restriction, any applicable securities laws and the conditions set forth in Section 4(d), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>New Warrants</u>. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

Ex. A- 11

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Warrant Register</u>. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the "<u>Warrant Register</u>"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Representation by the Holder</u>. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

<u>Section 5. Registration Rights.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>5.1. Demand Registration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 Grant of Right. The Company, upon written demand (a "<u>Demand Notice</u>") of the Holder(s) of at least 51% of the Warrants and/or the underlying Warrant Shares ("Majority Holders"), agrees to register, on one occasion, all or any portion of the Warrant Shares underlying the Warrants (collectively, the "<u>Registrable Securities</u>"). On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 5.2 hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The demand for registration may be made at any time beginning on the Initial Exercise Date and expiring on the fifth anniversary of the Effective Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2 Terms. The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 5.1.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right granted under Section 5.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the Warrant Shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding the provisions of this Section 5.1.2, the Holder shall be entitled to a demand registration under this Section 5.1.2 on only one (1) occasion and such demand registration right shall terminate on the fifth anniversary of the date of the Underwriting Agreement (as defined below) in accordance with FINRA Rules 5110(g)(8)(B) and 5110(g)(8)(C).

Ex. A- 12

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>5.2 "Piggy-Back" Registration.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.1 Grant of Right. In addition to the demand right of registration described in Section 5.1 hereof, the Holder shall have the right, for a period of no more than two (2) years from the Initial Exercise Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Common Shares which may be included in the Registration Statement because, in such underwriter(s)' judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company during the two (2) year period following the Initial Exercise Date until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the "piggy-back" rights provided for herein by giving written notice within ten (10) days of the receipt of the Company's notice of its intention to file a registration statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 5.2.2; provided, however, that such registration rights shall terminate on the second anniversary of the Initial Exercise Date.

Ex. A- 13

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>5.3 General Terms</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.1 Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys' fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys' fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.2 Exercise of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.3 Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a "cold comfort" letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company's financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

Ex. A- 14

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.4 Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Warrant Shares and their intended methods of distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.5 Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.6 Damages. Should the registration or the effectiveness thereof required by Sections 5.1 and 5.2 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

<u>Section 6</u>. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>No Rights as Shareholder Until Exercise</u>. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Loss, Theft, Destruction or Mutilation of Warrant</u>. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.

Ex. A- 15

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Authorized Shares</u>.

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Underwriting Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Restrictions</u>. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

Ex. A- 16

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Nonwaiver and Expenses</u>. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notices</u>. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Underwriting Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Limitation of Liability</u>. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Share or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Remedies</u>. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Successors and Assigns</u>. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Amendment</u>. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Severability</u>. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) <u>Headings</u>. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

*(Signature Page Follows)* 

Ex. A- 17

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

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| |
|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** |
| By: |
| Name: |
| Title: |

---

Ex. A- 18

**NOTICE OF EXERCISE**

TO: STRONG GLOBAL ENTERTAINMENT, INC.

_________________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Payment shall take the form of (check applicable box):

[ ] in lawful money of the United States; or

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Please register and issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Accredited Investor</u>. If the Warrant is being exercised via cash exercise, the undersigned is an "accredited investor" as defined in Regulation D promulgated under the Securities Act of 1933, as amended

[SIGNATURE OF HOLDER]

Name of Investing Entity: _______________________________________________________________

*Signature of Authorized Signatory of Investing Entity*: _________________________________________

Name of Authorized Signatory: ___________________________________________________________

Title of Authorized Signatory: ____________________________________________________________

Date: _______________________________________________________________________________

Ex. A- 19

**ASSIGNMENT FORM**

(To assign the foregoing warrant, execute<br> this form and supply required information.<br> Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated: ______________, _______

Holder's Signature: _____________________________

Holder's Address: _____________________________

_____________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

Ex. A- 20

**<u>EXHIBIT B</u>**

**Lock-Up Agreement**

**[●], 2023** 

ThinkEquity LLC

17 State Street, 22<sup>nd</sup> Floor

New York, NY 10004

As Representative of the several Underwriters named on Schedule 1 to the Underwriting Agreement referenced below<br>

Ladies and Gentlemen:

The undersigned understands that ThinkEquity LLC (the "**Representative**"), proposes to enter into an Underwriting Agreement (the "**Underwriting Agreement**") with Strong Global Entertainment, Inc., a company incorporated under the Business Corporations Act (British Columbia) (the "**Company**"), Strong/MDI Screen Systems, Inc. ("**Strong/MDI**" or "**Parent**"), a company incorporated under the laws of Québec, Canada, and FG Group Holdings, Inc., a Delaware corporation ("**FG Group Holdings**" or "**Manager**"), providing for the initial public offering (the "**Public Offering**") of Class A Common Voting Shares, no par value in the authorized share structure of the Company (the "**Common Shares**").

To induce the Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 12 months for officers and directors and all other shareholders after the date of the Underwriting Agreement relating to the Public Offering (the "**Lock-Up Period**"), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the "**Lock-Up Securities**"); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Public Offering; <u>provided</u> that no filing under Section 13 or Section 16(a) of the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), or other public announcement shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a *bona fide* gift, by will or intestacy or to a family member or trust for the benefit of the undersigned or a family member (for purposes of this lock-up agreement, "family member" means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; (d) if the undersigned is a corporation, partnership, limited liability company or other business entity, (i) any transfers of Lock-Up Securities to another corporation, partnership or other business entity that controls, is controlled by or is under common control with the undersigned or (ii) distributions of Lock-Up Securities to members, partners, shareholders, other equity holders, subsidiaries or affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned; (e) if the undersigned is a trust, to a trustee or beneficiary of the trust; (f) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (b), (c), (d) or (e), <u>provided</u> that in the case of any transfer pursuant to the foregoing clauses (b), (c), (d), (e) or (f), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made; (g) the receipt by the undersigned from the Company of Common Shares upon the vesting of restricted stock awards or stock units or upon the exercise of options to purchase the Company's Common Shares issued under an equity incentive plan of the Company or an employment arrangement described in the Pricing Prospectus (as defined in the Underwriting Agreement) (the "**Plan Shares**") or the transfer of Common Shares or any securities convertible into Common Shares to the Company upon a vesting event of the Company's securities or upon the exercise of options to purchase the Company's securities, in each case on a "cashless" or "net exercise" basis or to cover tax obligations of the undersigned in connection with such vesting or exercise, but only to the extent such right expires during the Lock-up Period, <u>provided</u> that no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made within [ninety] [90] days after the date of the Underwriting Agreement, and after such [ninetieth] [90]<sup>th</sup> day, if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of Common Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report to the effect that the purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting or exercise and, <u>provided further</u>, that the Plan Shares shall be subject to the terms of this lock-up agreement; (h) the transfer of Lock-Up Securities pursuant to agreements described in the Pricing Prospectus under which the Company has the option to repurchase such securities or a right of first refusal with respect to the transfer of such securities, <u>provided</u> that if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of Common Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report describing the purpose of the transaction; (i) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Lock-Up Securities, <u>provided</u> that (i) such plan does not provide for the transfer of Lock-Up Securities during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan, such public announcement or filing shall include a statement to the effect that no transfer of Lock-Up Securities may be made under such plan during the Lock-Up Period; (i) the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, <u>provided</u> that the transferee agrees to sign and deliver a lock-up agreement substantially in the form of this lock-up agreement for the balance of the Lock-Up Period, and <u>provided further</u>, that any filing under Section 13 or Section 16(a) of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall include a statement that such transfer has occurred by operation of law; and (j) the transfer of Lock-Up Securities pursuant to a bona fide third party tender offer, merger, (k) the transfer of Lock-Up Securities to the Company from an employee or director of the Company upon death, disability or termination of employment, in each case, of such employee or director, consolidation or other similar transaction made to all holders of the Common Shares involving a change of control (as defined below) of the Company after the closing of the Public Offering and approved by the Company's board of directors; <u>provided</u> that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Lock-Up Securities owned by the undersigned shall remain subject to the restrictions contained in this lock-up agreement. For purposes of clause (j) above, "change of control" shall mean the consummation of any bona fide third party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any "person" (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a majority of total voting power of the voting stock of the Company. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the undersigned's Lock-Up Securities except in compliance with this lock-up agreement.

Ex. B- 1

The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date hereof to and including the thirty-fourth (34<sup>th</sup>) day following the expiration of the Lock-Up Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period has expired.

If the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to any issuer-directed or "friends and family" Securities that the undersigned may purchase in the Public Offering; (ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.

No provision of this lock up agreement shall be deemed to restrict or prohibit the exercise, exchange, or conversion by the undersigned of any securities exercisable or exchangeable for or convertible into Common Shares, as applicable, provided, that, the undersigned does not transfer Common Shares acquired on such exercise, exchange, or conversion during the Lock Up Period, unless otherwise permitted pursuant to the terms of this lock up agreement.

The undersigned understands that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors and assigns.

The undersigned understands that, if the Underwriting Agreement is not executed by [DATE], or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Shares to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.

Ex. B- 2

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.

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| |
|:---|
| Very truly yours, |
| (Name - Please Print) |
| (Signature) |
| (Name of Signatory, in the case of entities - Please Print) |
| (Title of Signatory, in the case of entities - Please Print) |
| Address: |

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Ex. B- 3

**<u>EXHIBIT C</u>**

**Form of Press Release**

**STRONG GLOBAL ENTERTAINMENT, INC.**

**[Date]**

Strong Global Entertainment, Inc. (the "Company") announced today that ThinkEquity LLC, acting as representative for the underwriters in the Company's recent public offering of _______ the Company's Class A Common Voting Shares, is [waiving] [releasing] a lock-up restriction with respect to _________ of the Company's Class A Common Voting Shares held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _________, 20___, and the shares may be sold on or after such date.

**This press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended.**

Ex. C- 1

## Exhibit 10.2

**Exhibit 10.2**

**[Pursuant to Item 601(a)(5) of Regulation S-K, schedules and attachments to this exhibit have been omitted. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.]**

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| | |
|:---|:---|
| ![](ex10-2_001.jpg) | **Canadian Imperial Bank of Commerce**<br> 300-1155 René-Levesque O.<br> Montréal, Quebec, Canada<br> H3B 4P9 |

---

January 13<sup>th</sup>, 2023

**Strong/MDI Screen Systems, Inc.**

1440 Raoul-Charette

Joliette, Quebec, J6E 8S7

Attention: Mr. Mark Roberson

Dear Sirs:

**<u>Re: Amendment and restatement to the Credit Agreement dated May 31, 2021, as amended (the "Existing Credit Agreement").</u>**

Canadian Imperial Bank of Commerce ("CIBC") is pleased to amend and restate the Existing Credit Agreement, without novation, and to establish the following credit facilities (the "Credits") in favour of Strong/MDI Screen Systems, Inc. (the "Borrower").

**Demand Operating Credit**

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| | | |
|:---|:---|:---|
| Credit Limit: | $5000000. | $5000000. |
|  | The aggregate outstanding amount of Canadian dollar loans, US dollar loans, standby L/Cs and B/As under this Credit may not at any time exceed the limit of this Credit set out above. | The aggregate outstanding amount of Canadian dollar loans, US dollar loans, standby L/Cs and B/As under this Credit may not at any time exceed the limit of this Credit set out above. |
| Purpose: | All amounts obtained under this Credit are to be used for working capital. | All amounts obtained under this Credit are to be used for working capital. |
| Description and Rate: | A revolving Credit, available as follows: | A revolving Credit, available as follows: |
|  | ► | Canadian dollar loans, which will also be available by way of overdrafts. |
|  |  | Interest on Canadian dollar loans will be calculated at the Prime Rate plus 1.00% per annum. |
|  | ► | US dollar Base Rate loans, which will also be available by way of overdrafts. |
|  |  | Interest on US dollar Base Rate loans will be calculated at the US Base Rate plus 1.00% per annum. |

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| | | |
|:---|:---|:---|
|  | ► | Canadian dollar or US dollar standby L/Cs. At no time shall the total amount of outstanding standby L/Cs (which for greater certainty shall be net of the amount of any previous drawing made under any standby L/C then outstanding) under this Credit (including the equivalent amount in Canadian dollars of any standby L/C denominated in US dollars) exceed $500,000. Standby L/Cs under this Credit may not have terms to expiry of more than 12 months. Fees for standby L/Cs under this Credit will be calculated at 2.50% per annum. The minimum fee for each standby L/C under this Credit is $500 or US $500, as applicable. In each case the Borrower shall reimburse CIBC for its out of pocket expenses relative to all standby L/Cs under this Credit. CIBC's standard L/C documentation is also required. |
|  | ► | Canadian dollar B/As. CIBC's stamping fee for B/As will be calculated at 2.50% per annum. |
| Repayment: | All amounts under this Credit are repayable immediately on demand by CIBC, and this Credit may be terminated in whole or in part by CIBC at any time. | All amounts under this Credit are repayable immediately on demand by CIBC, and this Credit may be terminated in whole or in part by CIBC at any time. |
|  | The Borrower shall have the option to repay any amount under this Credit at any time; provided that B/As may be repaid only on their maturity. | The Borrower shall have the option to repay any amount under this Credit at any time; provided that B/As may be repaid only on their maturity. |
| **Demand Instalment Loan** | **Demand Instalment Loan** | **Demand Instalment Loan** |
| Credit Limit: | $3100000 | $3100000 |
| Purpose: | This loan is to be used to refinance the existing indebtedness against the property located at 1440 Raoul Charette Street in Joliette, Quebec ("Property"). | This loan is to be used to refinance the existing indebtedness against the property located at 1440 Raoul Charette Street in Joliette, Quebec ("Property"). |
| Description: | A non-revolving loan. | A non-revolving loan. |
|  | Interest on this Instalment Loan will be calculated at Prime Rate plus 0.50% per annum. | Interest on this Instalment Loan will be calculated at Prime Rate plus 0.50% per annum. |

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| | | |
|:---|:---|:---|
| Repayment: | All amounts under this loan are repayable immediately on demand by CIBC. Prior to the time that any such demand is made, and without prejudice to CIBC's right to require immediate payment, the Borrower shall repay this loan by way of regular monthly payments of principal of $12,916.66 each, together with accrued interest.<br>The Borrower shall have the option to repay any principal amount of this loan at any time, and any such optional repayment shall be applied to the instalments specified above in the inverse order of their maturity. | All amounts under this loan are repayable immediately on demand by CIBC. Prior to the time that any such demand is made, and without prejudice to CIBC's right to require immediate payment, the Borrower shall repay this loan by way of regular monthly payments of principal of $12,916.66 each, together with accrued interest.<br>The Borrower shall have the option to repay any principal amount of this loan at any time, and any such optional repayment shall be applied to the instalments specified above in the inverse order of their maturity. |
| **Business Credit Card Facility** | **Business Credit Card Facility** | **Business Credit Card Facility** |
| Credit Limit: | $75000 | $75000 |
| Purpose: | Purchase and payment of goods and services | Purchase and payment of goods and services |
| Repayment: | On demand in accordance with the CIBC Business Credit Card Agreement (Business Liability) | On demand in accordance with the CIBC Business Credit Card Agreement (Business Liability) |
| Documentation: | CIBC Business Credit Card Agreement (Business Liability) | CIBC Business Credit Card Agreement (Business Liability) |
| Conditions: | N/A. | N/A. |
| **Security** | **Security** | **Security** |
|  | The following security, which shall be in form and substance satisfactory to CIBC, is required to secure all present and future indebtedness and liabilities of the Borrower to CIBC (including under any foreign exchange contract or interest rate swap with CIBC). | The following security, which shall be in form and substance satisfactory to CIBC, is required to secure all present and future indebtedness and liabilities of the Borrower to CIBC (including under any foreign exchange contract or interest rate swap with CIBC). |
|  | ► | Movable Hypothec for a principal amount of $10,000,000 creating in favour of CIBC a first ranking hypothec in all present and future undertaking and movable property of the Borrower including receivables, inventory, incorporeal rights (including intellectual property), equipment and machinery. |
|  | ► | Immovable Hypothec in the principal amount of $15,000,000, creating in favour of CIBC a first ranking hypothec over the Property. |
|  | ► | Acknowledged assignment of an adequate fire and other perils insurance on the property and assets of the Borrower that are subject to CIBC's security, with loss payable to CIBC (and with designation of CIBC). |

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| | | |
|:---|:---|:---|
| **Financial Covenants** | **Financial Covenants** | **Financial Covenants** |
| Covenants: | The Borrower will ensure that: | The Borrower will ensure that: |
| Financial Covenants: |  |  |
|  | ► | The Fixed Charge Coverage Ratio is not less than 1.1 to 1.0 at any time. |
|  | "Fixed Charge Coverage Ratio" means the ratio of EBITDA to the sum of (i) Debt Service Requirements (which shall include amortization of the limit of the Demand Operating Credit over 20 years), (ii) cash income taxes (iii) unfunded capital and (iv) Restricted Payments. | "Fixed Charge Coverage Ratio" means the ratio of EBITDA to the sum of (i) Debt Service Requirements (which shall include amortization of the limit of the Demand Operating Credit over 20 years), (ii) cash income taxes (iii) unfunded capital and (iv) Restricted Payments. |
|  | ► | The Total Liabilities to Effective Equity Ratio does not exceed 2.5 to 1.0 at any time. |
| Hidden equity in the Property of $8,900,000 will be added back to Effective Equity, for the purpose of the above ratio.<br>The Financial Covenants shall be tested quarterly (on a trailing 12-month basis in the case of the Fixed Charge Coverage Ratio), based on the unaudited and audited financial statements of the Borrower. | Hidden equity in the Property of $8,900,000 will be added back to Effective Equity, for the purpose of the above ratio.<br>The Financial Covenants shall be tested quarterly (on a trailing 12-month basis in the case of the Fixed Charge Coverage Ratio), based on the unaudited and audited financial statements of the Borrower. | Hidden equity in the Property of $8,900,000 will be added back to Effective Equity, for the purpose of the above ratio.<br>The Financial Covenants shall be tested quarterly (on a trailing 12-month basis in the case of the Fixed Charge Coverage Ratio), based on the unaudited and audited financial statements of the Borrower. |

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| | |
|:---|:---|
| **Negative Covenants** | **Negative Covenants** |
| Restricted Payments: | Restricted Payments shall not be permitted without prior approval from CIBC. |
| Lien Restrictions: | None of the Borrower and its Subsidiaries will create, incur or suffer to exist any Lien on any of its property or assets, except: |
| (a) | Purchase Money Liens; |
| (b) | Liens existing on an asset when it was acquired by the Borrower or its Subsidiary (and not created in contemplation of the acquisition) to secure indebtedness existing at such time; or |
| (c) | Normal Course Liens. |
| Amalgamations, etc.: | None of the Borrower and its Subsidiaries will enter into any amalgamation or consolidation or merger or liquidate, wind-up or dissolve itself (or permit any liquidation, winding-up or dissolution or any proceedings therefor) or continue itself under the laws of any other statute or jurisdiction, except that, subject to the Borrower and its Subsidiaries taking such action, and executing and delivering to CIBC such agreements and other documents as CIBC may require, acting reasonably, to assure the continued validity, enforceability and effectiveness of the Security and the covenants, agreements and obligations of the Borrower under the Credits, and provided that there does not then exist any failure by the Borrower to perform or observe any of its covenants in this Agreement and no such failure would be created thereby, any wholly-owned Subsidiary may be amalgamated or consolidated or merged or liquidated, wound-up or dissolved with or into the Borrower, provided that the Borrower shall be the continuing corporation, or with or into any one or more other wholly-owned Subsidiaries. |
| Debt Restrictions: | None of the Borrower and its Subsidiaries will create, incur, assume or permit to exist any Debt except: |
| (i) | amounts owed to CIBC under the Credits; |
| (ii) | Purchase Money Obligations in an aggregate amount for the Borrower and its Subsidiaries not exceeding $500,000 at any time; |
| (iii) | Postponed Debt. |

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| | | |
|:---|:---|:---|
| Dispositions of<br> Property: | None of the Borrower and its Subsidiaries will sell, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any material part of its property, whether now owned or hereafter acquired, except that each of the Borrower and its Subsidiaries: | None of the Borrower and its Subsidiaries will sell, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any material part of its property, whether now owned or hereafter acquired, except that each of the Borrower and its Subsidiaries: |
|  | (i) | may sell in the normal course of its business for the purpose of carrying on the same, for fair market value, in accordance with customary trade terms, any property that would reasonably be considered to be the subject matter of sales by it in the normal course of its business for the purpose of carrying on the same; and |
|  | (ii) | may sell, transfer or otherwise dispose of any property that is worn out or obsolete or of no material value. |
| Restriction on<br> Investments: | None of the Borrower and its Subsidiaries will make any Investment without prior approval of CIBC. | None of the Borrower and its Subsidiaries will make any Investment without prior approval of CIBC. |
| Hostile Take-Overs: | None of the Borrower and its Subsidiaries will use any amount obtained by the Borrower under any of the Credits to finance a bid for any securities of any corporation in circumstances where the board of directors of such corporation has recommended (or is reasonably expected to recommend) rejection of such bid. | None of the Borrower and its Subsidiaries will use any amount obtained by the Borrower under any of the Credits to finance a bid for any securities of any corporation in circumstances where the board of directors of such corporation has recommended (or is reasonably expected to recommend) rejection of such bid. |
| Transactions with Affiliates: | Except as specifically permitted hereunder, none of the Borrower and its Subsidiaries will enter into any transaction, including the purchase, sale or exchange of any property or the rendering of any services, with any of its shareholders or with any of its Affiliates, or with any of its or their directors or officers, or enter into, assume or permit to exist any employment, consulting or analogous agreement or arrangement with any such shareholder or Affiliate or with any of its directors or officers, except a transaction or agreement or arrangement which is in the ordinary course of business of the Borrower or such Subsidiary and which is upon fair and reasonable terms not less favourable to the Borrower or its applicable Subsidiary than it would obtain in a comparable arms-length transaction. | Except as specifically permitted hereunder, none of the Borrower and its Subsidiaries will enter into any transaction, including the purchase, sale or exchange of any property or the rendering of any services, with any of its shareholders or with any of its Affiliates, or with any of its or their directors or officers, or enter into, assume or permit to exist any employment, consulting or analogous agreement or arrangement with any such shareholder or Affiliate or with any of its directors or officers, except a transaction or agreement or arrangement which is in the ordinary course of business of the Borrower or such Subsidiary and which is upon fair and reasonable terms not less favourable to the Borrower or its applicable Subsidiary than it would obtain in a comparable arms-length transaction. |

---

---

| | | |
|:---|:---|:---|
| **Conditions Precedent** | **Conditions Precedent** | **Conditions Precedent** |
| Conditions Precedent: | In addition to the documentation specified in section 5.1 of Schedule A and in Schedule B hereto, the obligation of CIBC to make available any Credit is subject to CIBC's receipt of the following, in form and substance satisfactory to CIBC: | In addition to the documentation specified in section 5.1 of Schedule A and in Schedule B hereto, the obligation of CIBC to make available any Credit is subject to CIBC's receipt of the following, in form and substance satisfactory to CIBC: |
|  | ► | Most recent Interim Financial statements confirming compliance with all covenants |
|  | ► | Reliance letter addressed to CIBC for the appraisal report with respect to the Property. |
|  | ► | Satisfactory environmental reports (with reliance letter addressed to CIBC) with respect to the Property. |
| <br> **Reporting Requirements** | <br> **Reporting Requirements** | <br> **Reporting Requirements** |
| Reporting<br> Requirements: | The Borrower will provide to CIBC: | The Borrower will provide to CIBC: |
|  | ► | Within 120 days after the end of each fiscal year, the audited consolidated financial statements of the Borrower for such year, prepared in accordance with GAAP. |
|  | ► | Within 30 days after the end of each fiscal quarter, the unaudited consolidated financial statements of the Borrower for such quarter, prepared in accordance with GAAP along with a Compliance Certificate. |
|  | ► | Promptly after obtaining knowledge thereof, particulars of any failure by any of the Borrower and its Subsidiaries to perform or observe any of its covenants or agreements in favour of CIBC. |
|  | ► | Such other information relative to the Borrower and its Subsidiaries as CIBC may reasonably require. |

---

---

| | |
|:---|:---|
| **Fees**<br>These fees are in addition to fees, costs or expenses described in Schedule A — Standard Credit Terms and Schedule B – Business Credit Card Agreement (Business Liability). | **Fees**<br>These fees are in addition to fees, costs or expenses described in Schedule A — Standard Credit Terms and Schedule B – Business Credit Card Agreement (Business Liability). |
| Monitoring: | A fee of $250 per month |
| Set-Up: | A fee of $11,250, payable on acceptance of this letter |
| Annual Fee: | A fee of 0.10% on the basis of the total limit of the Credits, payable annually by April 30<sup>th</sup> |
| **Other Provisions** | **Other Provisions** |
| Schedule A: | The attached Schedule A, which contains certain additional provisions applicable to the Credits, and certain definitions, forms part of this Agreement. |
| Schedule B: | The attached Schedule B, which contains certain additional provisions applicable to the Business Credit Card Facility and certain definitions, forms part of this Agreement. |
| Amendment to<br> Schedule A: | The following term(s) in the attached Schedule A are redefined below: |
| Notice of<br> Borrowing: | Whenever the Borrower desires to obtain any amount under a Credit (other than by way of a permitted overdraft), it will give to CIBC irrevocable prior written notice as specified in Schedule A hereto. |
| Notice of<br> Repayment: | Whenever the Borrower desires to make one or more repayments under one or more Credits in an aggregate amount exceeding $10,000,000 (or the equivalent in any other currency) on any day, it will give to CIBC irrevocable prior written notice as specified in Schedule A hereto. |
| Interest on Excess Amounts: | The interest rate applicable to any outstanding amount under a Credit which is in excess of the limit of such Credit shall be the Interest Rate Applicable to Credit Limit Excesses specified in Schedule A hereto. |
| Interest on<br> Overdue Amounts: | Interest on overdue amounts is payable as specified in Schedule A hereto. |
| Interest Payment Dates: | Except with respect to interest on amounts in default, which is payable on demand, or as otherwise specified herein or in Schedule A hereto, interest and fees will be calculated and payable monthly in arrears on such day in each month as CIBC requires. |

---

---

| | |
|:---|:---|
| Authorized Debits: | The Borrower authorizes CIBC to debit its Operating Account for any interest, fees or other amounts that are payable by the Borrower to CIBC with respect to the Credits, as and when such amounts are payable. |
| Communications: | Any communication or notice to be given with respect to the Credits may be effectively given by delivering the same at the addresses set out on the signature page hereof, or by sending the same by facsimile or prepaid registered mail to the parties at such addresses. Any notice so mailed will be deemed to have been received on the tenth day next following the mailing thereof, provided that postal service is in normal operation during such time. Any facsimile notice will be deemed to have been received on transmission if sent on a Business Day and, if not, on the next Business Day following transmission. Either party may from time to time notify the other party, in accordance with this section, of any change of its address which thereafter will be the address of such party for all purposes of the Credits. |
| Replacements: | This letter amends and restates in its entirety, without novation, the Existing Credit Agreement. All rights, benefits, indebtedness, interests, liabilities and obligations of the parties to the Existing Credit Agreement are hereby renewed, amended and restated according to the terms and provisions set forth herein and in any security documents and guarantees signed by such parties prior to the date hereof. This letter does not constitute, nor shall it result in, a novation, waiver of or release, discharge or forgiveness of any amount payable pursuant to the Existing Credit Agreement or any indebtedness, liabilities or obligations of the Borrower or any guarantors thereunder, all of which are renewed and continued and are hereafter payable and to be performed in accordance with the terms of this Agreement and the security documents and guarantees signed prior to the date hereof. Borrower also hereby ratifies any and all security documents and hypothecs previously granted in favour of CIBC in any jurisdiction and acknowledges that such security documents and hypothecs shall secure the obligations described herein. |
| English Language: | The parties confirm their express wish that this Letter and all documents related thereto be drawn up in English. *Les parties confirment leur volonté expresse de voir le présent contrat et tous les documents s'y rattachant être rédigés en anglais.* |

---

<u>General remarks:</u>

When you sign this Agreement, you recognize that: (a) you have read it and all the documents attached thereto (including Schedule A, "Additional Definitions and Provisions" and Schedule B – Business Credit Card Agreement (Business Liability); (b) you have obtained all the information and explanations requested on the said documents from CIBC; (c) you fully understand the meaning of the said documents; (d) the Agreement was freely negotiated by you and CIBC and, consequently, that it must not be construed as a contract of adhesion; and, finally, (e) that CIBC has the power and authority to transmit current and future information on you to any guarantor.

---

| | |
|:---|:---|
| Yours truly, | Yours truly, |
| **CANADIAN IMPERIAL BANK OF COMMERCE** | **CANADIAN IMPERIAL BANK OF COMMERCE** |
| By: | */s/ Christopher Lo Manno* |
| Name: | Christopher Lo Manno |
|  | Authorized Signatory |
| By: | */s/ Mark Stein* |
| Name: | Mark Stein |
|  | Authorized Signatory |

---

Please indicate your acceptance of these terms by signing below and returning the enclosed copy to our attention no later than January 16<sup>th</sup>, 2023.

---

| | |
|:---|:---|
| Strong/MDI Screen Systems, Inc. | Strong/MDI Screen Systems, Inc. |
| By: | */s/ Mark D. Roberson* |
| Name: | Mark D. Roberson |
| Title: | Chairman |

---

Signed this <u>13<sup>th</sup></u> day of <u>January</u> , <u>2023</u> .

SCHEDULE A - ADDITIONAL DEFINITIONS AND PROVISIONS

[\*\*\*]

Schedule B

CIBC Business Credit Agreement (Business Liability)

[\*\*\*]

## Exhibit 10.4

**Exhibit 10.4**

**[Pursuant to Item 601(a)(5) of Regulation S-K, schedules and attachments to this exhibit have been omitted. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.]**

 **MASTER ASSET PURCHASE AGREEMENT**

**THIS AGREEMENT** is made as of ___________________

**BETWEEN**:

**STRONG/MDI SCREEN SYSTEMS, INC.**, a company existing under the laws of Québec with an address at 1440 Rue Raoul-Charette, Joliette, QC J6E 8S7

(the "**Transferor**")

**AND:**

**STRONG/MDI SCREEN SYSTEMS, INC.**, a company incorporated under the laws of British Columbia with its registered address at 2300 – 550 Burrard Street, Vancouver, BC V6C 2B5

(the "**Company**")

**CONTEXT:**

**A.** The
 Transferor manufactures premium projection screens and customized screen support systems, distributes cinema equipment, and provides
 technical support services to the entertainment industry (the "**Entertainment Business** ").

**B.** The
 Company is a wholly owned subsidiary of the Transferor.

**C.** Strong
 Global (as defined below), a wholly owned subsidiary of the Transferor, intends to complete an initial public offering of its Class
 A Common Voting shares ("Common Shares") and list its Common Shares on the New York Stock Exchange
 American (the "**IPO** ").

**D.** In
 connection with the IPO, Strong Global, the Transferor and the Company will enter into certain agreements, including this Agreement,
 pursuant to which, among other matters, effective on the date the IPO completes, the Company will become a wholly-owned subsidiary
 of Strong Global.

**E.** The
 Transferor wishes to transfer to the Company, and the Company wishes to acquire, all of the Transferor's assets that are used
 in connection with the Entertainment Business on the terms and conditions set out in this Agreement.

**F.** The
 Transferor and the Company have agreed to make a joint election pursuant to subsection 85(1) of the Tax Act (as defined below) (and
 the equivalent provision under any provincial tax legislation) in the manner set forth herein with the intent that the transfer of
 the Entertainment Business to the Company be effected on a fully tax-deferred rollover basis.

**THEREFORE,** in consideration of the mutual promises set out in this Agreement and other valuable consideration, the Transferor and the Company hereby agree with each other as follows:

**1.** **Definitions and Interpretation** 

1.1 Whenever
 used in this Agreement, all capitalized terms shall have the meaning set forth herein:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Adjusted Elected Amount**" has the meaning ascribed to such term in Section 7.3;

(b) "**Affiliate** "
 means an affiliate as that term is defined in the *Business Corporations Act* (British Columbia);

(c) "**Agreement** "
 means this Master Asset Purchase Agreement, including the Context, all schedules hereto, and all amendments, supplements and restatements
 hereof;

(d) "**Business Day**" means any day that is not a Saturday, a Sunday or other day on which Canadian chartered banks are required or authorized
 by Law to be closed in Vancouver, British Columbia;

(e) "**Canada Life Policy**" has the meaning ascribed to such term in Section 9.5;

(f) "**Closing Date**" means the date on which closing occurs which will be the same date as the closing date of the IPO;

(g) "**Company** "
 has the meaning ascribed to it on the first page of this Agreement;

(h) "**Company Portion of the Bonus**" has the meaning ascribed to such term in Section 9.4;

(i) "**Confidential Information**" means information that is of value to a Party, and is not generally known in the industry or to competitors
 of a Party, and includes, but is not limited to, business information, specifications, research, software, trade secrets, discoveries,
 ideas, know-how, designs, drawings, flow chart, data, computer programs, marketing plans, budget figures, and other financial and
 business information, or any such information of clients, parents affiliates, subsidiaries or agents of a party, which is disclosed
 by such party ("Disclosing Party") whether directly in oral or material form to the other party ("Receiving Party"),
 or indirectly, by permitting the Receiving Party to observe the conduct of the Disclosing Party's various operations or processes,
 but shall not include information that: a) is or becomes publicly available without a breach of this Agreement; or b) is already
 known to the Receiving Party at the time of its disclosure by the Disclosing Party, and is not subject to confidentiality restrictions
 imposed by the Disclosing Party; or c) following its disclosure to the Receiving Party, is received by the Receiving Party from a
 third party without obligation of confidence to the Disclosing Party; or d) is independently developed by the Receiving Party without
 reference to or use of the Disclosing Party's Confidential Information; or e) the Disclosing Party has given its prior written
 approval to disclose;

(j) "**Consideration Shares**" has the meaning ascribed to such term in Section 5.1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**Effective Time**" has the meaning ascribed to such term in Section 2.1;

(l) "**Elected Amount**" has the meaning ascribed to such term in Section 7.2;

(m) "**Entertainment Business**" has the meaning ascribed to such term in Recital A;

(n) "**ETA** "
 means the *Excise Tax Act* (Canada);

(o) "**Excluded Assets**" has the meaning ascribed to such term in Section 2.1;

(p) "**Governmental Authority**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any
 federal, provincial, state, local, municipal, regional, territorial, aboriginal, or other government, governmental or public department,
 branch, ministry, or court, domestic or foreign, including any district, agency, commission, board, arbitration panel or authority
 and any subdivision of any of them exercising or entitled to exercise any administrative, executive, judicial, ministerial, prerogative,
 legislative, regulatory, or taxing authority or power of any nature; and

(ii) any
 quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of
 them, and any subdivision of any of them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Group RRSP**" has the meaning ascribed to such term in Section 9.6;

(r) "**GST/HST** "
 means Goods and Services Tax ()"**GST** ")/Harmonized Sales Tax ()"**HST**") levied under the ETA;

(s) "**Intellectual Property**" means all intellectual property and proprietary rights of every kind and description throughout the world, including
 all Canadian and foreign:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) patents
 (including utility, utility model, design patents, and certificates of invention) and patent applications (including additions, provisional,
 national, regional and international applications, as well as original, continuation, continuation-in-part, divisional, continued
 prosecution applications, requests for continued examination, re-examinations, continuations and continuations-in-part thereof;

(ii) trademarks,
 service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, design rights, and other similar designations
 of source or origin, together with the goodwill symbolized by any of the foregoing;

(iii) copyrights
 and copyrightable subject-matter;

(iv) computer
 programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting
 the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) trade
 secrets and all other confidential information, ideas, know-how, discoveries, inventions, proprietary processes, formulae, models,
 and methodologies;

(vi) rights
 of publicity, privacy, rights to personal information;

(vii) moral
 rights and rights of attribution and integrity;

(viii) social
 media addresses and accounts and usernames, account names and identifiers (whether textual, graphic, pictorial or otherwise), and
 sub-domain names and personal URL's used or acquired in connection with a third-party website;

(ix) all
 rights in the foregoing and in other similar intangible assets;

(x) all
 applications and registrations, and any renewals, extensions and reversions, for the foregoing; and

(xi) together
 with each of the foregoing, all claims for damages by reason of past infringement thereof, with the right to sue for, and collect
 the same;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "**Law** "
 or "**Laws**" means all laws, statutes, codes, ordinances, decrees, rules, regulations, by-laws, statutory rules,
 principles of law, published policies and guidelines, judicial or arbitral or administrative or ministerial or departmental or regulatory
 judgments, orders, decisions, rulings or awards, including general principles of common and civil law, and the terms and conditions
 of any grant of approval, permission, authority or licence of any Governmental Authority;

(u) "**Liability** "
 or "**Liabilities**" means any and all indebtedness, liabilities, costs, expenses, interest, and obligations, whether
 accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, reserved or unreserved, or determined or determinable,
 including those arising under any Law, action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation,
 determination or award entered by or with any Governmental Authority and those arising under any Contract or any fines, damages or
 equitable relief which may be imposed and including all costs and expenses related thereto;

(v) "**Personal Information**" means information about an individual who can be identified by the person who holds that information;

(w) "**Purchase Price**" has the meaning ascribed to such term in Section 4.1;

(x) "**QST** "
 means the Québec sales tax imposed under the QSTA;

(y) "**QSTA** "
 means An Act respecting the Québec sales tax (Quebec);

(z) "**Representatives** "
 means the advisors, agents, consultants, directors, officers, management, employees, subcontractors, and other representatives, including
 accountants, auditors, financial advisors, lenders, and lawyers of the Transferor or the Company, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) "**Secondary Information**" has the meaning ascribed to such term in Section 11.4;

(bb) "**Strong Global**" mean Strong Global Entertainment Inc., a company incorporated under the Laws of British Columbia;

(cc) "**Tax Act**" means the *Income Tax Act* (Canada);

(dd) "**Transferor** "
 has the meaning ascribed to it on the first page of this Agreement;

(ee) "**Transferred Assets**" has the meaning ascribed to such term in Section 2.1; and

(ff) "**Transferred Workforce**" has the meaning ascribed to such term in Section 9.1.

**1.2** **Schedules** 

The following Schedules are incorporated by reference into and form part of this Agreement:

---

| | |
|:---|:---|
| Schedule "A" | Transferred Assets |
| Schedule "B" | Excluded Assets |
| ‎Schedule "C" | Allocation of Purchase Price |
| Exhibit "2.3" | Form of Assignment Agreement |
| Exhibit "10.1" | Form of Joliette Plant Lease |

---

**1.3** **Headings** 

The division of this Agreement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The Article and Section headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer and shall not be considered part of this Agreement.

**1.4** **Gender and Number** 

Words expressed in the singular include the plural and vice-versa and words in one gender include all genders.

**1.5** **Currency** 

Unless otherwise indicated, all dollar amounts referred to in this Agreement are in Canadian funds.

**1.6** **Statutory References** 

Any reference to a statute shall include and shall be deemed to be a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulation that may be passed which has the effect of supplementing or superseding or re-enacting the statute so referred to or the regulations made pursuant thereto.

**1.7** **Day Not a Business Day** 

In the event that any day on or before which any action is required to be taken hereunder after the Closing Date is not a Business Day, then such action will be required to be taken on or before the requisite time on the next succeeding Business Day.

**1.8** **Construction** 

The words "including" and "includes" where used in this Agreement shall be deemed to mean "including, without limitation" and "includes, without limitation," respectively.

**2.** **Transfer of Entertainment Business** 

2.1 The
 Transferor hereby transfers and assigns to the Company, as a going concern, all of the Transferor's
 property and assets, including for greater certainty its Intellectual Property, real and
 personal and movable and immovable, wherever located, that relate to, or are used or held
 for use in, the Entertainment Business, including, but not limited to, those assets set out
 in **Schedule A** (collectively, the "**Transferred Assets** "), but excluding
 the property and assets set out in **Schedule B**, being property and assets not used
 in the Entertainment Business (collectively, the "**Excluded Assets** "), such
 transfer to be effective as of the beginning of the day (the "**Effective Time** ")
 on the Closing Date on the terms and conditions set out in this Agreement, free and clear
 of any lien, charge, and encumbrance of any nature or kind whatever.

2.2 The
 transfer referred to in Section 2.1 will be effective at the Effective Time on the Closing Date and the Company will, immediately
 thereupon, be the beneficial owner of the Transferred Assets.

2.3 The
 Transferor will deliver any documents or instructions reasonably required, including an executed assignment agreement in the form
 attached to this Agreement as Exhibit 2.3 or other executed agreement(s) in form and substance acceptable to Company, all with a
 view to effecting the transfer of the Transferred Assets to the Company effective as of the Effective Time on the Closing Date.

2.4 Regardless
 of the date of registration of the transfer of title to any of the Transferred Assets the Company will be entitled to all income
 derived from the Transferred Assets and all proceeds in respect of the Transferred Assets effective as of the Effective Time on the
 Closing Date, and the Transferor will pay and set over to the Company all such income, proceeds, or other amounts, whether received
 by the Transferor or credited to the account of the Transferor. Pending the date of registration of the transfer of title to any
 of the Transferred Assets to the Company or any permits or consents required to carry on the Entertainment Business being obtained
 by the Company, the Transferor will, effective as of the Effective Time on the Closing Date, hold registered title in and to such
 Transferred Assets, and carry on the Entertainment Business, as required, as nominee, agent, and bare trustee for and on behalf of,
 and as directed by, the Company.

2.5 The
 transactions contemplated by this Agreement are conditional on the IPO being completed not later than December 31, 2023.

**3.** **Assumption of Obligations and Excluded Liabilities** 

Effective as of the Effective Time on the Closing Date, as an inherent part of acquiring the Transferred Assets, the Company will be responsible for all Liabilities and obligations arising out of or related to the Company's ownership or operation of the Transferred Assets and the Entertainment Business after the Effective Time on the Closing Date, but not any other Liabilities or obligations of the Transferor. For greater certainty, the Company will have no obligation and will not assume, and the Transferor will retain and timely pay, perform, defend and discharge, (i) all of the Transferor's Liabilities that do not constitute Transferred Assets or the Liabilities, and (ii) any obligations not expressly assumed in this Section 3, whether disclosed or undisclosed, known or unknown, direct or indirect, absolute or contingent, secured or unsecured, liquidated or unliquidated, accrued or otherwise, including no assumption of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any
 Liabilities in respect of any existing, pending or threatened action or litigation arising out of, relating to, or otherwise in respect
 of, the operation of the Business or the Transferred Assets, to the extent such action relates to the operation of the Business or
 the Transferred Assets on or prior to the Closing Date;

(b) any
 product Liability or similar claim for injury to a person or property which arises out of, or is based upon, any express or implied
 representation, warranty, agreement or guarantee made by the Transferor or an Affiliate of the Transferor, or by reason of the improper
 performance or malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards
 or other related product defects, of any products at any time manufactured, distributed and/or sold or any service performed by the
 Transferor or an Affiliate of the Transferor, to the extent that such Liability relates to the distribution and/or sale of any product
 or the performance of any services, on or prior to the Closing Date; and

(c) any
 recall, design defect, or similar claims of any products manufactured distributed or sold, or any service performed by, the Transferor
 or an Affiliate of the Transferor, to the extent such claims relate to any product manufactured, distributed and/or sold or the performance
 of any services, on or prior to the Closing Date.

3.2 For
 greater certainty, the Transferor will indemnify and hold harmless the Company from and against all loss, costs, and/or damages that
 the Company may suffer arising from or in connection with any non-compliance and/or violation of environmental Laws and/or regulations
 applicable to the Entertainment Business relating to a period in time which is on or prior to the Closing.

**4.** **Purchase Price of Transferred Assets** 

4.1 The
 total purchase price for the Transferred Assets (the "**Purchase Price**") is equal to the fair market value of the
 Transferred Assets as of the Closing Date, which, subject to Section 6.1, the Transferor and the Company have estimated to be the
 amount set out as the total Purchase Price in **Schedule C**.

4.2 The
 Purchase Price will be allocated among the assets purchased under this Agreement in accordance
 with their respective fair market values as recorded by the Transferor and the Company in **Schedule C** before or after the date of this Agreement. The Transferor and the Company
 will cooperate in preparing, completing, and filing any elections under the Tax Act and other
 taxation statutes that are necessary or desirable to give effect to this allocation for tax
 purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Satisfaction of Purchase Price of Transferred Assets** 

5.1 As
 full consideration for the transfer of the Transferred Assets to the Company pursuant to this Agreement, and in full satisfaction
 of the Purchase Price, the Company hereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) allots,
 and will issue to the Transferor on the Closing Date, 9,999 Common shares without par value in the Company (the "**Consideration Shares** "); and

(b) agrees
 to assume, pay when due, perform, and discharge the Liabilities and obligations of the Transferor in connection with the accounts
 payable, owing, or accruing due in connection with the Entertainment Business subject, for greater certainty, to the limitations
 on Liabilities and obligations set out in Section 3.

5.2 The
 Company will allot and issue to the Transferor the Consideration Shares as fully paid and non-assessable shares in the Company and
 will cause one or more share certificates representing the Consideration Shares to be issued in the name of the Transferor as soon
 as practicable on or after the Closing Date in accordance with the *Business Corporations Act* (British Columbia).

5.3 The
 aggregate issue price for the Consideration Shares will be equal to the fair market value of the Transferred Assets before the transfer
 pursuant to this Agreement less the amount of the Liabilities and obligations assumed by the Company pursuant to Section 5.1(b).

5.4 The
 Company will add to its capital in respect of the Consideration Shares an amount equal to the Elected Amount, as described in Section
 7.2, plus the fair market value of any property and assets for which an election under subsection 85(1) of the Tax Act (and the equivalent
 provision under any provincial tax legislation) is not made pursuant to this Agreement, less the amount of the Liabilities and obligations
 assumed by the Company pursuant to Section 5.1(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Value of Transferred Assets** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 Notwithstanding
 any provision in this Agreement to the contrary, the intention of the parties is that the Purchase Price and the aggregate fair market
 value of the Consideration Shares be equal to the fair market value of the Transferred Assets at the Closing Date. If the Company
 or the Transferor determines that the actual fair market value of the Transferred Assets as at the Closing Date may be greater or
 less than the fair market value of the consideration to be given therefor by the Company (whether such determination is based on
 an appraisal, advice from an accountant, the determination of a court of competent jurisdiction, a determination, assessment, or
 proposed assessment by a competent taxing authority, or on any other factor or evidence) then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 Transferor and the Company, acting in good faith, will agree upon a re-determination of the actual fair market value of the Transferred
 Assets as at the Closing Date (and if they are unable to agree between themselves on such fair market value, they will jointly appoint
 an arbitrator, appraiser or Canadian chartered accountant to make that determination in the same manner as referred to above); and

(b) the
 Company and the Transferor will make the appropriate adjustments, including by adjusting the amount of the Purchase Price and the
 issue price for the Consideration Shares issued by the Company under Section 5.1 or otherwise as the parties see fit, such adjustments
 to be made, and to take effect, retroactively *nunc pro tunc* to the Closing Date.

**7.** **Tax Election** 

7.1 The
 Transferor and the Company will, each at the request of the other, jointly elect in the form, and within the time, prescribed pursuant
 to subsection 85(1) of the Tax Act (and the equivalent provision under any provincial tax legislation) in respect of the transfer
 of the Transferred Assets (to the extent the election described in subsection 85(1) of the Tax Act is available in respect of the
 Transferred Assets) to the Company pursuant to this Agreement with the intent that the transfer of the Transferred Assets will be
 on a fully tax-deferred basis to the Transferor.

7.2 The
 amounts agreed upon by the Transferor and the Company with respect to each of the property
 and assets comprising the Transferred Assets for which an election under subsection 85(1)
 of the Tax Act (and the equivalent provision under any provincial tax legislation) will be
 made will be set out in the election form referred to in Section 7.1 (collectively referred
 to herein as the "**Elected Amount**") within the limits allowed in that regard
 in the Tax Act.

7.3 If
 it is determined by the parties (whether such determination is based on advice from an accountant, the determination of a court of
 competent jurisdiction, a determination, assessment, or proposed assessment by a competent taxing authority, or on any other factor
 or evidence) that the Elected Amount will not result in the transfer of the Transferred Assets on a fully tax-deferred basis to the
 Transferor, then the Elected Amount will be adjusted to equal such amount (the "**Adjusted Elected Amount**") as may
 be agreed to by the parties or, failing such agreement, such amount as may be determined by a court of competent jurisdiction or
 by a competent taxing authority. Any adjustment made pursuant to this Section will be made with retroactive effect as of the Closing
 Date and this Section may be invoked any number of times. The parties will make such further or amended elections, enter into such
 acknowledgments or agreements, and do or cause to be done such further acts and things as may be, in the opinion of counsel, reasonably
 necessary to give effect to this Agreement.

**8.** **Taxes** 

8.1 The
 Transferor will pay all taxes relating to the operation of the Entertainment Business that arise before, or are related to a period
 of time before, the Closing Date.

8.2 The
 Transferor and the Company will, each at the request of the other, compete and sign joint elections under subsection 156(2) of the
 ETA and under section 334 of the QSTA on or before the Closing Date to avoid the application of goods and services and harmonized
 sales tax or Québec sales tax to the purchase and sale of the Transferred Assets under this Agreement. The Company will duly
 file the elections as appropriate within the time permitted under the ETA and the QSTA.

8.3 The
 Company will be liable for and will pay all taxes, including all retail sales and commodity taxes, properly payable by the Company
 in connection with the transfer of the Transferred Assets to the Company pursuant to this Agreement.

8.4 The
 Transferor and the Company will execute and file, within the prescribed time limits, a joint election under section 22 of the Tax
 Act and a joint election under section 184 of the *Taxation Act* (Québec) and any corresponding provisions of any other
 applicable tax Law, and will designate in those joint elections the portion of the Purchase Price allocated to the accounts receivable
 under Section 4 as the consideration paid by the Company to the Transferor for the accounts receivable for the purposes of the elections.

8.5 To
 the extent applicable and if the parties agree, if the Transferor has received any amount in respect of an obligation to deliver
 goods or services, and the Company has agreed to assume that obligation under this Agreement, and Transferred Assets having a fair
 market value equal to that amount are being transferred to the Company under this Agreement as payment by the Transferor for the
 Company's agreement to assume that obligation, the parties will file an election pursuant to subsections 20(24) and 20(25)
 of the Tax Act, and any corresponding provisions of any other applicable tax Law, within the prescribed time period.

8.6 For
 U.S. federal income tax purposes, to the extent applicable, the parties agree to treat the transactions contemplated herein as a
 tax free contribution under Section 351 of the Internal Revenue Code and will report their tax returns consistent with that position.

**9.** **Employees** 

9.1 The
 Company will employ each employee who is employed by the Transferor in connection with the Entertainment Business immediately prior
 to the Effective Time on the Closing Date (collectively, the "**Transferred Workforce**") on the same terms and conditions
 that govern the current employment relationship between the Transferor and each particular employee, and for greater certainty, but
 subject to Section 9.2 and 9.3 of this Agreement, will recognize such employee's original date of hire by the Transferor for
 the purposes, among others, of calculating such employee's service-based benefits and entitlements, accrued vacation time,
 and accrued vacation pay.

9.2 Any
 amount that becomes payable by the Company to, or in respect of, an employee included in the Transferred Workforce that is attributable
 to or accrued during a period ending before the Effective Time on the Closing Date will be for the sole account of the Transferor.
 The Transferor will promptly reimburse the Company for any such amounts paid by the Company to, or in respect of, such employee.

9.3 Any
 amount that becomes payable to the Company by an employee included in the Transferred Workforce that is attributable to a period
 ending before the Effective Time on the Closing Date will be the property of the Transferor, and if received by the Company, will
 be paid over promptly to the Transferor. The Company will, if the Transferor so requests and at the Transferor's expense, use
 its reasonable best efforts to obtain and expedite the receipt of any amount payable to which the Transferor is entitled under this
 Section 9.3.

9.4 Any
 amount paid by the Transferor to an employee included in the Transferred Workforce on account of a bonus or similar payment that
 is attributable, in whole or in part, to a period beginning on or after the Effective Time on the Closing Date (i.e., a prepaid bonus
 paid by the Transferor) will be, only as in regard to that part of the amount attributable to the period beginning on or after the
 Effective Time on the Closing Date (the "**Company Portion of the Bonus** "), for the sole account of the Company.
 The Company will reimburse the Transferor for any such Company Portion of the Bonus paid by the Transferor promptly upon the employee
 meeting all vesting requirements and the amount becoming indefeasibly vested in the employee.

9.5 Effective
 as of the Effective Time, the Transferor will cause Group Policy No 172693 with Canada Life (the "**Canada Life Policy** ")
 to be transferred to the Transferee, and the Transferee shall assume the Canada Life Policy. From and after the Effective Time, all
 rights and obligations of the Transferor under or in respect of the Canada Life Policy are transferred to, and assumed by, the Transferee.
 Each employee included in the Transferred Workforce who, immediately prior to the Effective Time, has coverage under the Canada Life
 Policy shall continue to have coverage at the Effective Time under the Canada Life Policy on the same terms and conditions as immediately
 prior to the Effective Time.

9.6 Effective
 as of the Effective Time, the Transferor will cause Group Policy No 99238-G with Sun Life Financial (the "**Group RRSP** ")
 to be transferred to the Transferee, and the Transferee shall assume the Group RRSP. From and after the Effective Time, all rights
 and obligations of the Transferor under or in respect of the Group RRSP are transferred to, and assumed by, the Transferee. Each
 employee included in the Transferred Workforce who, immediately prior to the Effective Time, is a member of the Group RRSP shall
 continue to be a member of the Group RRSP at the Effective Time on the same terms and conditions as immediately prior to the Effective
 Time.

**10.** **Other Covenants** 

10.1 The
 Transferor and the Company covenant to enter into a long term lease agreement in respect of the property currently owned and occupied
 by the Transferor and located at 1440 Rue Raoul-Charette, Joliette, Québec, J6E 8S7, for a fifteen year term, with the option
 of the Company to renew such lease for five (5) consecutive periods of five (5) years each, save and except for the last period,
 which shall be of five (5) years less one (1) day, such options to renew to be exercisable by the Company upon written notice 12
 months prior to the expiry of the then current term at market rates. Under the lease, the Company shall also have a right of first
 refusal to purchase the property in the event that the Transferor wishes to sell the property to a third party in the future. The
 lease shall be substantially in the form attached hereto as Schedule 10.1.

**11.** **Confidential Information** 

11.1 The
 Company acknowledges that the Company is receiving the Transferor's Confidential Information on a confidential basis and the
 Transferor shall remain its exclusive owner of all Intellectual Property therein.

11.2 Until
 the Effective Time on the Closing Date or, if this Agreement is terminated in accordance with Section 14.1, then perpetually, the
 Company will, subject to Section 12.3, keep confidential and not disclose or use, and the Company will not allow any of its Representatives
 to disclose or use, any of the Transferor's Confidential Information, for any purpose, except as contemplated by this Agreement.
 If this Agreement is terminated, all of the Transferor's Confidential Information obtained by the Company, including all copies,
 whether in written form or stored electronically, will be returned to the Transferor promptly after that termination. On and after
 the Effective Time on the Closing Date, the Transferor will keep perpetually confidential and not disclose or use, and the Transferor
 will not allow any of its Representatives to disclose or use, any Confidential Information transferred to Company pursuant to Section
 2.1 without the prior written consent of the Company.

11.3 The
 obligation of the Company under Section 12.2 to keep confidential and not disclose or use any Confidential Information does not apply
 to any Confidential Information that the Company is required to disclose by any applicable Law, by any rule or regulation of any
 court or government agency of competent jurisdiction, or pursuant to legal process, provided that the Company provides the Transferor
 with prompt written notice of the requirements to disclose, reasonable assistance in the opposing or limiting of such disclosure,
 and limits such disclosure to that strictly required by such court, government agency or legal process.

11.4 The
 Transferor and the Company acknowledge that the computers and data storage and retrieval systems or network of the Company and, if
 applicable, its Representatives, may automatically back up both Parties' Confidential Information stored in electronic form.
 The Transferor and the Company agree that to the extent that those back-up procedures automatically create electronic copies of Confidential
 Information ()"**Secondary Information** "), each of the Company and, if applicable, its Representatives, may, despite
 any requirement under this Agreement to return or destroy the Transferor's Confidential Information, retain Secondary Information
 in its archival storage for the period that it would normally archive electronic data, provided that those data are periodically
 and systematically overwritten or otherwise destroyed. Secondary Information will be subject to the provisions of this Agreement
 until destroyed and may not be accessed by the Company or any of its Representatives during its period of archival storage.

**12.** **Personal Information – Post-Closing** 

Following the Closing, the Company will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) use
 and disclose the Personal Information transferred to it under the terms of this Agreement solely for the purposes for which that
 Personal Information was collected or permitted to be used or disclosed before the transaction was completed;

(b) neither
 use nor disclose any of that Personal Information for any purpose that does not relate directly to the Business; and

(c) notify
 the employees, customers, directors, officers, and shareholders whose Personal Information is disclosed that the transactions contemplated
 by this Agreement have taken place.

**13.** **Representations and Warranties** 

13.1 The
 Transferor represents and warrants to the Company that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 Transferor has full right, power, and authority to enter into this Agreement and to sell, transfer, assign, and convey the Transferred
 Assets to the Company free and clear of all liens, charges, and encumbrances;

(b) the
 Transferor has obtained any consent, authorization or approval, if any, that the Transferor is required to obtain from a third party
 under any obligation, contractual or otherwise in connection with the execution, delivery, or performance by the Transferor of this
 Agreement or the completion of any of the transactions contemplated herein;

(c) the
 Transferor owns and operates the Entertainment Business and owns, possesses, and has good and marketable title to all of the Transferred
 Assets to be transferred to the Company under this Agreement, free and clear of all liens, charges, and encumbrances (other than
 liens for current taxes not yet due) and, as of the Closing Date, the Transferor will have the absolute and exclusive right to transfer
 the Transferred Assets to the Company as contemplated by this Agreement;

(d) the
 Transferor is resident in Canada within the meaning of the Tax Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the
 Transferor is registered under subdivision d of Division V of Part IX of the ETA and under Division I of Chapter VIII the QSTA and
 its registration numbers are XXXX and XXXX, respectively. The Transferor will provide an invoice or other documentation
 in a form requested by the Company to support an input tax credit claim for GST/HST payable under this Agreement and any input tax
 refund claim for QST payable under this Agreement.

13.2 The
 Company represents and warrants to the Transferor that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 Company has full right, power, and authority to enter into this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 Company has obtained any consent, authorization or approval, if any, that the Company is required to obtain from a third party under
 any obligation, contractual or otherwise in connection with the execution, delivery, or performance by the Company of this Agreement
 or the completion of any of the transactions contemplated herein;

(c) the
 Company is a taxable Canadian corporation within the meaning of the Tax Act; and

(d) the
 Company is registered under subdivision d of Division V of Part IX of the ETA and under Division I of Chapter VIII the QSTA and its
 registration numbers are XXXX and XXXX, respectively.

13.3 The
 representations and warranties of the Transferor and the Company set out in this Agreement, and all covenants of the Transferor and
 the Company set out in this Agreement will survive the completion of the transfer of the Transferred Assets provided for in this
 Agreement and, notwithstanding such completion, will continue in full force and effect for the benefit of the Company or the Transferor,
 as the case may be, in accordance with the terms thereof.

**14.** **General Contract Provisions** 

14.1 This
 Agreement may be terminated at any time before the Effective Time by mutual written consent of the Transferor and the Company.

14.2 From
 time to time, the Company and the Transferor will each execute and deliver all such further documents, certificates, deeds, conveyances,
 transfers, assignments, declarations, affidavits, and other documents necessary or desirable to give effect to the full intent of
 this Agreement, including the transfer of the Transferred Assets and the Company's employment of each employee included in
 the Transferred Workforce.

14.3 This
 Agreement will enure to the benefit of, and be binding upon, the respective successors and permitted assigns of the Transferor and
 the Company.

14.4 Whenever
 the singular or masculine is used in this Agreement, it will be construed as meaning the plural or the feminine or neuter, and vice
 versa, where the context or the parties so require.

14.5 The
 term "**Agreement**" means the agreement between the Transferor and the Company evidenced by this document, as amended
 from time to time, together with the Schedules.

14.6 This
 Agreement and all matters arising hereunder will be governed by and construed in accordance with the Laws of British Columbia.

14.7 Time
 will be of the essence in this Agreement.

14.8 No
 failure or delay on the part of either party in exercising any right, power or privilege under this Agreement will operate as a waiver
 thereof, nor will any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof
 or the exercise of any other right, power or privilege. Except as may be limited herein, either party may, in its sole discretion,
 exercise any and all rights, powers, remedies and recourses available to it under this Agreement or any other remedy available to
 it and such rights, powers, remedies and recourses may be exercised concurrently or individually without the necessity of making
 any election.

14.9 This
 Agreement may be executed in any number of counterparts, each of which when executed and delivered is an original and all of which
 taken together constitute one and the same instrument.

14.10 This
 Agreement and each counterpart may be created, executed, signed, retained, or otherwise dealt with in digital or other intangible
 form of any format (including PDF), and may be delivered, transmitted, or otherwise dealt with by any digital or other intangible
 means (including by email, facsimile, or otherwise). Each digital or other intangible form of this Agreement or counterpart, and
 each copy and printout thereof, is hereby declared and agreed to be as valid and effective as a manually signed document.

**[*signature page follows*]**

**BY SIGNING BELOW** the Transferor and the Company each confirms that this document sets out the agreement reached by them and each of them acknowledges its intention to be bound by this contract.

---

| | |
|:---|:---|
| **STRONG/MDI SCREEN SYSTEMS, INC.** | **STRONG/MDI SCREEN SYSTEMS, INC.** |
| (Québec) | (Québec) |
| Per: | |
|  | Authorized Signatory |

---

---

| | |
|:---|:---|
| **STRONG/MDI SCREEN SYSTEMS, INC.** | **STRONG/MDI SCREEN SYSTEMS, INC.** |
| (British Columbia) | (British Columbia) |
| Per: | |
|  | Authorized Signatory |

---

**SCHEDULE A**

**TRANSFERRED ASSETS**

Strong/MDI Screen Systems, Inc. (Québec) ("Transferor") property and assets, real and personal and movable and immovable, wherever located, that relate to, or are used or held for use in, the Entertainment Business:

---

| | |
|:---|:---|
| **(i).** | **Intellectual Property and Intangibles** |
|  | <u>Patents</u> |
|  | [\*\*\*] |
|  | <u>Trademarks</u> |
|  | [\*\*\*] |
|  | <u>Software</u> |
|  | [\*\*\*] |
|  | <u>Open Source Component(s)</u> |
|  | [\*\*\*] |
|  | <u>Know-How</u> |
|  | [\*\*\*] |
|  | <u>Other Intellectual Property</u> |
|  | [\*\*\*] |
| **(ii).** | **Permits and Licenses** |
|  | [\*\*\*] |
| **(iii).** | **Employee Benefit Plans** |
|  | [\*\*\*] |
| **(iv).** | **Property, Plant and Equipment** |
|  | [\*\*\*] |
| **(v).** | **Financing Agreements** |
|  | [\*\*\*] |

---

---

| | |
|:---|:---|
| **(vi).** | **Sales and Marketing Agreements** |

---

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

---

| | |
|:---|:---|
| **(vii).** | **Government Contract** |

---

● [\*\*\*]

---

| | |
|:---|:---|
| **(viii).** | **Material and other Contracts** |

---

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

● [\*\*\*]

**SCHEDULE B**

**EXCLUDED ASSETS**

The following are the "Excluded Assets" referred to in the within Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [\*\*\*]

(b) [\*\*\*]

(c) [\*\*\*]

**EXHIBIT 2.3**

**CONFIRMATORY OF OWNERSHIP AND OWNERSHIP ASSIGNMENT OF INTELLECTUAL PROPERTY**

WHEAEAS **STRONG/MDI SCREEN SYSTEMS, INC.**, a company existing under the laws of Québec with an address at 1440 Rue Raoul-Charette, Joliette, QC J6E 8S7 (the Assignor"), is or was the owner of all right, title and interest in and to certain intellectual property (the "Intellectual Property") consisting of and including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. inventions or improvements or designs, or other innovations, including trade secrets and confidential information (the "Inventions"),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. trademarks, tradenames, domain names, social media handles and/or other indicia of goodwill (the "Trademarks"), and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. certain works (the "Works"),

as summarized in Schedule "A";

AND WHEREAS, **STRONG/MDI SCREEN SYSTEMS, INC.**, a company incorporated under the laws of British Columbia with its registered address at 2300 – 550 Burrard Street, Vancouver, BC V6C 2B5 (the "Assignee"), has acquired from Assignor the entire right, title and interest in and to the Intellectual Property;

NOW THEREFORE, for sufficient, good, and valuable consideration, the receipt of which is hereby acknowledged, the Assignor confirms that it has and, for greater certainty, to the full extent that it has not done so previously, it does hereby sell, assign, transfer, and set over to the Assignee the entire right, title, and interest in and to the Intellectual Property, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the Inventions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the Trademarks, including the goodwill of the business symbolized by the Trademarks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the Works, including all portions of the Works, all literary, dramatic, musical and/or artistic works embodied in the Works and all portions of the Works, and all copyright in the Works and all portions of the Works and any tangible copies of the Works;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● all patent, design, trademark, copyright, utility model, petty patent or other applications for registration of intellectual property rights that may be filed for the Inventions, the Trademarks or the Works (the "Applications"), including the applications listed in Schedule "A";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● all national phase applications arising from the Applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● all continuations, divisions, renewals of, or substitutes for the Applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the right to file counterparts to the Applications in all countries and regions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●the right to claim priority from the Applications in all countries and regions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● each and every additional application that claims any part of the Inventions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● each and every additional application that is in any way based on or claims priority from or corresponds to the Applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● all patents, design registrations, copyright registrations, trademark registrations, or registrations of other recognized form of intellectual property, including utility models, petty patents, or innovation patents, which may be granted on or as a result thereof (the "IP Registrations"), including the registrations listed in Schedule "A";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● any reissue or reissues of any Applications for patents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● all causes of action and rights to bring suit for past, present, and future infringement of rights in the Inventions, the Trademarks and the Works, including the Applications and the IP Registrations, and all claims for and rights to collect damages, profits, and all other remedies and relief in respect thereof, including other compensation in respect of pre-grant activities; the same to be owned by the Assignee, the Assignee's successors, assigns, nominees, or legal representatives, for the full term or terms of the patents entirely as the same would have been owned by the Assignor, had this Assignment, sale, and transfer not been made.

The Assignor hereby covenants that at the request of the Assignee, the Assignor will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● promptly execute any further proper documents that may be required or expedient to give effect to this Assignment in any country or region; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● exercise the Assignor's rights in relation to the inventor(s) of the Inventions or the author(s) of the Works to secure their cooperation in executing any proper documents that the Assignee may reasonably request for the purpose of securing or enforcing intellectual property protection for the Inventions or the Works in any countries or regions and/or giving effect to this Assignment.

The Assignor hereby covenants that the Assignor has full right to convey the entire interest herein assigned; and has not executed and will not execute any agreement to transfer any rights in the Inventions, the Works, the Applications and/or the IP Registrations to anyone other than the Assignee or that is otherwise in conflict herewith.

The Assignor hereby authorizes and requests any official of any country or countries whose duty it is to issue registered forms of intellectual property protection to issue to the Assignee, the Assignee's successors, assigns, nominees, or legal representatives all IP Registrations based on the Applications in accordance with the terms of this Assignment.

The terms of the Assignment shall enure to the benefit of and be binding upon the parties, their heirs, estates, executors, administrators, legal representatives, successors and assigns.

This Assignment may be executed in counterparts, each of which will be deemed to be an original and all of which will together constitute one instrument. Signatures affixed by electronic means or transmitted by electronic means such as facsimile or email will be deemed to be original signatures and fully binding.

EXECUTED at _______________________________ (place of execution) on ________(date).

---

| | |
|:---|:---|
|  | **STRONG/MDI SCREEN SYSTEMS, INC.**(the Assignor) |
| Witnessed by: |  |
|  | By: |
| Printed Name: | Title: |

---

Date:   Date:  

**STATEMENT OF ACCEPTANCE**

The foregoing Assignment is hereby accepted by the Assignee.

---

| |
|:---|
| **STRONG/MDI SCREEN SYSTEMS, INC.** |
| (the Assignee) |
| By: |
| Title: |
| Date: |

---

**Schedule "A"**

**SCHEDULE C**

**ALLOCATION OF PURCHASE PRICE**

[\*\*\*]

## Exhibit 10.6

**Exhibit 10.6**

**[Pursuant to Item 601(a)(5) of Regulation S-K, schedules and attachments to this exhibit have been omitted. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.]**

**FORM OF ASSET TRANSFER AGREEMENT**

**THIS AGREEMENT** is made as of _________, 2023

**BETWEEN**:

**FG GROUP HOLDINGS, INC.**, company incorporated under the laws of the State of Delaware

(the "**Transferor**")

**AND:**

**STRONG TECHNICAL SERVICES, INC.**, a company incorporated under the laws of the State of Nebraska

(the "**Company**")

**CONTEXT:**

**A.** The
 Transferor, through its wholly owned subsidiary Strong MDI Screen Systems, Inc., a company incorporated under the laws of the Province
 of Quebec ()"**Strong/MDI** "), manufactures premium projection screens and customized screen support systems, for the
 entertainment industry (the "**Strong/MDI Entertainment Business** ").

**B.** The
 Company distributes cinema equipment and provides technical support services to the entertainment industry (the "**STS Entertainment Business** ", and together with the Strong/MDI Entertainment Business, the "**Entertainment Business**") and
 is a wholly owned subsidiary of the Transferor.

**C.** Strong
 Global (as defined below), a wholly owned subsidiary of the Transferor, intends to complete an initial public offering of its Class
 A Common Voting shares ("Class A Shares") and list such Class A Shares on the New York Stock Exchange American (the "**IPO** ").

**D.** In
 connection with the IPO, Strong Global, the Transferor, the Company and other parties as applicable, will enter into certain agreements,
 including the Master Asset Purchase Agreement (the "**Master Asset Purchase Agreement**") between Strong/MDI and Strong/MDI
 Screen Systems, Inc., a company incorporated under the laws of the Province of British Columbia (the "**New Opco** "),
 and this Agreement and certain other agreements (the "**Ancillary Agreements** "), pursuant to which, among other matters,
 effective on the date of completion of the IPO, the Company will become a wholly-owned subsidiary of Strong Global (as defined below).

**E.** The
 Transferor wishes to transfer to the Company, and the Company wishes to acquire, the Transferor's assets listed in Schedule
 A hereto, that are used by Strong/MDI and STS in connection with the Entertainment Business.

**F.** The
 parties intend that the transactions contemplated herein shall constitute a transfer of property in exchange for stock of the Company
 within the meaning of Section 351(a) of the Internal Revenue Code of 1986, as amended (the "**Code** ").

**THEREFORE,** in consideration of the mutual promises set out in this Agreement and other valuable consideration, the Transferor and the Company hereby agree with each other as follows:

**1.** **Definitions and Interpretation** 

1.1 Unless
 otherwise defined herein, all capitalized terms used herein shall have the same meanings as in the Master Asset Purchase Agreement.
 Whenever used in this Agreement, the following capitalized terms shall have the meaning set forth herein:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Affiliate** "
 means when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls,
 is controlled by or is under common control with such specified Person. For the purpose of this definition, "**control** "
 (including, with correlative meanings, "**controlled by**" and "**under common control with** "), when
 used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the
 direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by
 contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or
 otherwise. It is expressly agreed that, prior to, at and after completion of the Separation, for purposes of this Agreement, (a)
 no member of the Strong Entertainment Group shall be deemed to be an Affiliate of any member of the FG Group Holdings Group
 and (b) no member of the FG Group Holdings Group shall be deemed to be an Affiliate of any member of the Strong Entertainment
 Group;

(b) "**Agreement** "
 means this Asset Transfer Agreement, including the Context, all schedules hereto, and all amendments, supplements and restatements
 hereof;

(c) "**FG Group Holdings** **Group**" means
 Transferor and each Person that is a Subsidiary of Transferor (other than the Company and any other member of the Company Group);

(d) "**Business Day**" means any day that is not a Saturday, a Sunday or other day on which Canadian chartered banks are required or authorized
 by law to be closed in Vancouver, British Columbia;

(e) "**Closing Date**" means the date which is the closing date of the IPO;

(f) "**Company** "
 has the meaning ascribed to it on the first page of this Agreement;

(g) "**Company Group**" means (a) prior to the Separation, the Company and each Person that will be a Subsidiary of the Company as of immediately
 after the Separation, even if, prior to the Separation, such Person is not a Subsidiary of the Company; and (b) on and after the
 Separation, the Company and each Person that is a Subsidiary of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Confidential Information**" means information that is of value to a Party, and is not generally known in the industry or to competitors
 of a Party, and includes, but is not limited to, business information, specifications, research, software, trade secrets, discoveries,
 ideas, know-how, designs, drawings, flow chart, data, computer programs, marketing plans, budget figures, and other financial and
 business information, or any such information of clients, parents affiliates, subsidiaries or agents of a party, which is disclosed
 by such party ()"**Disclosing Party**") whether directly in oral or material form to the other party ()"**Receiving Party** "), or indirectly, by permitting the Receiving Party to observe the conduct of the Disclosing Party's various
 operations or processes, but shall not include information that: a) is or becomes publicly available without a breach of this Agreement;
 or b) is already known to the Receiving Party at the time of its disclosure by the Disclosing Party, and is not subject to confidentiality
 restrictions imposed by the Disclosing Party; or c) following its disclosure to the Receiving Party, is received by the Receiving
 Party from a third party without obligation of confidence to the Disclosing Party; or d) is independently developed by the Receiving
 Party without reference to or use of the Disclosing Party's Confidential Information; or e) the Disclosing Party has given
 its prior written approval to disclose;

(i) "**Contract** "
 means any agreement, contract, subcontract, obligation, binding understanding, note, indenture, instrument, option, lease, promise,
 arrangement, release, warranty, license, sublicense, insurance policy, benefit plan, purchase order or legally binding commitment
 or undertaking of any nature (whether written or oral and whether express or implied);

(j) "**Effective Time**" has the meaning ascribed to such term in Section 2.2;

(k) "**Entertainment Business**" has the meaning ascribed to such term in Recital A;

(l) "**Governmental Entity**" means any nation or government, any state, municipality or other political subdivision thereof and any entity,
 body, agency, commission, department, board, bureau or court, whether domestic, foreign, multinational, or supranational exercising
 executive, legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining to government and any
 executive official thereof;

(m) "**Group** "
 means either the Company Group or the FG Group Holdings Group, as the context requires;

(n) "**Indemnifiable Loss**" and "**Indemnifiable Losses**" means any and all damages, losses, deficiencies, Liabilities, obligations,
 penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the costs and expenses of any
 and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys',
 accountants', consultants' and other professionals' fees and expenses incurred in the investigation or defense
 thereof or the enforcement of rights hereunder);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Intellectual Property**" means all U.S. and foreign: (i) trademarks, trade dress, service marks, certification marks, logos, slogans,
 design rights, names, corporate names, trade names, Internet domain names, social media accounts and addresses and other similar
 designations of source or origin, together with the goodwill symbolized by any of the foregoing (collectively, " <u>Trademarks</u> ");
 (ii) patents and patent applications, and any and all related national or international counterparts thereto, including any divisionals,
 continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions thereof (collectively, " <u>Patents</u> ");
 (iii) copyrights and copyrightable subject matter, excluding Know-How; (iv) trade secrets, and all other confidential or proprietary
 information, know-how, inventions, processes, formulae, models, and methodologies, excluding Patents (collectively, " <u>Know-How</u> ");
 (v) all applications and registrations for the foregoing; and (vi) all rights and remedies against past, present, and future infringement,
 misappropriation, or other violation thereof;

(p) "**Law** "
 means any applicable U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance,
 regulation, rule, code, income tax treaty, order, requirement or rule of law (including common law) or other binding directives promulgated,
 issued, entered into or taken by any Governmental Entity;

(q) "**Liability** "
 or "**Liabilities**" means any and all indebtedness, liabilities, costs, expenses, interest and obligations, whether
 accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, reserved or unreserved, or determined or determinable,
 including those arising under any Law, action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation,
 determination or award entered by or with any Governmental Entity and those arising under any Contract or any fines, damages or equitable
 relief which may be imposed and including all costs and expenses related thereto;

(r) "**Person** "
 means any natural person, firm, individual, corporation, business trust, joint venture, association, bank, land trust, trust company,
 company, limited liability company, partnership, or other organization or entity, whether incorporated or unincorporated, or any
 Governmental Entity;

(s) "**Party** "
 or "**Parties**" means Transfer or the Company, individually or collectively, as the case may be;

(t) "**Personal Information**" means information about an individual who can be identified by the person who holds that information;

(u) "**Representatives** "
 means the advisors, agents, consultants, directors, officers, management, employees, subcontractors, and other representatives, including
 accountants, auditors, financial advisors, lenders, and lawyers of the Transferor or the Company, as applicable;

(v) "**Secondary Information**" has the meaning ascribed to such term in Section 9.3;

(w) "**Strong Global**" mean Strong Global Entertainment Inc., a company incorporated under the laws of British Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "**Subsidiary** "
 means with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting or capital stock of which is, as of
 the time in question, directly or indirectly owned by such Person and (ii) any other Person in which such Person, directly or indirectly,
 owns fifty percent (50%) or more of the equity or economic interest thereof or has the power to elect or direct the election of fifty
 percent (50%) or more of the members of the governing body of such entity;

(y) "**Transferor** "
 has the meaning ascribed to it on the first page of this Agreement; and

(z) "**Transferred Assets**" has the meaning ascribed to such term in Section 2.1.

**1.2** **Schedules** 

The following Schedules are incorporated by reference into and form part of this Agreement:

---

| | |
|:---|:---|
| ‎Schedule "A" | Transferred Assets |
| Schedule "B" | Current Asbestos Claims |
| Exhibit "2.3" | Form of Patent Assignment |

---

**1.3** **Headings** 

The division of this Agreement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The Article and Section headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer and shall not be considered part of this Agreement.

**1.4** **Gender and Number** 

Words expressed in the singular include the plural and vice-versa and words in one gender include all genders.

**1.5** **Currency** 

Unless otherwise indicated, all dollar amounts referred to in this Agreement are in Canadian funds.

**1.6** **Statutory References** 

Any reference to a statute shall include and shall be deemed to be a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulation that may be passed which has the effect of supplementing or superseding or re-enacting the statute so referred to or the regulations made pursuant thereto.

**1.7** **Day Not a Business Day** 

In the event that any day on or before which any action is required to be taken hereunder after the Closing Date is not a Business Day, then such action will be required to be taken on or before the requisite time on the next succeeding Business Day.

**1.8** **Construction** 

The words "including" and "includes" where used in this Agreement shall be deemed to mean "including, without limitation" and "includes, without limitation," respectively.

**2.** **Transfer of STS Entertainment Business Assets** 

2.1 The
 Transferor hereby transfers and assigns to the Company, all of its right title and interest in and to the property and assets set
 out in **Schedule A** hereto (collectively, the "**Transferred Assets** "), such transfer to be effective as of
 the Effective Time on the Closing Date on the terms and conditions set out in this Agreement, free and clear of any lien, charge,
 and/or encumbrance of any nature or kind whatever.

2.2 The
 transfer referred to in Section 2.1 above will be effective and will be deemed for all purposes to be effective as at the beginning
 of the day on the Closing Date, immediately after the closing of the transactions contemplated in the Master Asset Purchase Agreement
 (the "**Effective Time** "), and the Company will, immediately thereupon, be the beneficial owner of the Transferred
 Assets.

2.3 The
 Transferor will deliver any documents or instructions reasonably required, including an executed Patent Assignment in the form attached
 to this Agreement as <u>Exhibit 2.3,</u> or other executed agreement(s) in form and substance acceptable to the Company, all with
 a view to effecting the transfer of the Transferred Assets to the Company effective as of the Effective Time on the Closing Date.

2.4 Regardless
 of the date of registration of the transfer of title to any of the Transferred Assets the Company will be entitled to all income
 derived from the Transferred Assets and all proceeds in respect of the Transferred Assets effective as of the Effective Time on the
 Closing Date, and the Transferor will pay and set over to the Company all such income, proceeds, or other amounts, whether received
 by the Transferor or credited to the account of the Transferor. Pending the date of registration of the transfer of title to any
 of the Transferred Assets to the Company or any permits or consents required to carry on the STS Entertainment Business being obtained
 by the Company, the Transferor will, effective as of the Effective Time on the Closing Date, hold registered title in and to such
 Transferred Assets, and carry on the STS Entertainment Business, as required, as nominee, agent, and bare trustee for and on behalf
 of, and as directed by, the Company.

2.5 The
 transactions contemplated by this Agreement are conditional on the IPO being completed not later than December 31, 2023.

**3.** **Assumption of Obligations** 

Effective as of the Effective Time on the Closing Date, the Company will assume, pay when due, perform, and discharge: all expenses, costs, liabilities and obligations accruing or due after the Effective Time on the Closing Date under or with respect to the Transferred Assets, but not any other liabilities or obligations of the Transferor, except as otherwise provided for in this Agreement or specifically agreed to in writing by the Transferor and the Company.

The Company shall have no obligation and will not assume, and Transferor shall retain and timely pay, perform, defend and discharge, any of Transferor's Liabilities that do not constitute Transferred Assets under this Agreement, either disclosed or undisclosed, known or unknown, direct or indirect, absolute or contingent, secured or unsecured, liquidated or unliquidated, accrued or otherwise, including but not limited to (i) any Liabilities in respect of any existing, pending or threatened action or litigation arising out of, relating to or otherwise in respect of the Transferred Assets to the extent such action relates to Transferor's acts of omissions prior to the Closing Date, (ii) any product Liability or similar claim for injury to a person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by Transferor, or by reason of the improper performance or malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects of any products at any time manufactured, distributed and/or sold or any service performed by Transferor, and (iii) any recall, design defect or similar claims of any products manufactured distributed and/or sold or any service performed by Transferor.

**4.** **Indemnity** 

4.1 The
 Company hereby acknowledges and accepts that the consideration given by the Company to the Transferor and the other terms and conditions
 set out in this Agreement take into consideration certain claims and litigation proceedings which have been made or commenced against
 the Transferor (and others) as of the date of this Agreement and are set out in **Schedule B** (the "**Current Asbestos Claims** ").

4.2 The
 Company hereby agrees to indemnify, defend, and hold harmless the Transferor from and against Indemnifiable Losses of the Transferor
 in an aggregate amount not to exceed $250,000 per year (the "**Asbestos Claims Annual Indemnity Cap** "), to the extent
 such Indemnifiable Losses of the Transferor are based upon, related to, or arise out of or in connection with, the Current Asbestos
 Claims, <u>provided however</u> that the Asbestos Claims Annual Indemnity Cap shall not apply to the costs and expenses of attorneys',
 accountants', consultants' and other professionals' fees and expenses incurred by the Transferor in the investigation
 or defense of any Current Asbestos Claims.

4.3 In
 addition, each Party shall indemnify, defend, and hold harmless the other Party from and against any and all Indemnifiable Losses
 of such other Party and its Subsidiaries and Affiliates (each an "**Indemnified Party**" and together the "**Indemnified Parties** "), to the extent based upon, related to, arising out of or otherwise in connection with such Party's breach
 of this Agreement, except to the extent that such Indemnifiable Losses are based upon, related to, result from or arise out of such
 Indemnified Party's (i) breach of this Agreement, (ii) violation of Laws, or (iii) gross negligence, recklessness or willful
 misconduct.

4.4 The
 provisions of <u>Section 4.2</u> and <u>Section 4.3</u> shall, to the maximum extent permitted by applicable Law, be the sole and
 exclusive remedies of the Parties hereto and the Indemnified Parties, as applicable, for any Indemnifiable Losses, whether arising
 from statute, principle of common or civil law, principles of strict liability, tort, contract or otherwise under this Agreement.

**5.** **Taxes** 

5.1 The
 Transferor will pay all taxes relating to the Transferred Assets that arise before, or are related to a period of time before, the
 Closing Date. The Company will pay all taxes relating to the Transferred Assets that arise after the Closing Date. In the case of
 taxes that are payable with respect to a taxable period that begins prior to the Closing Date and ends after the Closing Date (a
 "Straddle Period"), the portion of any such taxes that shall be allocated to the Transferor shall be: (a) in the case
 of taxes (i) based upon, or related to income, receipts, profits, wages, capital, or net worth; (ii) imposed in connection with the
 sale, transfer or assignment of property or (iii) required to be withheld, the amount of taxes which would be payable if the taxable
 year ended on the Closing Date; and (b) in the case of other taxes, the amount of such taxes for the entire period multiplied by
 a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is
 the number of days in the entire period. All taxes with respect to a Straddle Period that are not allocated to the Transferor pursuant
 shall be allocated to the Company.

5.2 The
 Company will be liable for and will pay, when due, all transfer, documentary, sales, use, stamp, registration, value added and other
 such taxes and fees (including any penalties and interest) incurred in connection with the transfer of the Transferred Assets to
 the Company pursuant to this Agreement.

5.3 For
 U.S. federal income tax purposes, the Parties agree to treat the transactions contemplated herein as a tax free contribution under
 Section 351 of the Code and will report their tax returns consistent with that position.

**6.** **Confidential Information** 

---

| | |
|:---|:---|
| 6.1 | Until the Closing Date or, if this Agreement is terminated in accordance with Section 11.1, then perpetually, the Company will, subject to Section 9.2 hereof, keep confidential and not disclose or use, and the Company will not allow any of its Representatives to disclose or use, any Confidential Information, for any purpose, except as contemplated by this Agreement. If this Agreement is terminated, all Confidential Information obtained by the Company in connection with this Agreement, including all copies, whether in written form or stored electronically, will be returned to the Transferor promptly after that termination. |
| 6.2 | The obligation of the Company under Section 9.1 above, to keep confidential and not disclose or use any Confidential Information, does not apply to information that: |
| (a) | is generally available to or known by the public, other than as a result of improper disclosure by the Company or any of its Representatives; |
| (b) | was available to the Company on a non-confidential basis before its disclosure by the Transferor or any Representative of the Transferor; |
| (c) | is or was obtained by the Company from a source other than the Transferor or any Representative of the Transferor, if that source is not bound by a confidentiality agreement with the Transferor; or |
| (d) | the Company or any Representative of the Company is required by law to disclose. |

---

6.3 The
 Transferor and the Company acknowledge that the computers and data storage and retrieval systems or network of the Company and, if
 applicable, its Representatives, may automatically back up Confidential Information stored in electronic form. The Transferor and
 the Company agree that to the extent that those back-up procedures automatically create electronic copies of Confidential Information
 ()"**Secondary Information** "), each of the Company and, if applicable, its Representatives, may, despite any requirement
 under this Agreement to return or destroy Confidential Information, retain Secondary Information in its archival storage for the
 period that it would normally archive electronic data, provided that those data are periodically and systematically overwritten or
 otherwise destroyed. Secondary Information will be subject to the provisions of this Agreement until destroyed and may not be accessed
 by the Company or any of its Representatives during its period of archival storage.

**7.** **Personal Information – Post-Closing** 

Following the Closing, the Company will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) use
 and disclose the Personal Information transferred to it under the terms of this Agreement solely for the purposes for which that
 Personal Information was collected or permitted to be used or disclosed before the transaction was completed;

(b) neither
 use nor disclose any of that Personal Information for any purpose that does not relate directly to the Business; and

(c) notify
 the employees, customers, directors, officers, and shareholders whose Personal Information is disclosed that the transactions contemplated
 by this Agreement have taken place.

**8.** **Representations and Warranties** 

---

| | |
|:---|:---|
| 8.1 | The Transferor represents and warrants to the Company that: |
| (a) | the Transferor has full right, power, and authority to enter into this Agreement and to sell, transfer, assign, and convey the Transferred Assets to the Company free and clear of all liens, charges, and encumbrances; |
| (b) | the Transferor has obtained any consent, authorization or approval, if any, that the Transferor is required to obtain from a third party under any obligation, contractual or otherwise in connection with the execution, delivery, or performance by the Transferor of this Agreement or the completion of any of the transactions contemplated herein; |
| (c) | the Transferor owns possesses, and has good and marketable title to all of the Transferred Assets to be transferred to the Company under this Agreement, free and clear of all liens, charges, and encumbrances (other than liens for current taxes not yet due) and, as of the Closing Date, the Transferor will have the absolute and exclusive right to transfer the Transferred Assets to the Company as contemplated by this Agreement; |
| 8.2 | The Company represents and warrants to the Transferor that: |
| (a) | the Company has full right, power, and authority to enter into this Agreement; |
| (b) | the Company has obtained any consent, authorization or approval, if any, that the Company is required to obtain from a third party under any obligation, contractual or otherwise in connection with the execution, delivery, or performance by the Company of this Agreement or the completion of any of the transactions contemplated herein; |

---

8.3 The
 representations and warranties of the Transferor and the Company set out in this Agreement, and all covenants of the Transferor and
 the Company set out in this Agreement will survive the completion of the transfer of the Transferred Assets provided for in this
 Agreement and, notwithstanding such completion, will continue in full force and effect for the benefit of the Company or the Transferor,
 as the case may be, in accordance with the terms thereof.

**9.** **General Contract Provisions** 

9.1 This
 Agreement may be terminated at any time before the Effective Time by mutual written consent of the Transferor and the Company.

9.2 From
 time to time, the Company and the Transferor will each execute and deliver all such further documents, certificates, deeds, conveyances,
 transfers, assignments, declarations, affidavits, and other documents necessary or desirable to give effect to the full intent of
 this Agreement, including the transfer of the Transferred Assets.

9.3 This
 Agreement will enure to the benefit of, and be binding upon, the respective successors and permitted assigns of the Transferor and
 the Company.

9.4 Whenever
 the singular or masculine is used in this Agreement, it will be construed as meaning the plural or the feminine or neuter, and vice
 versa, where the context or the parties so require.

9.5 The
 term "**Agreement**" means the agreement between the Transferor and the Company evidenced by this document, as amended
 from time to time, together with the Schedules.

9.6 This
 Agreement, including the schedules, and the Master Asset Purchase Agreement and the Ancillary Agreements shall constitute the entire
 agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments,
 course of dealings and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and
 any schedule hereto, the schedule shall prevail.

9.7 No
 amendment or other modification of this Agreement or any schedule hereto shall be effective unless in a writing signed and delivered
 by both Parties hereto. Any consent or waiver required or permitted to be given by any Party to the other Party under this Agreement
 shall be in writing and signed by the Party giving such consent or waiver and shall be effective only against such Party (and its
 Group).

9.8 This
 Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party hereto without the prior written consent
 of the other Party (not to be unreasonably withheld or delayed), and any attempt to assign any rights or obligations arising under
 this Agreement without such consent shall be void.

9.9 This
 Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, Liability,
 reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

9.10 This
 Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in
 accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

9.11 EACH
 OF THE PARTIES HERETO, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL BY JURY IN RESPECT
 OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES HERETO CERTIFIES AND ACKNOWLEDGES
 THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY TO THIS AGREEMENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
 PARTY TO THIS AGREEMENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH OF THE PARTIES HERETO
 UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH OF THE PARTIES HERETO MAKES THIS WAIVER VOLUNTARILY AND
 (IV) EACH OF PARTIES HERETO HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
 IN THIS <u>SECTION 12.11.</u> 

9.12 In
 the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect,
 the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected
 or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions
 with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

9.13 No
 failure or delay on the part of either party in exercising any right, power or privilege under this Agreement will operate as a waiver
 thereof, nor will any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof
 or the exercise of any other right, power or privilege. Except as may be limited herein, either party may, in its sole discretion,
 exercise any and all rights, powers, remedies and recourses available to it under this Agreement or any other remedy available to
 it and such rights, powers, remedies and recourses may be exercised concurrently or individually without the necessity of making
 any election.

9.14 This
 Agreement may be executed in any number of counterparts, each of which when executed and delivered is an original and all of which
 taken together constitute one and the same instrument.

9.15 This
 Agreement and each counterpart may be created, executed, signed, retained, or otherwise dealt with in digital or other intangible
 form of any format (including PDF), and may be delivered, transmitted, or otherwise dealt with by any digital or other intangible
 means (including by email, facsimile, or otherwise). Each digital or other intangible form of this Agreement or counterpart, and
 each copy and printout thereof, is hereby declared and agreed to be as valid and effective as a manually signed document.

**[*signature page follows*]**

**BY SIGNING BELOW** the Transferor and the Company each confirms that this document sets out the agreement reached by them and each of them acknowledges its intention to be bound by this contract.

---

| |
|:---|
| **FG GROUP HOLDINGS, INC.** |
| By: |
| Name: |
| Title: |

---

---

| |
|:---|
| **STRONG TECHNICAL SERVICES, INC.** |
| By: |
| Name: |
| Title: |

---

[*Signature Page FG Group Holdings Asset Transfer Agreement*]

**SCHEDULE A**

**TRANSFERRED ASSETS**

[\*\*\*]

**SCHEDULE B**

**CURRENT ASBESTOS CLAIMS**

[\*\*\*]

**EXHIBIT 2.3**

**<u>FORM OF PATENT ASSIGNMENT</u>**

**<u> </u>**

[\*\*\*]

## Exhibit 10.7

**EXHIBIT 10.7**

**<u>FORM OF PATENT ASSIGNMENT</u>**

This Patent Assignment (the "**<u>Patent Assignment</u>**") is effective as of ______, 2023 (the "**<u>Effective Date</u>**") by and between FG Group Holdings, Inc., a Delaware corporation with a place of business at 5960 Fairview Road, Suite 275, Charlotte, North Carolina, 28210 ("**<u>Assignor</u>**<u>"</u>), and Strong Technical Services, Inc., a Nebraska corporation with a place of business at 14565 Portal Cir, La Vista, NE 68138 ("**<u>Assignee</u>**").

**WHEREAS**, under the terms of that certain Asset Transfer Agreement dated as of the Effective Date hereof by and between Assignor and Assignee (the "**<u>FG Group Holdings</u> <u>Asset Transfer Agreement</u>**"), Assignor has conveyed, transferred, assigned, and delivered to Assignee, among other assets, certain intellectual property assets of Assignor, and has agreed to execute and deliver this Patent Assignment, for the purpose of recording the assignment with the United States Patent and Trademark Office and the corresponding patent offices, entities or agencies in any applicable jurisdiction (including any applicable foreign country).

**NOW, THEREFORE**, in accordance with the FG Group Holdings Asset Transfer Agreement and in consideration of the promises and covenants contained herein and therein, the parties agree as follows:

1. <u>Assignment</u>. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor confirms that Assignor has irrevocably conveyed, transferred, assigned, and delivered to Assignee and, for greater certainty, to the full extent that Assignor has not done so previously, Assignor does hereby irrevocably convey, transfer, assign, and deliver to Assignee all of Assignor's right, title, and interest in and to the following (the "**<u>Transferred Patent Assets</u>**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) certain inventions, improvements and discoveries

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. directed to pre-painted panels for use in a modular curvilinear projection screen system; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. described and/or claimed in the patent documents set forth in Schedule 1 (the "Applications")

(the "Inventions");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all national phase applications arising from the Applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) all issuances, divisions, continuations, continuations-in-part, reissues, extensions, reexaminations, and renewals of the Applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the right to file counterparts to the Applications in all countries and regions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the right to claim priority from the Applications in all countries and regions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) each and every additional application that claims any part of the Inventions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) each and every additional application that is in any way based on or claimed priority from or corresponds to the Applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) all rights of Assignor accruing under any of the foregoing provided by applicable law of any jurisdiction, by international treaties and conventions, and otherwise throughout the world;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any and all royalties, fees, income, payments, and other proceeds now or hereafter due or payable with respect to any and all of the foregoing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any and all claims and causes of action based on any of the foregoing, whether accruing before, on, or after the date hereof, including all rights to and claims for damages, restitution, and injunctive and other legal and equitable relief for past, present, and future infringement, misappropriation, violation, misuse, breach, or default, with the right but no obligation to sue for such legal and equitable relief and to collect, or otherwise recover, any such damages.

2. <u>Recordation and Further Actions</u>. Assignor hereby authorizes the Commissioner for Patents in the United States Patent and Trademark Office and the officials of corresponding patent offices, entities or agencies in any applicable jurisdiction (including any applicable foreign country) to record and register this Patent Assignment upon request by Assignee. Following the date hereof, upon Assignee's reasonable request, Assignor shall take such reasonable steps and actions, and provide such reasonable cooperation and assistance to Assignee and its successors, assigns, and legal representatives, including the execution and delivery of any affidavits, declarations, oaths, exhibits, assignments, powers of attorney, or other documents, as may be reasonably necessary to effect, evidence, or perfect the assignment of the Transferred Patent Assets to Assignee, or any assignee or successor thereto.

3. <u>Terms of the Asset Transfer Agreement</u>. The parties hereto acknowledge and agree that this Patent Assignment is entered into pursuant to the Asset Transfer Agreement, to which reference is made for a further statement of the rights and obligations of Assignor and Assignee with respect to the Transferred Patent Assets. The representations, warranties, covenants, agreements, and indemnities contained in the Asset Transfer Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between the terms of the Asset Transfer Agreement and the terms hereof, the terms of the Asset Transfer Agreement shall govern.

4. <u>Successors and Assigns</u>. This Assignment shall be binding and inure to the benefit of the Assignee and Assignor and their respective successors and assigns.

5. <u>Counterparts.</u> This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same.

[*Signature page follows*]

**IN WITNESS WHEREOF**, the undersigned have caused this Assignment to be duly executed as of the Effective Date.

**ASSIGNOR:** 

---

| |
|:---|
| **FG GROUP HOLDINGS, INC.** |
| By: |
| Name: |
| Title: |
| **Assignor Witness** |
| By: |
| Name: |
| **ASSIGNEE:** |
| **STRONG TECHNICAL SERVICES, INC.** |
| By: |
| Name: |
| Title: |

---

[*Signature Page Patent Assignment*]

## Exhibit 10.8

**Exhibit 10.8**

**[Pursuant to Item 601(a)(5) of Regulation S-K, schedules and attachments to this exhibit have been omitted. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.]**

**MANAGEMENT SERVICES AGREEMENT**

**by and between**

**FG GROUP HOLDINGS, INC.**

**and**

**STRONG GLOBAL ENTERTAINMENT, INC.**

**Dated as of [ ], 2023** 

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **ARTICLE I** | **DEFINITIONS** | 2 |
| Section 1.01 | Certain Defined Terms | 2 |
| Section 1.02 | Interpretation; Schedules | 7 |
| **ARTICLE II** | **SERVICES, FACILITIES AND DURATION** | 7 |
| Section 2.01 | Services; Facilities | 7 |
| Section 2.02 | Compliance with Laws | 7 |
| Section 2.03 | Duration of Services and Facilities | 7 |
| Section 2.04 | Additional Services and Additional Facilities | 8 |
| Section 2.05 | Exception to Obligation to Provide Services or Facilities | 8 |
| Section 2.06 | Standard of the Provision of Services or Facilities | 8 |
| Section 2.07 | Change in Services or Facilities | 9 |
| Section 2.08 | Subcontractors | 10 |
| Section 2.09 | Electronic Access | 10 |
| Section 2.10 | Telecommunications Matters | 11 |
| Section 2.11 | Intellectual Property License | 11 |
| Section 2.12 | Shared Contracts | 11 |
| **ARTICLE III** | **COSTS AND DISBURSEMENTS** | 12 |
| Section 3.01 | Costs and Disbursements | 12 |
| Section 3.02 | No Right to Set-Off | 13 |
| Section 3.03 | Taxes | 13 |
| Section 3.04 | Records and Audits | 14 |
| Section 3.05 | Uses of Services | 15 |
| Section 3.06 | Provision of Services | 15 |
| **ARTICLE IV** | **WARRANTIES AND COMPLIANCE** | 15 |
| Section 4.01 | Disclaimer of Warranties | 15 |
| Section 4.02 | Compliance with Laws and Regulations | 16 |
| **ARTICLE V** | **LIABILITY AND INDEMNIFICATION** | 16 |
| Section 5.01 | Limitation of Liability | 16 |
| Section 5.02 | Indemnification | 17 |
| Section 5.03 | Indemnification Procedures | 17 |
| Section 5.04 | Cooperation in Defense and Settlement | 20 |
| Section 5.05 | Indemnification Payments | 20 |
| Section 5.06 | Contribution | 20 |

---

i

---

| | | |
|:---|:---|:---|
| **ARTICLE VI** | **TERMINATION** | 21.0 |
| Section 6.01 | Termination | 21.0 |
| Section 6.02 | Effect of Termination | 22.0 |
| Section 6.03 | Force Majeure | 22.0 |
| **ARTICLE VII** | **MANAGEMENT AND CONTROL** | 23.0 |
| Section 7.01 | Cooperation | 23.0 |
| Section 7.02 | Required Consents, Licenses or Approvals | 23.0 |
| Section 7.03 | Personnel | 23.0 |
| Section 7.04 | No Agency | 23.0 |
| **ARTICLE VIII** | **MISCELLANEOUS** | 24.0 |
| Section 8.01 | Treatment of Confidential Information | 24.0 |
| Section 8.02 | Entire Agreement; Construction | 25.0 |
| Section 8.03 | Counterparts | 25.0 |
| Section 8.04 | Notices | 26.0 |
| Section 8.05 | Amendments; Consents; Waivers | 26.0 |
| Section 8.06 | Assignment | 26.0 |
| Section 8.07 | Successors and Assigns | 27.0 |
| Section 8.08 | Payment Terms | 27.0 |
| Section 8.09 | Affiliates | 27.0 |
| Section 8.10 | Third Party Beneficiaries | 27.0 |
| Section 8.11 | Title and Headings | 27.0 |
| Section 8.12 | Schedules | 27.0 |
| Section 8.13 | Governing Law | 27.0 |
| Section 8.14 | Dispute Resolution | 28.0 |
| Section 8.15 | Severability | 31.0 |
| Section 8.16 | Interpretation | 32.0 |
| Section 8.17 | No Waiver | 32.0 |

---

ii

**MANAGEMENT SERVICES AGREEMENT**

This MANAGEMENT SERVICES AGREEMENT (this "**<u>Agreement</u>**"), dated as of [ ], 2023, by and between FG Group Holdings, Inc., a Delaware corporation ("**<u>FG Group Holdings</u>**") and Strong Global Entertainment, Inc., a company incorporated under the laws of the *Business Corporations Act* (British Columbia) ("**<u>Strong Global</u>**") is made effective as of the date of completion of the separation transaction to be effected pursuant to: (i) the Asset Transfer Agreement (the "**<u>Master Asset Purchase Agreement</u>**") between Strong/MDI Screen Systems, Inc., a company incorporated under the laws of the Province of Quebec ("**Strong/MDI Quebec**") and Strong/MDI Screen Systems, Inc., a company incorporated under the laws of the Province of British Columbia (the "**<u>New Opco</u>**"), and (ii) the other related ancillary agreements thereto, including the Asset Transfer Agreement (the '**<u>FG Group Holdings</u> <u>Asset Transfer Agreement</u>**"), between FG Group Holdings and Strong Technical Services, Inc. ("**<u>STS</u>**"), a Nebraska corporation (the FG Group Holdings Asset Transfer Agreement together with the other related ancillary agreements to the Master Asset Purchase Agreement, the "**<u>Ancillary Agreements</u>**") (and such date, the "**<u>Effective Date</u>**"), is entered into by and between FG Group Holdings and Strong Global. "**<u>Party</u>**" or "**<u>Parties</u>**" means FG Group Holdings or Strong Global, individually or collectively, as the case may be.

W I T N E S E T H:

WHEREAS, the board of directors of FG Group Holdings have determined that it is in the best interests of FG Group Holdings and its stockholders to create a new publicly traded company that shall operate, directly and indirectly, the Business (as defined below), pursuant to the separation transaction referenced above (the "**<u>Separation</u>**");

WHEREAS, in order to effectuate the Separation, FG Group Holdings, Strong Global, Strong/MDI Quebec, New Opco, and/or STS are entering into, the Master Asset Purchase Agreement and/or the Ancillary Agreements, as the case may be;

WHEREAS, in order to operate the Business, New OpCo will require certain services which are to be performed by Strong Global, and Strong Global has agreed to provide such services pursuant to a Services Agreement (the "**<u>Canadian Services Agreement</u>**") between New OpCo and Strong Global, such Canadian Services Agreement being one of the Ancillary Agreements referred to above;

WHEREAS, in connection with the Separation, certain services are to continue to be provided by each Party to the other Party after the Effective Date upon the terms and conditions set forth in this Agreement;

WHEREAS, the Parties acknowledge that this Agreement, the Master Asset Purchase Agreement and the Ancillary Agreements represent the integrated agreement of the Parties, and their respective Affiliates, relating to the Separation, are being entered together, and would not have been entered independently.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:

**ARTICLE I**

**<u>DEFINITIONS</u>**

Section 1.01 <u>Certain Defined Terms</u>.

(a) Unless otherwise defined herein, all capitalized terms used herein shall have the same meanings as in the Master Asset Purchase Agreement.

(b) The following capitalized terms used in this Agreement shall have the meanings set forth below:

1) "<u>Affiliate</u>" means when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, "<u>control</u>" (including, with correlative meanings, "<u>controlled by</u>" and "<u>under common control with</u>"), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, prior to, at and after completion of the Separation, for purposes of this Agreement, (a) no member of the Strong Global Group shall be deemed to be an Affiliate of any member of the FG Group Holdings Group and (b) no member of the FG Group Holdings Group shall be deemed to be an Affiliate of any member of the Strong Global Group, <u>provided however</u> that nothing herein shall limit any Party from claiming, disclosing and/or treating the other Party as an Affiliate for Canadian and/or U.S. tax purposes (upon the knowledge and consent of the other Party).

2) "<u>Applicable Federal Rate</u>" means the minimum interest rate that the U.S. Internal Revenue Service (IRS) allows for private loans, as published on a monthly basis by the IRS in accordance with Section 1274(d) of the Internal Revenue Code.

3) "<u>FG Group Holdings Group</u>" means FG Group Holdings and each Person that is a Subsidiary of FG Group Holdings (other than Strong Global and any other member of the Strong Global Group).

4) <u>FG Group Holdings</u> <u>Provider</u>" means FG Group Holdings or a Provider that is a member of the FG Group Holdings Group.

5) "<u>Business</u>" means the entertainment business of FG Group Holdings, as conducted before completion of the Separation, as the context requires, and/or the business of Strong/MDI Quebec and STS, operating under FG Group Holdings before completion of the Separation, and/or the direct or indirect business of Strong Global as conducted after completion of the Separation, as the context requires, as applicable.

6) "<u>Change of Control</u>" means with respect to a Party, the occurrence after the Effective Date of any of the following: (a) the sale, conveyance or disposition, in one or a series of related transactions, of all or substantially all of the assets of such Party to a third party that is not an Affiliate of such Party prior to such transaction or the first of such related transactions; (b) the consolidation, merger or other business combination of a Party with or into any other Person, immediately following which the stockholders of the Party prior to such transaction fail to own in the aggregate the Majority Voting Power of the surviving Party in such consolidation, merger or business combination or of its ultimate publicly traded parent Person; or (c) a transaction or series of transactions in which any Person or "<u>group</u>" (as such term is used in <u>Section 13(d</u>) of the Exchange Act) acquires the Majority Voting Power of such Party (other than in a reincorporation or similar corporate transaction in which each of such Party's stockholders own, immediately thereafter, interests in the new parent company in substantially the same percentage as such stockholder owned in such Party immediately prior to such transaction).

7) "<u>Confidential Information</u>" means all non-public, confidential or proprietary Information to the extent concerning a Party, its Group and/or its Subsidiaries or with respect to Strong Global, the Strong Global Business, any Strong Global assets or any Strong Global Liabilities or with respect to FG Group Holdings, the FG Group Holdings Business, any FG Group Holdings assets or any FG Group Holdings Liabilities, including any such Information that was acquired by any Party after the Effective Date in accordance with this Agreement, or that was provided to a Party by a third party in confidence, including (a) any and all technical information relating to the design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacture of any Party's product or service (including product specifications, documentation, engineering, and design; software, software as a service, firmware, computer programs and applications (including source code, executable or object code, architecture, algorithms, data files, computerized databases, plugins, libraries, subroutines, tools and APIs), programming data, databases, user manuals and training materials, and all information and documentation referred to in the same and supporting the foregoing); product or service costs, margins and pricing; as well as product or service marketing studies and strategies; all other methodologies, procedures, techniques and Know-How related to design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacturing; (b) information, documents and materials relating to the Party's financial condition, management and other business conditions, prospects, plans, procedures, infrastructure, security, information technology procedures and systems, and other business or operational affairs; (c) pending unpublished patent applications and trade secrets; and (d) any other data or documentation resident, existing or otherwise provided in a database or in a storage medium, permanent or temporary, intended for confidential, proprietary and/or privileged use by a Party; except for any Information that is (i) in the public domain or known to the public through no fault of the receiving Party or its Subsidiaries, (ii) lawfully acquired after the Effective Date by such Party or its Subsidiaries from other sources not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the receiving Party after the Effective Time without reference to any Confidential Information. As used herein, by example and without limitation, Confidential Information shall mean any information of a Party intended or marked as confidential, proprietary and/or privileged.

8) "<u>Contract</u>" means any agreement, contract, subcontract, obligation, binding understanding, note, indenture, instrument, option, lease, promise, arrangement, release, warranty, license, sublicense, insurance policy, benefit plan, purchase order or legally binding commitment or undertaking of any nature (whether written or oral and whether express or implied).

9) "<u>Exchange Act</u>" means the United States Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

10) "<u>Facilities</u>" means those facilities, equipment and software, as applicable, (including any Additional Facilities) to be provided by each Party and its Group as identified on the schedules attached hereto as such schedules may be amended from time to time.

11) "<u>Force Majeure</u>" means with respect to a Party, an event beyond the reasonable control of such Party (or beyond the reasonable control of any Person acting on its behalf), including strikes, lockouts, acts of any government, embargo, acts of God, storms, floods, tsunami, riots, fires, sabotage, pandemics (including the novel coronavirus disease ("**<u>COVID-19</u>**")), outbreaks of infectious disease or other public health crises, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities or other national or international calamity or one or more acts of terrorism or failure or interruption of networks or energy sources.

12) "<u>Governmental Entity</u>" means any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic, foreign, multinational, or supranational exercising executive, legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining to government and any executive official thereof.

13) "<u>Group</u>" means either the Strong Global Group or the FG Group Holdings Group, as the context requires.

14) "<u>Indemnifiable Loss</u>" and "<u>Indemnifiable Losses</u>" means any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the costs and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys', accountants', consultants' and other professionals' fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder).

15) "<u>Information</u>" means information, content, and data in written, oral, electronic, computerized, digital or other tangible or intangible media, including (i) books and records, whether accounting, legal or otherwise, ledgers, studies, reports, surveys, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, marketing plans, customer names and information (including prospects); technical information relating to the design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacture of any Party's or its Group's product or service (including product specifications, documentation, engineering, and design; software, software as a service, firmware, computer programs and applications (including source code, executable or object code, architecture, algorithms, data files, computerized databases, plugins, libraries, subroutines, tools and APIs), programming data, databases, user manuals and training materials, and all information and documentation referred to in the same and supporting the foregoing); product or service costs, margins and pricing; as well as product or service marketing studies and strategies; all other methodologies, procedures, techniques and Know-How related to design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacturing; communications, correspondence, materials, product or service literature, files, documents; and (ii) financial and business information, including earnings reports and forecasts, macro-economic reports and forecasts, all cost information (including supplier records and lists), sales and pricing data, business plans, market evaluations, surveys, credit-related information, and other such information as may be needed for reasonable compliance with reporting, disclosure, filing or other requirements, including under applicable securities laws or regulations of securities exchanges.

16) "<u>Intellectual Property</u>" means all U.S. and foreign: (i) trademarks, trade dress, service marks, certification marks, logos, slogans, design rights, names, corporate names, trade names, Internet domain names, social media accounts and addresses and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (collectively, "**<u>Trademarks</u>**"); (ii) patents and patent applications, and any and all related national or international counterparts thereto, including any divisionals, continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions thereof (collectively, "**<u>Patents</u>**"); (iii) copyrights and copyrightable subject matter, excluding Know-How; (iv) trade secrets, and all other confidential or proprietary information, know-how, inventions, processes, formulae, models, and methodologies, excluding Patents (collectively, "**<u>Know-How</u>**"); (v) all applications and registrations for the foregoing; and (vi) all rights and remedies against past, present, and future infringement, misappropriation, or other violation thereof.

17) "<u>Internal Revenue Code</u>" means the U.S. Internal Revenue Code of 1986, as amended;

18) "<u>IT Assets</u>" means all software, computer systems, telecommunications equipment, databases, Internet Protocol addresses, data rights and documentation, reference, resource and training materials relating thereto, and all Contracts (including Contract rights) relating to any of the foregoing (including software license agreements, source code escrow agreements, support and maintenance agreements, electronic database access contracts, domain name registration agreements, website hosting agreements, software or website development agreements, outsourcing agreements, service provider agreements, interconnection agreements, governmental permits, radio licenses and telecommunications agreements).

19) "<u>Law</u>" means any applicable U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, income tax treaty, order, requirement or rule of law (including common law) or other binding directives promulgated, issued, entered into or taken by any Governmental Entity.

20) "<u>Liability</u>" or "<u>Liabilities</u>" means any and all indebtedness, liabilities, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity and those arising under any Contract or any fines, damages or equitable relief which may be imposed and including all costs and expenses related thereto.

21) "<u>Majority Voting Power</u>" means a majority of the voting power in the election of directors of all outstanding voting securities of the Person in question.

22) "<u>Person</u>" means any natural person, firm, individual, corporation, business trust, joint venture, association, bank, land trust, trust company, company, limited liability company, partnership, or other organization or entity, whether incorporated or unincorporated, or any Governmental Entity.

23) "<u>Provider</u>" means the applicable Person of a Group providing a Service, an Additional Service, Facility or Additional Facilities under this Agreement.

24) "<u>Provider Systems</u>" means with respect to each Service, the Information, IT Assets or Intellectual Property owned or controlled by Provider or any of its Affiliates that is required for Recipient's use of the Services.

25) "<u>Recipient</u>" means the applicable Person of a Group to whom a Service, an Additional Service, Facility or Additional Facilities is being provided under this Agreement.

26) "<u>Recipient Systems</u>" means with respect to each Service, the Information, IT Assets or Intellectual Property owned or controlled by Recipient or any of its Affiliates that is required for Provider's use of the Services.

27) "<u>Service or Services</u>" means those services (including any Additional Services) to be provided the Parties and their respective Groups as identified on the schedules attached hereto as such schedules may be amended from time to time.

28) "<u>Strong Global Group</u>" means (a) prior to the Separation, Strong Global and each Person that will be a Subsidiary of Strong Global as of immediately after the Separation, even if, prior to the Separation, such Person is not a Subsidiary of Strong Global; and (b) on and after the Separation, Strong Global and each Person that is a Subsidiary of Strong Global.

29) "<u>Strong Global Provider</u>" means Strong Global or a Provider that is a member of the Strong Global Group.

30) "<u>Subsidiary</u>" means with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting or capital stock of which is, as of the time in question, directly or indirectly owned by such Person and (ii) any other Person in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity or economic interest thereof or has the power to elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity.

31) "<u>Tax Act</u>" means the *Income Tax Act* (Canada).

Section 1.02 <u>Interpretation; Schedules</u>. In this Agreement: (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms "hereof," "herein," and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the schedules hereto) and not to any particular provision of this Agreement; (c) article, section and schedule references are to the articles, sections and schedules to this Agreement unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless otherwise specified; (f) the word "or" shall not be exclusive; (g) unless otherwise specified in a particular case, the word "days" refers to calendar days; (h) references to "business day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by law to close in the United States or New York, New York; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement, all references to "the date hereof," "the date of this Agreement," "hereby" and "hereupon" and words of similar import shall all be references to [ ], 2023.

**ARTICLE II**

**<u>SERVICES, FACILITIES AND DURATION</u>**

Section 2.01 <u>Services; Facilities</u>. Subject to and in accordance with the terms and conditions of this Agreement, from and after the Effective Date each Group, with such Group's applicable Persons, each as Providers, shall provide (or cause to be provided) to the other Group, with such Group's applicable Person, each as Recipients, its respective Services and Facilities, as applicable, as set forth on the schedules to this Agreement.

Section 2.02 <u>Compliance with Laws</u>. Each Party agrees to comply, and to cause its Group to comply, with all Laws applicable to the provision, receipt or use of the Services and Facilities.

Section 2.03 <u>Duration of Services and Facilities</u>. Subject to <u>Section 6.01</u> hereof, each Provider shall provide or cause to be provided to the respective Recipient each Service or Facility until the expiration of the period set forth next to such Service or Facility on the applicable schedules hereto or, if no such period is provided with respect to a particular Service or Facility, on the second anniversary of the Effective Date (in each case, the "**<u>Term</u>**"); <u>provided</u>, <u>however</u>, to the extent that a Provider's ability to provide a Service or Facility, as the case may be, is dependent on the Recipient's provision of data, Services, Facilities or other resources, the Provider's obligation to provide, or cause to be provided, such Service or Facility shall be suspended until such time as the dependencies are met or provided. Additionally, upon the expiration of any Term, such Term will renew automatically, for successive periods of one year's duration, unless such other renewal time period is set forth on the applicable schedules hereto. During any renewal of the Term, the terms, conditions and provisions set forth in this Agreement shall remain in effect unless modified in accordance with this Agreement.

Section 2.04 <u>Additional Services and Additional Facilities</u>. If, within six (6) months after the Effective Date, either Party identifies a service or facilities, equipment or software not included on a schedule which was provided by a Provider during the twelve-month period prior to the Effective Date that a Recipient reasonably needs in order for its Business to continue to operate in substantially the same manner in which the Business operated prior to the Effective Date, then each Party shall use commercially reasonable efforts to provide, or cause to be provided (on terms to be agreed upon), such requested services (such additional services, the "**<u>Additional Services</u>**") and/or facilities, equipment or software (the "**<u>Additional Facilities</u>**"). The Parties shall amend, in a writing signed by both Parties, the appropriate schedule to include such Additional Services or Additional Facilities (including the terms thereof and the termination date with respect thereto, which, for clarity, shall be no later than the end of the Term) and such Additional Services and Additional Facilities shall be deemed Services or Facilities, as applicable. Accordingly, the Provider requested to provide such Additional Services or Additional Facilities shall provide, or cause to be provided, such Additional Services or Additional Facilities in accordance with the terms and conditions of this Agreement.

Section 2.05 <u>Exception to Obligation to Provide Services or Facilities</u>. Notwithstanding anything in this Agreement to the contrary, no Provider shall be obligated to provide any Services or Facilities if the provision of such Services or Facilities would violate any Law or any currently existing Contract to which the Provider or its Group are subject; <u>provided</u>, <u>however</u>, that each Party shall comply with <u>Section 7.02</u> in obtaining any consents, licenses or approvals necessary to provide such Services or Facilities.

Section 2.06 <u>Standard of the Provision of Services or Facilities</u>.

(a) The
 provision of Services and Facilities shall be provided in a commercially reasonable manner with the nature, quality, standard of
 care and at levels substantially consistent with the levels at which the same or similar services or access were provided by the
 applicable Provider during the twelve-month period immediately preceding the Effective Date. Subject to the applicable policies of
 any Person in the Group, or any contractual restrictions in any Contract applicable to any Person in the Group, nothing herein shall
 in any way preclude a Provider, any of its Affiliates, or any Person in its respective Group, from engaging in any business activities
 or from performing services for its or their own account or for the account of others, including, without limitation, companies which
 may be in competition with the business conducted by a Recipient, any Person in its respective Group or any of its Affiliates

(b) Each
 Recipient acknowledges that the applicable Provider is not in the business of providing the Services and is providing the Services
 to such Recipient solely for the purpose of facilitating the transactions contemplated by the Master Asset Purchase Agreement and
 the Ancillary Agreements and the on-going operation of the Business following the completion of the Separation. Each Provider shall
 act under this Agreement solely as an independent contractor and not as an agent, employee or joint venture counterparty of any Recipient.
 All employees and representatives providing the Services shall be under the direction, control and supervision of the applicable
 Provider (and not of any Recipient), and such Provider shall have the sole right to exercise all authority with respect to such employees
 and representatives and in no event shall such employees and representatives be deemed to be employees or agents of any Recipient.

Section 2.07 <u>Change in Services or Facilities</u>.

(a) The
 Provider may from time to time reasonably supplement, modify, substitute or otherwise alter the Services and Facilities provided
 in a manner that does not materially adversely affect the quality or availability of Services or Facilities or increase the Service
 Charges (as defined in <u>Section 3.01</u>) to the Recipient of such Services or Facilities. Subject to <u>Section 2.07(b)</u> and <u>Section 2.07(c)</u>, if any such change by the Provider reasonably requires the Recipient to incur an increase in costs and expenses,
 to continue to receive and utilize the applicable Services or Facilities, the Provider shall be required to reimburse the Recipient
 for all such reasonable increases in costs and expenses; <u>provided</u>, <u>however,</u> that the Provider and the Recipient will
 work together in good faith and make such changes as may be reasonably necessary to minimize any such increased costs and expenses.
 Upon request, the Recipient shall provide the Provider with reasonable documentation, to the extent such documentation is in the
 Recipient's possession or control, to support the calculation of such increase in costs and expenses.

(b) If
 a change in Laws applicable to the Provider or the Recipient requires the Provider to make a change to the Services or Facilities
 or reasonably to incur additional costs and expenses in connection with providing such Services or Facilities, the Provider shall
 advise the Recipient as soon as reasonably practicable of such additional costs and expenses. Upon request, the Provider shall provide
 the Recipient with reasonable documentation, to the extent such documentation is in the Provider's possession or control, to
 support the calculation of such additional costs and expenses. The Provider and Recipient will work together in good faith and make
 such changes as reasonably necessary to minimize any such additional costs and expenses. Subject to the foregoing, the Recipient
 shall be responsible for any and all such reasonably-incurred additional costs and expenses.

(c) If
 the Provider is required to (i) increase staffing, (ii) acquire, lease or license additional facilities, equipment or software, (iii)
 engage in significant capital expenditures or (iv) apply for or obtain additional third party consents, licenses or approvals (other
 than renewals of any preexisting permits, licenses or approvals) (clauses (i) to (iv), collectively, the "  **<u>Service Changes</u>** ")
 in order to accommodate the use or level of any Service or Facilities by the Recipient, then the Provider shall inform the Recipient
 in writing of the Service Change and propose a plan for implementing the Service Change, in all cases to the extent practicable,
 before incurring any costs or expenses resulting from such Service Change. The Parties shall negotiate in good faith and mutually
 agree to adjust or change the Services and/or Facilities, including the Service Charges, if necessary, before the Provider is required
 to undertake any Service Change. If the Parties determine that the Provider shall undertake such Service Change, then the Parties
 shall amend the appropriate schedule in writing to include such Service Changes, and the Service Changes shall be deemed Services
 or Facilities hereunder. Accordingly, the Party requested to provide such Services or Facilities as amended by the Service Changes
 shall provide such Services, or cause such Services to be provided, in accordance with the terms and conditions of this Agreement
 at the agreed upon cost.

(d) A
 Recipient may from time to time request a reduction in part of the scope or amount of any Service or Facility. If requested to do
 so by the Recipient, the Provider agrees to negotiate in good faith appropriate reductions to the relevant Service Charges in light
 of all relevant factors including the costs and benefits to the Provider of any such reductions. The relevant schedule shall be updated
 to reflect any reduced Service or Facility agreed to in writing by the Parties. In the event that any Service or Facility is so reduced
 other than at the end of a month, the Service Charge associated with such Service or Facility for the month in which such Service
 or Facility is reduced shall be pro-rated accordingly.

Section 2.08 <u>Subcontractors</u>. A Provider may subcontract any of the Services or portion thereof to any other Person, including any Affiliate of the Provider; <u>provided</u>, <u>however</u>, that such other Person shall be subject to service standards and confidentiality provisions reasonably equivalent to those set forth herein, and such Provider shall in all cases remain primarily responsible for all of its obligations hereunder with respect to the Services provided by such subcontractor.

Section 2.09 <u>Electronic Access</u>. Each Party (the "**<u>Accessing Party</u>**") agrees that, to the extent the other Party (the "**<u>Providing Party</u>**") provides access to the Provider Systems or the Recipient Systems, as applicable, to the Accessing Party or the Accessing Party's Affiliates in connection with the provision or receipt of Services hereunder, the Accessing Party shall, and shall cause its Affiliates to, use such Provider Systems or Recipient Systems, as applicable, only to the extent necessary to access such data, documents, drawings and computer software necessary to provide or receive the Services, and that such access and use shall be subject to such other restrictions on access or use as the Providing Party may reasonably require. The Accessing Party shall not, and shall not permit its Affiliates to, access any other data, documents, drawings or computer software, other than to such extent as may be required in order to use or receive the benefit of the Services (or as agreed between the Parties). This restriction applies to viewing, approving and modifying of data. In providing and receiving information technology Services, the Providing Party shall have the right to implement, and the Accessing Party shall agree to and abide by, reasonable processes and controls under which there will be no greater threat to the Providing Party's information technology operating environment than would exist in the absence of the provision or receipt of such Services, including: (i) requiring adherence to the Providing Party's standard network security agreement, other policies directed to network security and other actions as are required to comply with Law; (ii) implementing technical and administrative safeguards to protect data and information, including industry-standard virus protection software, maintaining existing environments with respect to business continuation and disaster recovery and implementing disaster recovery plans; and (iii) providing, installing and maintaining network locations and telecommunications lines and equipment required to access such locations. The Parties shall, and shall cause their respective Providers to, exercise reasonable care in providing, accessing and using the Services and Facilities to prevent access to the Services and Facilities by unauthorized Persons.

Section 2.10 <u>Telecommunications Matters</u>. The Parties do not provide telecommunications Services to each other and agree not to provide telecommunications Services to each other during the term of this Agreement.

Section 2.11 <u>Intellectual Property License</u>.

(a) Strictly
 in accordance with the terms of this Agreement and without affecting the rights and obligations of the Parties under the Master Asset
 Purchase Agreement and/or the Ancillary Agreements, as the case may be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each
 Recipient hereby grants to each Provider, and each Provider hereby accepts, a non-exclusive, non-transferable (subject to <u>Section 8.07</u>), worldwide right during the Term to access and use the Recipient Systems only to the extent necessary and for the sole
 purpose of performing the Provider's obligations under this Agreement, and not for any other purpose; and

(ii) Each
 Provider hereby grants to each Recipient, and each Recipient hereby accepts, a non-exclusive, non-transferable (subject to <u>Section 8.07</u>), worldwide right during the Term to access and use the Provider Systems only to the extent necessary and for the sole purpose
 of performing the Recipient's obligations under this Agreement, and not for any other purpose.

(b) For
 clarity, the limited rights to use the Recipient Systems and Provider Systems granted in this <u>Section 2.11(a)</u> for each of
 the Services will terminate at the end of the applicable Term and will under no circumstances survive the termination or expiration
 of this Agreement.

(c) Subject
 to the limited licenses in this <u>Section 2.11</u>, and unless the Parties expressly agree otherwise in the schedules to this Agreement
 or in a separate written agreement, each Party, its respective Affiliates and Persons in its respective Group shall exclusively own
 any Intellectual Property that it creates, develops or invents in connection with the provision of any Services under this Agreement.

Section 2.12 <u>Shared Contracts</u>. The Parties do not have any shared contracts with any third party (a "**<u>Shared Contract</u>**") and agree not to enter into any Shared Contract during the Term of this Agreement.

**ARTICLE III**

**<u>COSTS AND DISBURSEMENTS</u>**

Section 3.01 <u>Costs and Disbursements</u>.

(a) Each
 Recipient shall pay to the Provider a fee for the applicable Service or Facility as set forth therefor in the schedules, which fee
 shall, except as otherwise set forth in the schedules, be equal to the Provider's calculation, based upon commercially reasonable
 metrics, of the actual cost (with mark-up, if necessary, to comply with applicable transfer pricing principles under Section 482
 of the Internal Revenue Code and/or Section 247 of the Tax Act, as the case may be), of providing such Services or Facility to the
 Recipient, and with respect to an Additional Service or Additional Facility, the fee shall be the applicable Provider's internal
 and external costs and expenses of providing such Additional Services or Additional Facilities (with mark-up, if necessary, to comply
 with applicable transfer pricing principles under Section 482 of the Internal Revenue Code and/or Section 247 of the Tax Act, as
 the case may be), as agreed between the Parties (each aggregate fee calculated in accordance with this provision constituting a "  **<u>Service Charge</u>**" and, collectively, the "  **<u>Service Charges</u>** "); <u>provided</u>, <u>however</u>, that
 any monthly fee for a Service or Facility not provided or made available hereunder for a full month shall be prorated for the portion
 of such month provided or made available. Except as set forth on a schedule hereto, and subject to <u>Section 2.07</u>, during the
 Term, the amount of a Service Charge for any Services or Facilities shall not increase, except to the extent that there is an increase
 after the Effective Date in the costs actually incurred by the Provider in providing such Services or Facilities as a result of (i)
 an increase in the rates or charges imposed by any third-party provider that is providing goods or services used by the Provider
 in providing the Services or Facilities (as compared to the rates or charges underlying a Service Charge), or (ii) an increase in
 the payroll or benefits (including any retention payments) for any personnel used by the Provider in providing the Services or Facilities.
 Further, except as set forth in the schedules hereto, and subject to <u>Section 2.07</u>, during the Term, the Recipient shall reimburse
 the Provider for any reasonable incremental and documented out-of-pocket expenses incurred by the Provider's personnel in connection
 with performing the Services.

(b) Each
 of the Parties shall deliver invoices to the other Party in accordance with the terms hereof, on a monthly basis, on or prior to
 the fifteenth day following the end of each succeeding month (in accordance with the terms hereof) for the duration of this Agreement
 (or at such other frequency as is consistent with the basis on which the Service Charges are determined) in arrears for the net Service
 Charges due under this Agreement, together with such supporting documentation for the costs set forth in such invoices as may reasonably
 be requested by the Recipient to enable the Recipient to allocate the costs set forth in such invoices. For the avoidance of doubt
 such invoice shall include Service Charges by the Provider without an offset of the Service Charges by the Recipient. To the extent
 the Service Charges owing by FG Group Holdings or FG Group Holdings Providers set forth on an invoice exceed the Service
 Charges owing by Strong Global or Strong Global Providers, Strong Global shall pay, or cause to be paid, to FG Group Holdings
 such net excess invoiced amount in accordance with the terms hereof. To the extent the Service Charges owing by Strong Global
 or Strong Global Providers set forth on an invoice exceed the Service Charges owing by FG Group Holdings or FG Group Holdings
 Providers, FG Group Holdings shall pay, or cause to be paid, to Strong Global such net excess invoiced amount in accordance
 with the terms hereof. Each Party shall pay, or cause to be paid, such net aggregate excess invoiced amount on a monthly basis, by
 wire transfer or check to the other Party (or its designees) within thirty (30) days of the end of each month; <u>provided that</u> (i) any Contracts that prescribe other payment terms for any other individual Service or Facility shall continue to govern under
 the terms of such Contracts; and (ii) to the extent consistent with past practice with respect to Services or Facilities rendered
 outside the United States, payments may be required in local currency. If either Party fails to pay such amount by such date, such
 Party shall be obligated to pay to the other Party, in addition to the amount due, a late interest payment charge calculated at the
 annual rate equal to the Applicable Federal Rate published by the U.S. Internal Revenue Service for such month, calculated on the
 basis of a year of 360 days and the actual number of days elapsed between the end of the thirty (30)-day payment period and the actual
 payment date, shall immediately begin to accrue and any such late payment interest charges shall become immediately due and payable
 in addition to the amount otherwise owed under this Agreement.

Section 3.02 <u>No Right to Set-Off</u>. Except as provided in <u>Section 3.01(b)</u>, no Party shall be permitted to set-off, counterclaim or otherwise withhold any amount owed to the other Party under this Agreement on account of any obligation owed by the other Party that has not been finally adjudicated, settled or otherwise agreed upon by the Parties in writing; <u>provided</u>, <u>however</u>, that each Party shall be permitted to assert a set-off right with respect to any obligation that has been so finally adjudicated, settled or otherwise agreed upon by the Parties in writing against amounts owed by the other Party under this Agreement.

Section 3.03 <u>Taxes</u>. The Service Charges charged under this Agreement are exclusive of any sales, use, value added, goods and services or similar taxes ("**<u>Sales Taxes</u>**") that may be imposed in connection with the Services or Facilities provided hereunder. In addition to the Service Charges, the Recipient: (i) shall be responsible for and shall pay the Provider for any Sales Taxes imposed in connection with any Services or Facilities provided to the Recipient hereunder, and/or (ii) shall reimburse the Provider for any Sales Taxes incurred by the Provider in connection with any Services or Facilities (but only to the extent the Recipient is unable to recover such Sales Taxes by claiming an exemption, input tax credits, or other for recovery available in the ordinary course); <u>provided</u> that the Recipient shall not be obligated to reimburse the Provider for such Sales Taxes if, and to the extent that, the Recipient has provided valid certificates or other applicable documentation that would eliminate the obligation of the Provider to collect and/or pay such Sales Taxes under Law; <u>provided further</u>, that the Provider shall identify separately, state on the invoice therefor, properly and timely collect from the Recipient, and remit as required by Law any such Sales Taxes, and shall provide an invoice for goods and services tax or other value added tax, which invoice shall include such information as is prescribed to permit the Recipient to claim input tax credits for such goods and services tax or value added tax; and <u>provided further</u>, that each of the Recipient and the Provider shall be responsible for (a) any real or personal property Taxes on property it owns or leases; (b) franchise, margin, privilege and similar Taxes on its business; (c) the employment Taxes, income tax deductions, or contributions or premiums, imposed on it or required from it with respect to its employees; and (d) Taxes based on its income, gross receipts or capital. Each Party shall cooperate and take any reasonably requested action in order to minimize any Sales Taxes, including providing any applicable sales and use Tax exemption certificates or other documentation necessary to support the characterization of Services and Facilities and any available explicit exemptions. Each Party agrees to provide to the other such information and data as reasonably requested from time to time and, at the request and expense of the requesting party, to fully cooperate, in connection with (i) the reporting of any Sales Taxes applicable to the Services; (ii) any audit relating to any such Sales Taxes; or (iii) any assessment, refund, claim or proceeding relating to any such Sales Taxes. The Recipient shall control any audit assessment, refund, claim, or proceeding in relation to such Sales Taxes. Each Recipient shall be entitled to deduct or withhold from any amount payable to each Provider under this Agreement such amount as that Recipient, acting reasonably, is required to be deducted or withheld with respect to such payment under the Tax Act, the Internal Revenue Code, or any provision of any applicable federal, provincial, state, local, or foreign Tax Law. Any amount so deducted or withheld any amounts otherwise due and payable to the Provider pursuant to this Agreement shall be timely remitted to the applicable taxing authority to the extent required by applicable Law and shall be treated for all purposes of this Agreement as having been paid to the relevant Person in respect of which such withholding was made.

Section 3.04 <u>Records and Audits</u>.

(a) Each
 Party shall, in accordance with applicable Law, maintain complete and accurate records of all books, records, receipts, invoices,
 reports, and other documents and information relating to the Services and Facilities provided under this Agreement in accordance
 with its standard accounting practices and procedures. The Provider shall retain such books, records, receipts, invoices and other
 documents and information and make them reasonably available, during ordinary business hours, to the Recipient and its auditors for
 a period of three (3) years from the close of each fiscal year of the Provider during which Services or Facilities were provided
 (or for such longer period, if required under applicable provisions of the Internal Revenue Code or the Tax Act), for the purposes
 of verifying invoices submitted with respect to the provision of Services and Facilities or in connection with an external audit
 of the Recipient. As and when so reasonably requested by the Recipient for purposes of verifying invoices submitted to Recipient
 pursuant to <u>Section 3.01</u>, in connection with an external audit of the Recipient, or by a Governmental Entity, the Provider
 will permit an inspection wherein the Provider will (a) make books and records concerning such invoices and the Services and Facilities
 available for inspection by such Persons as the Recipient designates as its authorized representatives; and (b) give Recipient's
 authorized representatives reasonable access during regular business hours to facilities, officers, employees and other representatives
 of the Provider. If a third-party audit conducted by the Recipient determines that the Provider has overcharged the Recipient for
 Services or Facilities, Provider promptly will credit (or, if the Provider has ceased providing the relevant Services or Facilities
 such that the Recipient could not reasonably be expected to consume the credit balance under this Agreement, then the Provider promptly
 will refund) the Recipient for the amount of the overcharge. The costs of the audit will be borne by the Recipient, and upon request
 the audit may be made available to the Provider. In recognition that audits are disruptive and should be avoided if possible, audits
 shall be performed (x) in a manner that will not unreasonably interfere with the normal business operations of the Provider and otherwise
 with a minimum of disruption and (y) no more than once for each given Service.

(b) With
 respect to each Service, unless otherwise requested in writing by the Recipient, for the duration that each Service is provided under
 this Agreement: (i) the Provider will continue to operate the controls and perform the corresponding testing for such Service in
 the same manner as is performed as of the date of this Agreement; and (ii) the Provider will ensure the Recipient specific transaction
 remain in testing populations for Service applicable controls, such that transactions will be eligible for selection and testing
 by the internal audit function in respect of the Sarbanes-Oxley Act of 2002. The Provider will promptly notify the Recipient of any
 control deficiencies or changes to controls. In the event that the Provider reasonably determines that look-back procedures will
 be required for audit testing exceptions, the Provider will provide the Recipient a reasonable opportunity to evaluate the impact
 of such procedures.

Section 3.05 <u>Uses of Services</u>. No Recipient shall resell any Services to any Person whatsoever or permit the use of the Services by any Person other than a Person in its respective Group, an Affiliate, or in connection with such Recipient's operation of its Business substantially as conducted during the term of this Agreement.

Section 3.06 <u>Provision of Services</u>. With respect to any Service, a Provider may, upon ten business days' prior written notice to the applicable Recipient, (i) outsource such Service to a third-party provider; (ii) in-source such Service being provided by a third-party provider; (iii) replace a third-party provider of such Service with a new third-party provider; or (iv) terminate or renegotiate the material terms of an agreement pursuant to which a third-party provider shall provide such Service; provided, that (x) the terms (including pricing) pursuant to which such Service will be provided shall be on terms no less favorable to the Recipient than those set forth in the schedules hereto and (y) with respect to clauses (i) and (iii), (A) such third party is in the business of providing such Service, and (B) such Provider shall notify each third-party provider performing any Service for the applicable Recipients of the confidentiality restrictions set forth herein and shall cause such third-party provider to comply with confidentiality restrictions at least as stringent as those set forth herein.

**ARTICLE IV**

**<u>WARRANTIES AND COMPLIANCE</u>**

Section 4.01 <u>Disclaimer of Warranties</u>. Except as expressly set forth herein, the Parties acknowledge and agree that the Services and Facilities are provided as-is, that the Recipients assume all risks and liability ("**<u>Liability</u>**") arising from or relating to its use of and reliance upon the Services and the Facilities and each Party and their respective Providers make no representation or warranty with respect thereto. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY AND THEIR RESPECTIVE PROVIDERS HEREBY EXPRESSLY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES AND THE FACILITIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY, PERFORMANCE, COMMERCIAL UTILITY, MERCHANTABILITY OR FITNESS OF THE SERVICES AND FACILITIES FOR A PARTICULAR PURPOSE.

Section 4.02 <u>Compliance with Laws and Regulations</u>. Each Party hereto shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement. FOR THE AVOIDANCE OF DOUBT AND NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, EACH PARTY EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED OBLIGATION OR WARRANTY OF THE SERVICES THAT COULD BE CONSTRUED TO REQUIRE PROVIDER TO DELIVER SERVICES OR FACILITIES HEREUNDER IN SUCH A MANNER TO ALLOW A RECIPIENT TO ITSELF COMPLY WITH ANY LAW APPLICABLE TO THE ACTIONS OR FUNCTIONS OF THE RECIPIENT.

**ARTICLE V**

**<u>LIABILITY AND INDEMNIFICATION</u>**

Section 5.01 <u>Limitation of Liability</u>.

(a) NOTWITHSTANDING
 ANYTHING TO THE CONTRARY IN THIS AGREEMENT (BUT WITHOUT LIMITING <u>SECTION 5.02</u> OR <u>SECTION 5.03</u>), NEITHER PARTY NOR ANY
 MEMBER OF ITS GROUP SHALL HAVE ANY OBLIGATION OR LIABILITY TO THE OTHER WITH RESPECT TO THE MATTERS CONTEMPLATED BY THIS AGREEMENT,
 WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT OR OTHERWISE, FOR ANY SPECIAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
 DAMAGES, LOST PROFITS OR OPPORTUNITY COSTS, WHETHER FORESEEABLE OR NOT, EXCEPT, IN EACH CASE, TO THE EXTENT ASSESSED IN CONNECTION
 WITH (I) A THIRD PARTY CLAIM WITH RESPECT TO WHICH A PERSON AGAINST WHICH SUCH DAMAGES ARE ASSESSED IS ENTITLED TO INDEMNIFICATION
 HEREUNDER; OR (II) SUCH PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(b) IN
 NO EVENT SHALL THE AGGREGATE LIABILITY OF THE PROVIDER UNDER OR WITH RESPECT TO THIS AGREEMENT EXCEED THE GREATER OF (I) THE TOTAL
 AMOUNT PAID TO THE PROVIDER UNDER THIS AGREEMENT FOR THE PROVISION OF THE SERVICES AND FACILITIES DURING THE TWELVE (12) MONTH PERIOD
 IMMEDIATELY PRECEDING THE DATE ON WHICH SUCH INDEMNITY OBLIGATION AROSE; (II) THE INCREMENTAL COST OF SUCH PARTY PERFORMING OR OBTAINING
 THE SERVICE OR FACILITY; OR (III) THE INCREMENTAL COST OF SUCH PARTY OBTAINING THE SERVICE OR FACILITY FROM A THIRD PARTY.

Section 5.02 <u>Indemnification</u>.

(a) Subject to the limitations set forth in <u>Section 5.01</u>, each Party, in its capacity as a Provider and on behalf of each member of its Group in its capacity as a Provider, shall indemnify, defend, and hold harmless the other Party, in its capacity as a Recipient and each member of the other Party's Group (the "  **<u>Recipient Indemnitees</u>**") from and against any and all Indemnifiable Losses of the Recipient Indemnitees to the extent based upon, related to, arising out of or otherwise in connection with any Services or Facilities provided by the Provider Group to the extent such Indemnifiable Losses result from or arise out of the Provider Group's (i) breach of this Agreement, (ii) violation of Laws in providing the Services or Facilities or (iii) gross negligence, recklessness or willful misconduct.

(b) Subject to the limitations set forth in <u>Section 5.01</u>, each Party, in its capacity as a Recipient and on behalf of each member of its Group in its capacity as a Recipient, shall indemnify, defend and hold harmless the other Party, in its capacity as Provider and each member of the other Party's Group (the "  **<u>Provider Indemnitees</u>**") from and against all Indemnifiable Losses of the Provider Indemnitees except to the extent such Indemnifiable Losses are based upon, related to, result from or arise out of the Provider Group's (i) breach of this Agreement, (ii) violation of Laws in providing the Services or Facilities, or (iii) gross negligence, recklessness or willful misconduct.

(c) The provisions of <u>Section 5.02(a)</u> and <u>Section 5.02(b)</u> shall, to the maximum extent permitted by applicable Law, be the sole and exclusive remedies of the Provider Indemnitees and the Recipient Indemnitees, as applicable, for any Indemnifiable Losses, whether arising from statute, principle of common or civil law, principles of strict liability, tort, contract or otherwise under this Agreement.

Section 5.03 <u>Indemnification Procedures</u>.

(a) *Direct Claims.* Other
 than with respect to Third Party Claims (as defined below), which shall be governed by <u>Section 5.03(b),</u> each FG Group Holdings
 indemnitee and Strong Global indemnitee (each, an "  **<u>Indemnitee</u>**") shall notify in writing, with respect
 to any matter that such Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement,
 the Party which is or may be required pursuant to this Article V (the "  **<u>Indemnifying Party</u>** "), within forty-five
 (45) days of such determination, stating in such written notice the amount of the Indemnifiable Loss claimed, if known, and, to the
 extent practicable, method of computation thereof, and referring to the provisions of this Agreement in respect of which such right
 of indemnification is claimed by such Indemnitee or arises; provided, however, that the failure to provide such written notice shall
 not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have
 been actually materially prejudiced as a result of such failure. The Indemnifying Party will have a period of forty-five (45) days
 after receipt of a notice under this <u>Section 5.03(a</u>) within which to respond thereto. If the Indemnifying Party fails to respond
 within such period, the Liability specified in such notice from the Indemnitee shall be conclusively determined to be a Liability
 of the Indemnifying Party hereunder. If such Indemnifying Party responds within such period and rejects such claim in whole or in
 part, the disputed matter shall be resolved in accordance with <u>Section 8.14</u>.

(b) *Third Party Claims*.
 If a claim or demand is made against an Indemnitee by any Person who is not a member of the FG Group Holdings Group or the
 Strong Global Group (a "  **<u>Third Party Claim</u>**") as to which such Indemnitee is or may be entitled to indemnification
 pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing (which notice obligation may be satisfied
 by providing copies of all notices and documents received by the Indemnitee relating to the Third Party Claim), and in reasonable
 detail, of the Third Party Claim promptly (and in any event within the earlier of (x) forty-five (45) days or (y) two (2) business
 days prior to the final date of the applicable response period under such Third Party Claim) after receipt by such Indemnitee of
 written notice of the Third Party Claim; provided, however, that the failure to provide notice of any such Third Party Claim pursuant
 to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent
 the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. Thereafter, the Indemnitee shall
 deliver to the Indemnifying Party, promptly (and in any event within ten (10) business days) after the Indemnitee's receipt
 thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim.

(c) The Indemnifying Party shall be entitled, if it so chooses, to assume the defense thereof, and if it does not assume the defense of such Third Party Claim, to participate in the defense of any Third Party Claim in accordance with the terms of <u>Section 5.04</u> at such Indemnifying Party's own cost and expense and by such Indemnifying Party's own counsel, that is reasonably acceptable to the Indemnitee, within thirty (30) days of the receipt of an indemnification notice from such Indemnitee; provided, however, that the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim to the extent such Third Party Claim (x) seeks injunctive, equitable or other relief other than monetary damages (provided that such Indemnitee shall reasonably cooperate with the Indemnifying Party, at the request of the Indemnifying Party, in seeking to separate any such claims from any related claim from any monetary damages if this clause (x) is the sole reason that such Third Party Claim is a Non-Assumable Third Party Claim), (y) is an action by a Governmental Entity, or (z) involves an allegation of a criminal violation (any of clauses (x), (y) and (z), a "  **<u>Non-Assumable Third Party Claim</u>** "). In connection with the Indemnifying Party's defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, at its own expense and, in any event, shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent Information, materials and information in such Indemnitee's possession or under such Indemnitee's control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that in the event of a conflict of interest between the Indemnifying Party and the applicable Indemnitee(s), such Indemnitee(s) shall be entitled to retain, at the Indemnifying Party's expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter. In the event the Indemnifying Party exercises the right to assume and control the defense of a third party, (1) the Indemnifying Party shall keep the Indemnitees(s) apprised of all material developments in such defense, (2) the Indemnifying Party shall not withdraw from the defense of such Third Party Claim without providing advance notice to the Indemnitee(s) reasonably sufficient to allow the Indemnitee(s) to prepare to assume the defense of such Third Party Claim, and (3) the Indemnifying Party shall conduct the defense of the Third Party Claim actively and diligently, including the posting of bonds or other security in connection with the defense of such Third Party Claims.

(d) Other than in the case of a Non-Assumable Third Party Claim, if an Indemnifying Party fails for any reason to assume responsibility for defending a Third Party Claim within the period specified in this <u>Section 5.03</u> or if the Indemnifying Party fails to actively and diligently defend the Third Party Claim, such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense of any Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make available to the Indemnitee, at the Indemnifying Party's expense, and make available to the Indemnitee, at the Indemnifying Party's expense, all witnesses, pertinent Information, materials and information in such Indemnitee's possession or under such Indemnitee's control relating thereto as are reasonably required by the Indemnitee.

(e) No Indemnitee may admit any liability with respect to, consent to the entry of any judgement of, or settle, compromise or discharge, the Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. No Indemnified Party shall admit any liability with respect to, consent to entry of any judgment of, or settle, compromise or discharge, the Third Party Claim without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed) unless such settlement or judgement (i) completely and unconditionally releases the Indemnitee in connection with such matter, (ii) provides relief consisting solely of money damages borne by the Indemnifying Party and (iii) does not involve any admission by the Indemnitee of any wrongdoing or violation of Law.

(f) Absent fraud or willful misconduct by an Indemnifying Party, the indemnification provisions of this Article V shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or losses resulting from any breach of this Agreement and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article V against any Indemnifying Party.

(g) The provisions of this
 Article V shall apply to Third Party Claims that are already pending or asserted as well as Third Party Claims brought or asserted
 after the date of this Agreement. There shall be no requirement under this <u>Section 5.03</u> to give a notice with respect to any
 Third Party Claim that exists as of the Effective Date. The Parties acknowledge that Liabilities for actions (regardless of the parties
 to the actions) may be partly FG Group Holdings Liabilities and partly Strong Global Liabilities. If the Parties cannot agree
 on the allocation of any such Liabilities for actions, they shall resolve the matter pursuant to the procedures set forth in <u>Section 8.14</u>. Neither Party shall, nor shall either Party permit its Subsidiaries to, file Third Party claims or cross-claims against
 the other Party or its Subsidiaries in an action in which a Third Party Claim is being resolved.

Section 5.04 <u>Cooperation in Defense and Settlement</u>.

(a) With respect to any Third
Party Claim that implicates both Parties in any material respect due to the allocation of Liabilities, responsibilities for management
of defense and related indemnities pursuant to this Agreement, the Parties agree to use commercially reasonable efforts to cooperate
fully and maintain a joint defense (in a manner that, to the extent reasonably practicable, will preserve for all Parties any privilege
with respect thereto). The Party that is not responsible for managing the defense of any such Third Party Claim shall, upon reasonable
request and at such Party's own expense, be consulted with respect to significant matters relating thereto and may, if necessary
or helpful, retain counsel to assist in the defense of such claims. Notwithstanding the foregoing, nothing in this <u>Section 5.04(a)</u> shall derogate from any Party's rights to control the defense of any action in accordance with <u>Section 5.03</u>.

(b) Each of FG Group Holdings
 and Strong Global agrees that at all times from and after the Effective Date, if an action is commenced by a third party naming
 two (2) or more Parties (or any member of such Parties' respective Groups) as defendants and with respect to which one or more
 named Parties (or any member of such Party's respective Group) is a nominal defendant and/or such action is otherwise not a
 Liability allocated to such named Party under this Agreement, then the other Party or Parties shall use commercially reasonable efforts
 to cause such nominal defendant to be removed from such action, as soon as reasonably practicable.

Section 5.05 <u>Indemnification Payments.</u> Indemnification required by this Article V shall be made by periodic payments of the amount of Indemnifiable Losses in a timely fashion during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss incurred.

Section 5.06 <u>Contribution</u>. If the indemnification provided for in this Article V is unavailable for any reason to an Indemnitee (other than failure to provide notice with respect to any Third Party Claims in accordance with <u>Section 5.03(b)</u>) in respect of any Indemnifiable Loss, then the Indemnifying Party shall, in accordance with this <u>Section 5.06</u>, contribute to the Indemnifiable Losses incurred, paid or payable by such Indemnitee as a result of such Indemnifiable Loss in such proportion as is appropriate to reflect the relative fault of Strong Global and each other member of the Strong Global Group, on the one hand, and FG Group Holdings and each other member of the FG Group Holdings Group, on the other hand, in connection with the circumstances which resulted in such Indemnifiable Loss. With respect to any Indemnifiable Losses arising out of or related to information contained in securities law filings, the relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact relates to information supplied by the Strong Global Business of a member of the Strong Global Group, on the one hand, or the FG Group Holdings Business or a member of the FG Group Holdings Group, on the other hand.

**ARTICLE VI**

**<u>TERMINATION</u>**

Section 6.01 <u>Termination</u>.

(a) This Agreement may be terminated by a Party then not in breach of its obligations hereunder if the other Party is in material breach of this Agreement (unless the occurrence or materiality of such breach is subject to a good faith dispute between the Parties) and such breach is not corrected within thirty (30) days of a written notice of such breach from the non-breaching Party.

(b) Without prejudice to any rights with respect to a Force Majeure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a Recipient may from time to time terminate this Agreement with respect to any Service or Facility: (A) for any reason or no reason upon providing at least thirty (30) days' prior written notice of such termination to the Provider (unless a shorter or longer notice period is specified in the schedules to this Agreement or in a third party agreement to provide Services or Facilities) or (B) if the Provider has failed to perform any of its material obligations under this Agreement with respect to such Service or Facility, and such failure shall continue uncured for a period of thirty (30) days after receipt by the Provider of written notice of such failure (unless such failure is subject to a good faith dispute between the Parties); or

(ii) a Provider may terminate this Agreement with respect to one or more Services or Facilities, in whole but not in part, at any time upon providing at least ten (10) days' prior written notice to the Recipient, if the Recipient has failed to perform any of its material obligations under this Agreement relating to such Services or Facilities, and such failure shall continue uncured for a period of thirty (30) days after receipt by Recipient of a written notice of such failure (unless such failure is subject to a good faith dispute between the Parties). The relevant schedule shall be updated to reflect any terminated Service or Facility. In the event that the effective date of the termination of any Service or Facility is a day other than at the end of a month, the Service Charge associated with such Service or Facility shall be pro-rated accordingly.

(c) Except as may be provided in the schedules to the Agreement, no advance notice shall be required to terminate any Service or Facility in connection with the expiration of the Service or Facility as set forth in the schedules to this Agreement.

Section 6.02 <u>Effect of Termination</u>.

(a) Upon termination of any Service or Facility in accordance with the terms of this Agreement, the Provider shall have no further obligation to provide the terminated Service or Facility, and the Recipient shall have no obligation to pay any Service Charges relating to any such Service or Facility; <u>provided</u> that the Recipient shall remain obligated to the Provider for the Service Charges owed and payable in respect of Services or Facilities provided prior to the effective date of termination; <u>provided further</u>, that to the extent costs and expenses are incurred by a Provider in connection with Recipient's request to terminate or reduce Services or Facilities, the Recipient shall be obligated to pay for costs resulting from termination or reduction.

(b) The Parties acknowledge and agree that (a) there may be interdependencies among the Services and Facilities being provided under this Agreement; (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine whether (i) any such interdependencies exist with respect to the particular Service or Facility that a Party is seeking to terminate or reduce and (ii) a Party's ability to provide or receive a particular Service or Facility would be adversely affected by the termination or suspension of another Service or Facility; and (c) if such interdependencies exist, the Parties shall negotiate in good faith to amend any such impacted Services or Facilities, which amendment shall be consistent with the terms of comparable Services or Facilities.

(c) In connection with the termination of any Service or Facility, the provisions of this Agreement not relating solely to such terminated Service or Facility shall survive any such termination, and in connection with a termination of this Agreement, <u>Article I</u>, <u>Article IV</u>, <u>Article V</u>, this <u>Article VI</u>, <u>Article VII</u>, <u>Article VIII</u>, and Liability for all due and unpaid Service Charges shall continue to survive indefinitely.

Section 6.03 <u>Force Majeure</u>.

(a) No Party (or any Person acting on its behalf) shall have any Liability or responsibility for failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure; provided that (i) such Party shall have exercised commercially reasonable efforts to minimize the effect of Force Majeure on its obligations; and (ii) the nature, quality and standard of care of the Services and/or Facilities provided by the Provider after a Force Majeure shall be substantially the same as the nature, quality and standard of care that the Provider provides prior thereto. In the event of an occurrence of a Force Majeure, the Party whose performance is affected thereby shall give notice of suspension as soon as reasonably practicable to the other stating the date and extent of such suspension and the cause thereof, and such Party shall resume the performance of such obligations as soon as reasonably practicable after the removal of the cause.

(b) If, as a result of a Force Majeure, a suspension of Services or Facilities shall continue or be expected to continue for a period of at least thirty (30) days, during the period thereof, the Recipient shall be (i) entitled to seek at Recipient's cost an alternative provider of such Services or Facilities, (ii) entitled to permanently terminate such Services or Facilities and (iii) relieved of the obligation to pay Service Charges for the provision of such Services or Facilities throughout the duration of such Force Majeure and, in the event of termination, thereafter. If, as a result of a Force Majeure, a suspension of Services or Facilities shall continue or be expected to continue for a period of at least thirty (30) days, during the period thereof, the Provider shall be entitled to permanently terminate such Services or Facilities.

**ARTICLE VII**

**<u>MANAGEMENT AND CONTROL</u>**

Section 7.01 <u>Cooperation</u>.

(a) During the Term, each Party shall use its commercially reasonable efforts to cooperate with the other Party with respect to the provision of Services and Facilities and in responding to such the other Party's reasonable requests for information related thereto. Neither Party shall knowingly take, directly or indirectly, any action which would substantially interfere with or increase the cost to the other Party of providing, receiving, accessing or enjoying the use of any of the Services or Facilities. Without limiting the foregoing, each Party shall provide the other Party (upon a showing of legitimate business purpose) with reasonable access to records and personnel related to the Services and Facilities.

(b) To the extent the Parties or a member of their respective Group have entered into any third-party Contracts in connection with any of the Services or Facilities, the Recipient shall comply with the terms of such Contracts to the extent consistent with the terms of this Agreement.

Section 7.02 <u>Required Consents, Licenses or Approvals</u>. Each Party, as a Provider, shall use commercially reasonable efforts to obtain any and all third party consents, licenses or approvals necessary or advisable to allow such Party to provide the Services and Facilities; <u>provided</u>, <u>however</u>, that the costs of such consents, licenses or approvals shall be paid by the Recipient. Each Party shall provide written evidence of receipt of any required consents, licenses or approvals to the other Party upon such other Party's request. If, with respect to a Service or Facility, the Parties, despite their efforts, are unable to obtain such required consents, licenses or approvals, the Provider will, at Recipient's expense, use commercially reasonable efforts to perform the Service or provide the Facility in a manner that does not require such consents, licenses or approvals.

Section 7.03 <u>Personnel</u>.

(a) The Provider of any Service or Facility shall make available to the Recipient of such Service or Facility such personnel as may be reasonably necessary to provide such Service or Facility, in accordance with such Provider's standard business practices. The Provider shall have the right, in its reasonable discretion, to (i) designate which personnel it will assign to provide such Service or Facility, and (ii) remove and replace such personnel at any time.

(b) The Provider of any Service or Facility shall be solely responsible for all salary, employment and other benefits of and Liabilities relating to the employment or contracting of Persons employed or contracted by such Provider. In performing their respective duties hereunder, all employees and other representatives of a Provider shall be under the sole direction, control and supervision of such Provider, and such Provider shall have the sole right to exercise all authority with respect to such Persons (including the termination, assignment and compensation thereof).

Section 7.04 <u>No Agency</u>. Nothing in this Agreement shall be deemed in any way or for any purpose to constitute any party acting as an agent of another unaffiliated party in the conduct of such other party's Business. Each Party shall act as an independent contractor and not as the agent of the other Party in performing its obligations under this Agreement.

**ARTICLE VIII**

**<u>MISCELLANEOUS</u>**

Section 8.01 <u>Treatment of Confidential Information</u>.

(a) Notwithstanding any termination
 of this Agreement, , each of FG Group Holdings and Strong Global shall hold, and shall cause members of their respective Groups
 and their officers, employees, agents, consultants and advisors to hold, in strict confidence (and not to disclose or release or,
 except as otherwise permitted by this Agreement, use, including for any ongoing or future commercial purpose, without the prior written
 consent of the Party to whom the Confidential Information relates (which may be withheld in such Party's sole and absolute
 discretion, except where disclosure is required by applicable Law)), any and all Confidential Information concerning or belonging
 to the other Party or its Group; provided that each Party may disclose, or may permit disclosure of, Confidential Information (i)
 to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need
 to know such Information or auditing and other non-commercial purposes and are informed of the obligation to hold such Information
 confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any
 Party or any of its respective Subsidiaries is required or compelled to disclose any such Confidential Information by judicial or
 administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with
 a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) as required in connection with any legal or other
 proceeding by one Party against any other Party or in respect of claims by one Party against the other Party brought in a proceeding,
 (iv) as necessary in order to permit a Party to prepare and disclose its financial statements in connection with any regulatory filings
 or tax returns, (v) as necessary for a Party to enforce its rights or perform its obligations under this Agreement, or (vi) to other
 Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic transaction, to the extent
 reasonably necessary in connection therewith, provided an appropriate and customary confidentiality agreement has been entered into
 with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for
 disclosure of Confidential Information is made by a third party pursuant to clause (ii), (iii), or (v) above, each Party, as applicable,
 shall promptly notify (to the extent permissible by Law) the Party to whom the Confidential Information relates of the existence
 of such request, demand or disclosure requirement and shall provide such affected Party a reasonable opportunity to seek an appropriate
 protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event
 that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish
 only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to
 ensure that confidential treatment is accorded such Confidential Information.

(b) Each Party acknowledges
 that it and the other members of its Group may have in its or their possession confidential or proprietary Information of third parties
 that was received under confidentiality or non-disclosure agreements with such third party while such Party and/or members of its
 Group were part of the FG Group Holdings Group. Each Party shall comply, and shall cause the other members of its Group to
 comply, and shall cause its and their respective officers, employees, agents, consultants and advisors (or potential buyers) to comply,
 with all terms and conditions of any such third-party agreements entered into prior to the Effective Date, with respect to any confidential
 and proprietary Information of third parties to which it or any other member of its Group has had access.

(c) Notwithstanding anything
 to the contrary set forth herein, (i) the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential
 Information if they exercise at least the same degree of care that applies to FG Group Holdings' confidential and proprietary
 information pursuant to policies in effect as of the Effective Date and (ii) confidentiality obligations provided for in any Contract
 between each Party or its Subsidiaries and their respective employees shall remain in full force and effect. Notwithstanding anything
 to the contrary set forth herein, Confidential Information of any Party in the possession of and used by any other Party as of the
 Effective Date may continue to be used by such Party in possession of the Confidential Information in and only in the operation of
 the Strong Global Business (in the case of the Strong Global Group) or the FG Group Holdings Business (in the case of the
 FG Group Holdings Group); provided that such Confidential Information may only be used by such Party and its officers, employees,
 agents, consultants and advisors in the specific manner and for the specific purposes for which it is used as of the date of this
 Agreement; and may only be shared with additional officers, employees, agents, consultants and advisors of such Party on a need-to-know
 basis exclusively with regard to such specified use; provided, further that such Confidential Information may be used only so long
 as the Confidential Information is maintained in confidence and not disclosed in violation of <u>Section 8.01(a).</u> 

(d) The Parties agree that irreparable damage may occur in the event that the provisions of this <u>Section 8.01</u> were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or injunctions to enforce specifically the terms and provisions hereof in any court having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

(e) Each Party shall comply in all material respects with all applicable state, federal and foreign import-export and privacy, security and data protection Laws that are or that may in the future be applicable to the provision of Services or Facilities hereunder.

Section 8.02 <u>Entire Agreement; Construction</u>. This Agreement, including the schedules, and the Master Asset Purchase Agreement and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any schedule hereto, the schedule shall prevail.

Section 8.03 <u>Counterparts</u>. This Agreement may be executed in more than one counterpart, all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.

Section 8.04 <u>Notices</u>. All notices, requests, claims, demands and other communications under this Agreement shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this <u>Section 8.04</u>):

To FG Group Holdings:

FG Group Holdings, Inc.

5960 Fairview Road, Suite 275

Charlotte, North Carolina, 28210

Attn: Mark Roberson

Email: mark.roberson@btn-inc.com

To Strong Global:

Strong Global Entertainment, Inc.

5960 Fairview Road, Suite 275

Charlotte, North Carolina, 28210

Attn: Mark Roberson

Email: mark.roberson@btn-inc.com

Section 8.05 <u>Amendments; Consents; Waivers</u>. No amendment or other modification of this Agreement or any schedule hereto shall be effective unless in a writing signed and delivered by both Parties hereto. Any consent or waiver required or permitted to be given by any Party to the other Party under this Agreement shall be in writing and signed by the Party giving such consent or waiver and shall be effective only against such Party (and its Group).

Section 8.06 <u>Assignment</u>. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party hereto without the prior written consent of the other Party (not to be unreasonably withheld or delayed), and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void. Notwithstanding the foregoing, this Agreement shall be assignable to (i) a Subsidiary of a Party, or (ii) a bona fide unaffiliated third party in connection with a Change of Control of a Party so long as the resulting, surviving or transferee entity assumes all the obligations of the relevant party hereto by operation of law or otherwise; <u>provided however</u> that, unless otherwise agreed by the non-assigning Party or in connection with a Change of Control of a Party as described above, no assignment permitted by this <u>Section 8.06</u> shall release the assigning Party from Liability for the full performance of its obligations under this Agreement.

Section 8.07 <u>Successors and Assigns</u>. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.

Section 8.08 <u>Payment Terms</u>. Without the consent of the party receiving any payment under this Agreement specifying otherwise, and except as contemplated in Section 3.01(b), all payments to be made by either FG Group Holdings or Strong Global under this Agreement shall be made in US Dollars. Except as expressly provided herein, any amount which is not expressed in US Dollars shall be converted into US Dollars by using the exchange rate published on Bloomberg at 5:00 pm Eastern Standard time (EST) on the day before the relevant date or in the Wall Street Journal on such date if not so published on Bloomberg, or such other published exchange rate, as may be agreed by the Parties, or as may be required to be used under applicable provisions of the Internal Revenue Code and/or the Tax Act, as the case may be.

Section 8.09 <u>Affiliates</u>. Each of the Parties shall cause to be performed, all actions, agreements and obligations set forth herein to be performed by such Party or any Affiliate of such Party or by any entity that becomes an Affiliate of such Party at and after the Effective Date, to the extent such Affiliate remains an Affiliate of the applicable Party.

Section 8.10 <u>Third Party Beneficiaries</u>. This Agreement is solely for the benefit of the Parties and Persons in their respective Groups and should not be deemed to confer upon third parties any remedy, claim, Liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

Section 8.11 <u>Title and Headings</u>. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

Section 8.12 <u>Schedules</u>. The schedules to this Agreement shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

Section 8.13 <u>Governing Law</u>. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

Section 8.14 <u>Dispute Resolution</u>.

(a) *Negotiation and Arbitration.* In the event of a controversy, dispute or action between the Parties arising out of, in connection with, or in relation to this Agreement or any of the transactions contemplated hereby or thereby, including with respect to the interpretation, performance, nonperformance, validity or breach of this Agreement or otherwise arising out of, or in any way related to, this Agreement or the transactions contemplated hereby or thereby, and including any action based on contract, tort, statute or constitution, including the arbitrability of such controversy, dispute or action and any controversy, dispute or action (a "  **<u>Dispute</u>** "), the following provisions shall apply, unless expressly specified herein.

(b) *Negotiations.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (A) either Party may deliver written notice of a Dispute (a "  **<u>Dispute Notice</u>**") and (B) the general counsels of the Parties (and/or such other individuals designated by the respective general counsels) and/or the executive officers designated by the Parties in writing shall thereupon negotiate for a reasonable period of time to settle such Dispute; provided, however, that such reasonable period shall not, unless otherwise agreed by the Parties in writing, exceed sixty (60) days from the date of receipt of the Dispute Notice (the "  **<u>Negotiation Period</u>** ").

(ii) With respect to the subject Dispute, in the event of any arbitration in accordance with this <u>Section 8.14</u>, the Parties shall not assert the defenses of statute of limitations and laches arising during the period beginning after the date of receipt of the Dispute Notice, and any contractual time period or deadline under this Agreement to which such Dispute relates occurring after the Dispute Notice is received shall not be deemed to have passed until such Dispute has been resolved.

(iii) All offers, promises, conduct and statements, whether oral or written, made in the course of the discussions and negotiations related to the relevant Negotiation Period by any of the Parties (or the other members of their respective Group), their respective agents, employees, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the Parties (or any other member of a Group), and, in any action, shall be governed by Rule 408 of the Federal Rules of Evidence and any applicable similar state or foreign rule and evidence of such discussions shall not be admissible in any future action between the Parties and any member of their respective and/or any Indemnitee, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation or discussion.

(c) *Arbitration.* If the Dispute has not been resolved for any reason as of the expiration of the applicable Negotiation Period, such Dispute shall be submitted to final and binding arbitration administered in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("  **<u>AAA</u>**") then in effect (the "  **<u>Rules</u>** "), except as modified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The arbitration shall be conducted by an arbitral panel (the "  **<u>Arbitral Panel</u>**") consisting of three members whenever the amount in controversy exceeds $3,000,000 in principal amount, and by only one arbitrator for any lesser sum. In the instance where a three-person Arbitral Panel is used, the claimant shall appoint one arbitrator in its demand for arbitration and the respondent shall appoint one arbitrator within twenty-one (21) days after the appointment of the first arbitrator. The third arbitrator, who shall serve as chair of the Arbitral Panel, shall be jointly appointed by the two party-nominated arbitrators within twenty-one (21) days of the appointment of the second arbitrator. In the event of an instance where a one-person Arbitral Panel is used, the arbitrator shall be appointed by the AAA in accordance with its Rules. Any arbitrator not timely appointed by the Parties shall be appointed by the AAA according to its Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In resolving any Dispute to the extent it involves contractual issues under this Agreement the arbitrator(s) shall apply the governing law specified in this Agreement.

(iii) For the avoidance of doubt, by submitting their dispute to arbitration under the Rules, the Parties expressly agree that all issues of arbitrability, including all issues concerning the propriety and timeliness of the commencement of the arbitration (including any defense based on a statute of limitation, if applicable), the jurisdiction of the Arbitral Panel, and the procedural conditions for arbitration, shall be finally and solely determined by the Arbitral Panel.

(iv) The Arbitral Panel shall be entitled, if appropriate, to award any remedy, including monetary damages, specific performance and all other forms of legal and equitable relief that is in accordance with the terms of this Agreement; provided, however, that the Arbitral Panel shall have no authority or power to (i) limit, expand, alter, modify, revoke or suspend any condition or provision of this Agreement, nor any right or power to award punitive, exemplary, treble or similar damages, or (ii) review, resolve or adjudicate, or render any award or grant any relief in respect of, any issue, matter, claim or Dispute other than the specific Dispute or Disputes submitted by the Parties to such Arbitral Panel for final and binding arbitration, including any Disputes consolidated therewith in accordance with <u>Section 8.14(c)(ix)</u>.

(vi) The Parties agree to engage in full disclosure of all related documents and evidence (electronic or otherwise, including email, text, and similar writings) related to the Dispute. There shall otherwise be no discovery pursuant to rules providing for same in certain states or nations. Any failure to fully disclose shall result in a negative inference being taken by the arbitrator(s) against the party failing to disclose said evidence or documents. Testimony by any witness during a merits or interim relief hearing shall be taken on examination, in the first instance, by way of a declaration provided to the arbitrator(s) and the opposing party in advance of said hearing on a schedule imposed by the arbitrator(s).

(vii) The Arbitral Panel (and, if applicable, Emergency Arbitrator (as defined below)) shall have the full authority to grant any pre-arbitral injunction, pre-arbitral attachment, interim or conservatory measure or other order in aid of arbitration proceedings ("  **<u>Interim Relief</u>** "). The Parties shall exclusively submit any application for Interim Relief to only: (A) the Arbitral Panel; or (B) prior to the constitution of the Arbitral Panel, an emergency arbitrator appointed in the manner provided for in the Rules (an "  **<u>Emergency Arbitrator</u>** "). Any Interim Relief so issued shall, to the extent permitted by applicable Law, be deemed a final arbitration award for purposes of enforceability. The foregoing procedures shall constitute the exclusive means of seeking Interim Relief, provided, however, that (i) the Arbitral Panel shall have the power to continue, review, vacate or modify any Interim Relief granted by an Emergency Arbitrator, and the Arbitral Panel shall apply a de novo standard of review to the factual and legal findings of the Emergency Arbitrator and conduct any such proceeding with respect to the actions of the Emergency Arbitrator on an expedited basis; and (ii) in the event an Emergency Arbitrator or the Arbitral Panel issues an order granting, denying or otherwise addressing Interim Relief (a "  **<u>Decision on Interim Relief</u>** "), any Party may apply to enforce or require specific performance of such Decision on Interim Relief in any court of competent jurisdiction. For the avoidance of doubt, any Party may appeal any Decision on Interim Relief determined by any Emergency Arbitrator to an Arbitral Panel; provided that, such Decision on Interim Relief shall remain enforceable from and after any such appeal, unless and until the Decision on Interim Relief is vacated or modified by the Arbitral Panel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) The Arbitral Panel shall have the power to allocate the costs and fees of the arbitration (including reasonable attorney's fees and costs) and the costs and fees addressed in the rules between the Parties in the manner it deems fit with a purpose to substantially defray the costs and attorney's fees incurred by the prevailing party.

(ix) The Arbitral Panel may, if requested by a Party, consolidate the arbitration with any other arbitration (A) if the other arbitration involves another Dispute arising under either this Agreement, provided the Arbitral Panel is satisfied such other dispute involves common factual issues, or (B) with the prior written consent of all parties engaged in such arbitrations. Such consolidated arbitration shall be determined by the Arbitral Panel appointed for the arbitration proceeding that was commenced first in time, unless otherwise agreed in writing by all parties engaged in such arbitration.

(d) *Confidentiality.* Without limiting the provisions of the Rules, unless otherwise agreed in writing by or among the Parties or permitted by this Agreement, the Parties shall keep, and shall cause the members of their Group to keep, confidential all matters relating to the arbitration (including the existence of the proceeding and all of its elements and including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions) or the award, and any negotiations, conferences and discussions pursuant to this <u>Section 8.14</u> shall be treated as compromise and settlement negotiations; provided that such matters may be disclosed (i) to the extent reasonably necessary in any proceeding brought to enforce this <u>Section 8.14</u> or the award or for entry of a judgment upon the award and (ii) to the extent otherwise required by Law or the rules of any stock exchange on which a Party securities may be listed. Nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences and discussions that is not otherwise independently discoverable shall be offered or received as evidence or used for impeachment or for any other purpose in any current or future arbitration. In the event any Party makes application to any court in connection with this <u>Section 8.14(d)</u> (including any proceedings to enforce a final award or any Interim Relief), that Party, as applicable, shall take all steps reasonably within its power to cause such application, and any exhibits (including copies of any award or decisions of the Arbitral Panel or Emergency Arbitrator) to be filed under seal, shall oppose any challenge by any third party to such sealing, and shall give the other Party notice of such challenge as promptly as practicable.

(e) *Sole and Exclusive Remedy.* Arbitration under this <u>Section 8.14</u> shall be the sole and exclusive remedy for any Dispute, and any award rendered thereby shall be final and binding upon the Parties as from the date rendered. Judgment on the award rendered by the Arbitral Panel may be entered in any court having jurisdiction thereof, including any court having jurisdiction over the relevant Party or its Assets.

(f) *Service of Process.* In the event any proceeding is brought in any court of competent jurisdiction to enforce the dispute resolutions provisions of this <u>Section 8.14</u> to obtain relief as described in this <u>Section 8.14</u>, or to enforce any award, relief or decision issued by an Arbitral Tribunal, each Party irrevocably consents to the service of process in any action by mailing of copies of the process to the Parties as provided in <u>Section 8.04</u>. Service effected as provided in this manner will become effective five (5) days after the mailing of the process.

(g) *Waiver of Jury Trial.* EACH OF BALLANTYNE AND STRONG GLOBAL HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF BALLANTYNE AND STRONG GLOBAL CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY TO THIS AGREEMENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY TO THIS AGREEMENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH OF BALLANTYNE AND STRONG GLOBAL UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH OF BALLANTYNE AND STRONG GLOBAL MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH OF BALLANTYNE AND STRONG GLOBAL HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <u>SECTION 8.14.</u> 

(h) *Treatment of Arbitration*. The Parties agree that any arbitration hereunder shall be kept confidential, and that the existence of the proceeding and all of its elements (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall be deemed confidential, and shall not be disclosed beyond the Arbitral Panel, the Parties, their counsel, and any Person necessary to the conduct of the proceeding, except as and to the extent required by law and to defend or pursue any legal right. In the event any Party makes application to any court in connection with this <u>Section 8.14(h)</u> (including any proceedings to enforce a final award or any Interim Relief), that party shall take all steps reasonably within its power to cause such application, and any exhibits (including copies of any award or decisions of the Arbitral Panel or Emergency Arbitrator) to be filed under seal, shall oppose any challenge by any third party to such sealing, and shall give the other Party immediate notice of such challenge.

(i) *Continuity of Service and Performance.* Unless otherwise agreed in writing, the Parties shall continue to provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this <u>Section 8.14</u> with respect to all matters not subject to such dispute resolution.

(j) <u>Consolidation</u> *.* The arbitrator may consolidate an arbitration under this Agreement with any arbitration arising under or relating to any other agreement between the Parties entered into pursuant hereto, as the case may be, if the subject of the Disputes thereunder arises out of or relates essentially to the same set of facts or transactions. Such consolidated arbitration shall be determined by the arbitrator(s) appointed for the arbitration proceeding that was commenced first in time, and affirmed by the Arbitration Tribunal in the instance of each arbitration thereby being consolidated.

Section 8.15 <u>Severability</u>. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 8.16 <u>Interpretation</u>. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted. When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. References to "dollar" or "$" contained herein are to United States Dollars (unless otherwise specified).

Section 8.17 <u>No Waiver</u>. No failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof or thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

***Signature Page Follows.***

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

---

| |
|:---|
| **FG GROUP HOLDINGS, INC.** |
| By: |
| Name: |
| Title: |
| **STRONG GLOBAL ENTERTAINMENT, INC.** |
| By: |
| Name: |
| Title: |

---

**<u>Schedule A</u>**

**Services and Facilities of FG Group Holdings** 

The following are the Services to be provided by FG Group Holdings to Strong Global:

[\*\*\*]

The following are the Facilities to be provided by FG Group Holdings to STS:

[\*\*\*]

**<u>Schedule B</u>**

**Services and Facilities of Strong Global**

The following are the Services to be provided by Strong Global to FG Group Holdings:

[\*\*\*]

The following are the Facilities to be provided by Strong Global to FG Group Holdings:

[\*\*\*]

## Exhibit 10.10

**Exhibit 10.10**

**STRONG GLOBAL ENTERTAINMENT, INC.**

**2023** **sHARE COMPENSATION PLAN**

**(Adopted by the Board of Directors of Strong Global Entertainment, Inc. on April 4, 2022 and approved by Shareholders on June 11, 2022)**

**1.** **DEFINITIONS AND INTERPRETATION** 

1.1 **Definitions:** For purposes of the Plan, unless the context requires otherwise, the following words and terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**1933 Act**" means the United States Securities Act of 1933, as amended;

(b) "**Account** "
 has the meaning attributed to that term in section 4.8;

(c) "**Administrators** "
 means the Board or such other persons as may be designated by the Board from time to time;

(d) "**Affiliate** "
 means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under
 common control with, the Company.

(e) "**Award Date**" means the date or dates on which an award of Restricted Share Units is made to a Participant in accordance with section
 4.1;

(f) "**Blackout Period**" means the period during which designated directors, officers and employees of the Company cannot trade the Common
 Shares pursuant to the Company's policy respecting restrictions on directors', officers' and employee trading which
 is in effect at that time (which, for greater certainty, does not include the period during which a cease trade order is in effect
 to which the Company or in respect of an insider, that insider is subject);

(g) "**Board** "
 means the board of directors of the Company from time to time;

(h) "**Business Day**" means each day other than a Saturday, Sunday or any day on which the principal chartered banks located in the Province
 of British Columbia and the United States are not open for business during normal banking hours;

(i) "**Canadian Participant**" means a Participant who is a citizen of Canada or a resident of Canada and any other Participant who is subject
 to tax under the Income Tax Act (Canada) as amended, with respect to compensatory awards granted pursuant to the Plan;

(j) **Change of Control**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) one
 Person (or more than one Person acting as a group) acquires ownership of Common Shares that, together with the Common Shares held
 by such Person or group, constitute more than fifty percent (50%) of the total Fair Market Value, or total number of votes attached
 to outstanding voting shares of the Company; provided, that, a Change in Control shall not occur if any Person (or more than one
 Person acting as a group) owns Common Shares constituting more than fifty percent (50%) of the total Fair Market Value, or total
 number of votes attached to outstanding voting shares, of the Company and acquires additional Common Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 Incumbent Directors cease for any reason to constitute at least a majority of the Board;

(iii) the
 occurrence of any of the following events upon which the shareholders of the Company immediately before the event do not retain immediately
 after the event direct or indirect beneficial ownership of more than fifty percent (50%) of the total voting rights attaching to
 the outstanding voting shares of the Company, its successor company, or organization succeeding to all or substantially all of the
 assets and business of the Company;

(iv) a
 reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that
 requires shareholder approval; or

(v) the
 direct or indirect sale, exchange, transfer, or conveyance in one or a series of related transactions, of all or substantially all
 of the, undertakings, assets or properties of the Company and its Affiliates, taken as a whole, to any person that is not an Affiliate
 of the Company.

Notwithstanding the foregoing, solely for the purpose of determining the timing of any payments pursuant to any award constituting a "deferral of compensation" subject to Code Section 409A, a Change of Control shall be limited to a "change in the ownership of the Company," a "change in the effective control of the Company," or a "change in the ownership of a substantial portion of the assets of the Company" as such terms are defined in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**Clawback Policy**" means the clawback policy of the Company as determined by the Board, and as it may be amended, replaced, or restated
 from time to time;

(l) **"Code"** means the U.S. Internal Revenue Code of 1986, as amended;

(m) "**Common Shares**" means the Class A Common Voting shares of the Company;

(n) "**Company** "
 means Strong Global Entertainment, Inc., a company existing under the *Business Corporations Act* (British Columbia) and the
 successors thereof;

(o) "**Consultant** "
 means an individual (other than an employee or a director of the Company) that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) is
 engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Company or to an Affiliate
 of the Company;

(B) such
 services are not provided in relation to an offer or sale of securities of the Company in a capital-raising transaction, and do not
 promote or maintain a market for the Company's securities; without limiting the foregoing, consultants providing investor relations
 services are not Consultants or Eligible Persons under the Plan;

(C) provides
 the services under a written contract between the Company or the Affiliate and the individual or the company, as the case may be;

(D) in
 the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business
 of the Company or an Affiliate of the Company; and

(E) has
 a relationship with the Company or an Affiliate of the Company that enables the individual to be knowledgeable about the business
 and affairs of the Company;

(p) "**Effective Date**" means **[●]**;

(q) "**Eligible Person**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any
 officer or employee of the Company and/or any officer or employee of any Affiliate of the Company and any director of the Company
 and/or any director of any Affiliate of the Company; and

(ii) a
 Consultant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Event of Termination**" means an event whereby a Participant ceases to be an Eligible Person (whether or not that cessation is
 lawful) and shall be deemed to have occurred effective upon the giving of any notice of termination of employment or service (whether
 or not that termination is lawful, whether voluntary or involuntary, and whether with or without cause), retirement, or any cessation
 of employment or service for any reason whatsoever, including disability or death;

(s) "**Exchange** "
 means any stock exchange or quotation system where the Common Shares are listed on or through which the Common Shares are listed
 or quoted;

(t) "**Fair Market Value**" means, as of any date, the closing price of the Common Shares on the Exchange for the last market trading
 day prior to the date of grant of the Option or if the Common Shares are not listed on a stock exchange, the Fair Market Value shall
 be determined in good faith by the Administrators

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Grant Date**" means the date on which a grant of Options is made to a Participant in accordance with section 5.1;

(v) "**Insider Participant**" means a Participant who is an insider of the Company or any of its Affiliates);

(w) "**Market Value**" means, on any date, the volume weighted average price of the Common Shares traded on the Exchange for the five (5)
 consecutive trading days prior to such date;

(x) "**Notification Date**" means:

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) where
 a Participant who is an employee or officer or director resigns for any reason whatsoever from the Participant's employment
 or office with the Company or any Affiliate of the Company, the date on which that Participant first gives notice of resignation
 to the Company or the Affiliate;

(ii) where
 a Participant who is a consultant terminates their service with the Company or any Affiliate for any reason whatsoever, the date
 on which that Participant first gives notice of termination to the Company or the Affiliate;

(iii) where
 a Participant's employment or service or office is terminated by the Company or any Affiliate of the Company for any reason
 whatsoever, the date on which the Company or that Affiliate first gives written notice of termination to the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) "**Offer** "
 means a bona fide arm's length offer made to all holders of voting shares in the authorized share structure of the Company
 to purchase, directly or indirectly, voting shares in the authorized share structure of the Company;

(z) "**Option** "
 means an option granted to an Eligible Person under the Plan to purchase Common Shares;

(aa) "**Option Agreement**" has the meaning ascribed to that term in section 3.2;

(bb) "**Other Share-Based Award**" means an equity-based or equity-related award not otherwise described by the terms of the Plan, granted
 in accordance with the terms and conditions set forth in section 1;

(cc) "**Participant** "
 means an Eligible Person selected by the Administrators to participate in the Plan in accordance with section 3.1 hereof;

(dd) "**Payout Date**" means the day on which the Company pays to a Participant the Market Value of the Restricted Share Units that have
 become vested and payable;

(ee) "**Plan** "
 means this share compensation plan, as amended, replaced or restated from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) "**reserved for issuance**" refers to Common Shares that may be issued in the future upon the vesting of Restricted Share Units which
 have been awarded and upon the exercise of Options which have been granted;

(gg) "**Restricted Share Unit**" means a right granted in accordance with section 4.1 hereof to receive one Common Share that becomes vested
 in accordance with section 4.3;

(hh) "**Restricted Share Unit Agreement**" has the meaning ascribed to that term in section 3.2;

(ii) "**Restricted Share Unit Deferral Agreement**" has the meaning ascribed to that term in section 4.5;

(jj) "**Share Compensation Arrangement**" means a stock option, stock option plan, employee stock purchase plan or any other compensation
 or incentive mechanism involving the issuance or potential issuance of Common Shares to directors, officers and employees of the
 Company and any of its Affiliates or to Consultants;

(kk) "**United States**" means the United States of America, its territories and possessions, any state of the United States and the District
 of Columbia;

(ll) "**U.S. Participant**" means a Participant who is a citizen of the United States or a resident of the United States, as defined in
 section 7701(a)(30)(A) and section 7701(b)(1) of the Code and any other Participant who is subject to tax under the Code with respect
 to compensatory awards granted pursuant to the Plan;

(mm) "**U.S. Person**" means a "U.S. person", as such term is defined in Regulation S under the 1933 Act; and

(nn) "**Withholding Obligations**" has the meaning ascribed to that term in section 4.6.

1.2 **Headings:** The headings of all articles, sections, and paragraphs in the Plan are inserted for convenience of reference only and shall not
 affect the construction or interpretation of the Plan.

1.3 **Context, Construction:** Whenever the singular or masculine are used in the Plan, the same shall be construed as being the plural or feminine
 or neuter or vice versa where the context so requires.

1.4 **References to this Plan:** The words "hereto", "herein", "hereby", "hereunder", "hereof"
 and similar expressions mean or refer to the Plan as a whole and not to any particular article, section, paragraph or other part
 hereof.

1.5 **Currency:** All references in this Plan or in any agreement entered into under this Plan to "dollars", "$" or lawful
 currency shall be references to United States dollars, unless the context otherwise requires.

**2.** **PURPOSE AND ADMINISTRATION OF THE PLAN** 

2.1 **Purpose:** The purpose of the Plan is to advance the interests of the Company and its Affiliates, and its shareholders by: (i) ensuring
 that the interests of Eligible Persons are aligned with the success of the Company and its Affiliates; (ii) encouraging stock ownership
 by Eligible Persons; and (iii) providing compensation opportunities to attract, retain and motivate Eligible Persons.

2.2 **Common Shares Subject to the Plan:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Shares Available for Awards**. Subject to adjustment in accordance with Section 6.3, the aggregate number of Common Shares reserved and
 available for grant and issuance pursuant to this Plan shall be 2,000,000 Common Shares. Common Shares available for distribution
 under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company
 in any manner;

(b) **Non-Employee Director Limits**. Notwithstanding any other provision of the Plan to the contrary, the aggregate Fair Market Value (computed as
 of the Grant Date in accordance with applicable financial accounting rules) of all awards granted to any non-employee director during
 any single calendar year, taken together with any cash fees paid to such person during such calendar year, shall not exceed $200,000.

2.3 **Administration of the Plan:** The Plan shall be administered by the Administrators, through the recommendation of the Compensation Committee of
 the Board. Subject to any limitations of the Plan, the Administrators shall have the power and authority to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) adopt
 rules and regulations for implementing the Plan;

(b) determine
 the eligibility of persons to participate in the Plan, when Restricted Share Units and Options to Eligible Persons shall be awarded
 or granted, the number of Restricted Share Units and Options to be awarded or granted, the vesting criteria for each award of Restricted
 Share Units and the vesting period for each grant of Options;

(c) interpret
 and construe the provisions of the Plan and any agreement or instrument under the Plan;

(d) subject
 to regulatory requirements, make exceptions to the Plan in circumstances which they determine to be exceptional;

(e) require
 that any Participant provide certain representations, warranties and certifications to the Company to satisfy the requirements of
 applicable laws, including without limitation, if applicable, exemptions from the registration requirements of the 1933 Act and applicable
 state securities laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) make
 all other determinations and take all other actions as they determine to be necessary or desirable to implement, administer and give
 effect to the Plan.

**3.** **ELIGIBILITY AND PARTICIPATION IN PLAN** 

3.1 **The Plan and Participation:** The Plan is hereby established for Eligible Persons. Restricted Share Units may be awarded and Options
 may be granted to any Eligible Person as determined by the Administrators in accordance with the provisions hereof. The Company and
 each Participant acknowledge that they are responsible for ensuring and confirming that such Participant is a bona fide Eligible
 Person entitled to receive Options or Restricted Share Units, as the case may be. Participation in the Plan by Eligible Persons is
 voluntary, and the expectation of employment or continued employment does not depend on participation in the Plan.

3.2 **Agreements:** All Restricted Share Units awarded hereunder shall be evidenced by a restricted share unit agreement ()"**Restricted Share Unit Agreement**") between the Company and the Participant, substantially in the form set out in Exhibit A or in such other
 form as the Administrators may approve from time to time. All Options granted hereunder shall be evidenced by an option agreement
 ()"**Option Agreement**") between the Company and the Participant, substantially in the form as set out in Exhibit
 B or in such other form as the Administrators may approve from time to time.

**4.** **AWARD OF RESTRICTED SHARE UNITS** 

4.1 **Award of Restricted Share Units:** 

The Administrators may, at any time and from time to time, award Restricted Share Units to Eligible Persons. In awarding any Restricted Share Units, the Administrators shall determine:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to
 whom Restricted Share Units pursuant to the Plan will be awarded;

(b) the
 number of Restricted Share Units to be awarded and credited to each Participant's Account;

(c) the
 Award Date; and

(d) subject
 to section 4.3 hereof, the applicable vesting criteria.

Upon the award of Restricted Share Units, the number of Restricted Share Units awarded to a Participant shall be credited to the Participant's Account effective as of the Award Date.

4.2 **Restricted Share Unit Agreement:** Upon the award of each Restricted Share Unit to a Participant, a Restricted Share Unit Agreement shall
 be delivered by the Administrators to the Participant.

4.3 **Vesting:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject
 to subsections (c) and (d) below, at the time of the award of Restricted Share Units, the Administrators shall determine in their
 sole discretion the vesting criteria applicable to such Restricted Share Units.

(b) For
 greater certainty, the vesting of Restricted Share Units may be determined by the Administrators to include criteria such as performance
 vesting, in which the number of Common Shares to be delivered to a Participant for each Restricted Share Unit that vests may fluctuate
 based upon the Company's performance and/or the market price of the Common Shares, in such manner as determined by the Administrators
 in their sole discretion.

(c) Each
 Restricted Share Unit shall be subject to vesting in accordance with the terms set out in the Restricted Share Unit Agreement.

(d) Notwithstanding
 anything to the contrary in this Plan, all vesting and issuances or payments, as applicable, in respect of a Restricted Share Unit
 shall be completed no later than December 15 of the third calendar year commencing after the Award Date for such Restricted Share
 Unit.

4.4 **Blackout Periods:** Should the date of vesting of a Restricted Share Unit fall within a Blackout Period or within nine Business Days following
 the expiration of a Blackout Period, such date of vesting shall be automatically extended without any further act or formality to
 that date which is the tenth Business Day after the end of the Blackout Period, such tenth Business Day to be considered the date
 of vesting for such Restricted Share Unit for all purposes under the Plan. Notwithstanding section 6.4 hereof, the ten Business Day
 period referred to in this section 4.4 may not be extended by the Board.

4.5 **Vesting and Settlement:** As soon as practicable after the relevant date of vesting of any Restricted Share Units awarded under the Plan
 and with respect to a U.S. Participant, no later than 60 days thereafter, but subject to subsection 4.3(d), a Participant shall be
 entitled to receive and the Company shall issue or pay (at its discretion):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a
 lump sum payment in cash equal to the number of vested Restricted Share Units recorded in the Participant's Account multiplied
 by the Market Value of a Common Share on the Payout Date;

(b) the
 number of Common Shares required to be issued to a Participant upon the vesting of such Participant's Restricted Share Units
 in the Participant's Account, duly issued as fully paid and non-assessable shares and such Participant shall be registered
 on the books of the Company as the holder of the appropriate number of Common Shares; or

(c) any
 combination of the foregoing.

Notwithstanding the foregoing, the Administrators may permit a U.S. Participant to defer the payment of shares following the vesting of Restricted Share Units, provided that such deferral is made pursuant to a written deferral election form (the "**Restricted Share Unit Deferral Agreement**") between the Company and the U.S. Participant that complies with the requirements of Section 409A of the Code, substantially in the form as set out in Exhibit D or in such other form as the Administrators may approve from time to time.

4.6 **Taxes and Source Deductions**: the Company or an affiliate of the Company may take such reasonable steps for the deduction and withholding
 of any taxes and other required source deductions which the Company or the affiliate, as the case may be, is required by any law
 or regulation of any governmental authority whatsoever to remit in connection with this Plan, any Restricted Share Units or any issuance
 of Common Shares ()"**Withholding Obligations** "). Without limiting the generality of the foregoing, the Company may,
 at its discretion: (i) deduct and withhold those amounts it is required to remit pursuant to the Withholding Obligations from any
 cash remuneration or other amount payable to the Participant, whether or not related to the Plan, the vesting of any Restricted Share
 Units or the issue of any Common Shares; (ii) allow the Participant to make a cash payment to the Company equal to the amount required
 to be remitted, pursuant to the Withholding Obligations, which amount shall be remitted by the Company to the appropriate governmental
 authority for the account of the Participant; or (iii) settle a portion of vested Restricted Share Units of a Participant in cash
 equal to the amount the Company is required to remit, pursuant to the Withholding Obligations, which amount shall be remitted by
 the Company to the appropriate governmental authority for the account of the Participant. Where the Company considers that the steps
 undertaken in connection with the foregoing result in inadequate withholding or a late remittance of taxes, the delivery of any Common
 Shares to be issued to a Participant on vesting of any Restricted Share Units may be made conditional upon the Participant (or other
 person) reimbursing or compensating the Company or making arrangements satisfactory to the Company for the payment to it in a timely
 manner of all taxes required to be remitted, pursuant to the Withholding Obligations, for the account of the Participant.

4.7 **Rights Upon an Event of Termination:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If
 an Event of Termination has occurred in respect of any Participant, any and all Common Shares corresponding to any vested Restricted
 Share Units in the Participant's Account shall be issued as soon as practicable after the Event of Termination to the former
 Participant in accordance with section 4.5 hereof. With respect to each Restricted Share Unit of a U.S. Participant, such Restricted
 Share Unit will be settled and shares issued as soon as practicable following the date of vesting of such Restricted Share Unit as
 set forth in the applicable Restricted Share Unit Agreement, but in all cases within 60 days following such date of vesting or as
 otherwise specified in the applicable Restricted Share Unit Deferral Agreement.

(b) If
 an Event of Termination has occurred in respect of any Participant, any unvested Restricted Share Units in the Participant's
 Account shall, unless otherwise determined by the Administrators in their discretion, forthwith and automatically be forfeited by
 the Participant and cancelled as of the date of the Event of Termination. With respect to any Restricted Share Unit of a U.S. Participant,
 if the Administrators determine, in their discretion, to waive vesting conditions applicable to a Restricted Share Unit that is unvested
 at the time of an Event of Termination, such Restricted Share Unit shall not be forfeited or cancelled, but instead will be deemed
 to be vested and settled and shares delivered following the date of vesting of such Restricted Share Unit as set forth in the applicable
 Restricted Share Unit Agreement or as otherwise specified in the applicable Restricted Share Unit Deferral Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding
 the foregoing subsection 4.7(b), if a Participant retires in accordance with the Company's or the Affiliate's retirement
 policy, at such time, any unvested performance-based Restricted Share Units in the Participant's Account shall not be forfeited
 by the Participant or cancelled and instead shall be eligible to become vested in accordance with the vesting conditions set forth
 in the applicable Restricted Share Unit Agreement after such retirement (as if retirement had not occurred) or as otherwise specified
 in the applicable Restricted Share Unit Deferral Agreement, but only if the performance vesting criteria, if any, are met on the
 applicable date.

(d) For
 greater certainty, if a Participant's employment is terminated for just cause, each unvested Restricted Share Unit in the Participant's
 Account shall forthwith and automatically be forfeited by the Participant and cancelled as of the date of the Event of Termination.

(e) For
 the purposes of this Plan and all matters relating to the Restricted Share Units, the date of the Event of Termination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) shall
 be the Notification Date where applicable, and otherwise shall be such date as is determined by the Company or the Affiliate, as
 applicable, in its sole discretion; and,

(ii) shall
 be determined without regard to any applicable notice of termination, severance or termination pay, compensation or indemnity in
 lieu of notice, wrongful or constructive dismissal damages, damages for the failure to provide reasonable notice, period of salary
 continuation or of deemed employment or of deemed service, or any claim whatsoever by the Participant to any of the foregoing (whether
 express, implied, contractual, statutory, arising at civil law, common law or otherwise at law in any manner).

4.8 **Restricted Share Unit Accounts:** A separate notional account for Restricted Share Units shall be maintained for each Participant (an "**Account** ").
 Each Account will be credited with Restricted Share Units awarded to the Participant from time to time pursuant to section 4.1 hereof
 by way of a bookkeeping entry in the books of the Company. On the vesting of the Restricted Share Units pursuant to section 4.3 hereof
 and the corresponding issuance of Common Shares to the Participant pursuant to section 4.5 hereof, or on the forfeiture and cancellation
 of the Restricted Share Units pursuant to section 4.7 hereof, the applicable Restricted Share Units credited to the Participant's
 Account will be cancelled.

4.9 **Record Keeping:** the Company shall maintain records in which shall be recorded:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 name and address of each Participant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 number of Restricted Share Units credited to each Participant's Account;

(c) any
 and all adjustments made to Restricted Share Units recorded in each Participant's Account; and

(d) any
 other information which the Company considers appropriate to record in such records.

---

| | |
|:---|:---|
| **5.** | **GRANT OF OPTIONS** |
| 5.1 | **Grant of Options:** Subject to section 2.2, the total number of Common Shares reserved and available for grant pursuant to this section on exercise of Options (together with those Common Shares issuable pursuant to any other Share Compensation Arrangement) shall not exceed 2,000,000 Common Shares. |
|  | The Administrators may at any time and from time to time grant Options to Eligible Persons. In granting any Options, the Administrators shall determine: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to
 whom Options pursuant to the Plan will be granted;

(b) the
 number of Options to be granted, the Grant Date and the exercise price of each Option;

(c) the
 expiration date of each Option; and

(d) subject
 to section 5.3 hereof, the applicable vesting criteria,

---

| | |
|:---|:---|
|  | provided, however that the exercise price for a Common Share pursuant to any Option shall not be less than the Fair Market Value of a Common Share on the Grant Date in respect of that Option. |
| 5.2 | **Option Agreement:** Upon each grant of Options to a Participant, an Option Agreement shall be delivered by the Administrators to the Participant. |
| 5.3 | **Vesting:** |
|  | The Administrators may determine when any Option will become exercisable and may determine that Options shall be exercisable in instalments or pursuant to a vesting schedule. The Option Agreement will disclose any vesting conditions prescribed by the Administrators. |

---

5.4 **Term of Option/Blackout Periods:** The term of each Option shall be determined by the Administrators; provided that no Option shall
 be exercisable after ten years from the Grant Date. Should the term of an Option expire on a date that falls within a Blackout Period
 or within nine Business Days following the expiration of a Blackout Period, such expiration date shall be automatically extended
 without any further act or formality to that date which is the tenth Business Day after the end of the Blackout Period, such tenth
 Business Day to be considered the expiration date for such Option for all purposes under the Plan. Notwithstanding section 6.4 hereof,
 the ten Business Day period referred to in this section 5.4 may not be extended by the Board.

---

| | |
|:---|:---|
| 5.5 | **Exercise of Option:** |
|  | Options that have vested in accordance with the provisions of this Plan and the applicable Option Agreement may be exercised at any time, or from time to time, during their term and subject to the provisions of section 5.9 hereof as to any number of whole Common Shares that are then available for purchase thereunder; provided that no partial exercise may be for less than 100 whole Common Shares. Options may be exercised by delivery of a written notice of exercise to the Administrators, substantially in the form attached to this Plan as Exhibit C, with respect to the Options, or by any other form or method of exercise acceptable to the Administrators. |

---

5.6 **Payment and Issuance:** Upon actual receipt by the Company or its agent of the materials required by subsection 5.5 and receipt by the
 Company of a cheque or other form of acceptable payment for the aggregate exercise price, the number of Common Shares in respect
 of which the Options are exercised will be issued as fully paid and non-assessable shares and the Participant exercising the Options
 shall be registered on the books of the Company as the holder of the appropriate number of Common Shares. No person or entity shall
 enjoy any part of the rights or privileges of a holder of Common Shares which are subject to Options until that person or entity
 becomes the holder of record of those Common Shares. No Common Shares will be issued by the Company prior to the receipt of payment
 by the Company for the aggregate exercise price for the Options being exercised.

5.7 **Cashless Exercise:** Without limiting the foregoing section 5.6, unless otherwise determined by the Administrators or not compliant with
 any applicable laws or rules of any applicable securities exchange or market, a Participant may elect a cashless exercise in a notice
 of exercise in accordance with the following: (i) cashless exercise of Options shall only be available to a Participant who intends
 to immediately sell the Common Shares issuable upon exercise of such Options in the United States and the proceeds of sale will be
 sufficient to satisfy the exercise price of the Options, and (ii) if an eligible Participant elects to exercise the Options through
 cashless exercise and complies with any relevant protocols approved by the Administrators, a sufficient number of the Common Shares
 issued upon exercise of the Options will be sold in the United States by a designated broker on behalf of the Participant to satisfy
 the exercise price of the Options, the exercise price of the Options will be delivered to the Company and the Participant will receive
 only the remaining unsold Common Shares from the exercise of the Options and the net proceeds of the sale after deducting the exercise
 price of the Options, applicable taxes and any applicable fees and commissions, all as determined by the Administrators from time
 to time. The Company shall not deliver the Common Shares issuable upon a cashless exercise of Options until receipt of the exercise
 price therefor, whether by a designated broker selling the Common Shares issuable upon exercise of such Options through a short position
 or such other method determined by the Administrators in compliance with applicable laws.

5.8 **Taxes and Source Deductions**: The Company or an affiliate of the Company may take such reasonable steps for the deduction and withholding
 of any taxes and other required source deductions which the Company or the affiliate, as the case may be, is required by any law
 or regulation of any governmental authority whatsoever to remit pursuant to the Withholding Obligations in connection with this Plan,
 any Options or any issuance of Common Shares. Without limiting the generality of the foregoing, the Company may, at its discretion:
 (i) deduct and withhold those amounts it is required to remit, pursuant to the Withholding Obligations, from any cash remuneration
 or other amount payable to the Participant, whether or not related to the Plan, the exercise of any Options or the issue of any Common
 Shares; or (ii) allow the Participant to make a cash payment to the Company equal to the amount required to be remitted, pursuant
 to the Withholding Obligations, which amount shall be remitted by the Company to the appropriate governmental authority for the account
 of the Participant. Where the Company considers that the steps undertaken in connection with the foregoing result in inadequate withholding
 or a late remittance of taxes, the delivery of any Common Shares to be issued to a Participant on the exercise of Options may be
 made conditional upon the Participant (or other person) reimbursing or compensating the Company or making arrangements satisfactory
 to the Company for the payment in a timely manner of all taxes required to be remitted, pursuant to the Withholding Obligations,
 for the account of the Participant.

5.9 **Rights Upon an Event of Termination:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If
 an Event of Termination has occurred in respect of a Participant, any unvested Options, to the extent not available for exercise
 as of the date of the Event of Termination, shall, unless otherwise determined by the Administrators in their discretion, forthwith
 and automatically be cancelled, terminated and not available for exercise without further consideration or payment to the Participant.

(b) Except
 as otherwise stated herein or otherwise determined by the Administrators in their discretion (provided such determination does not
 exceed a maximum of one year), upon the occurrence of an Event of Termination in respect of a Participant, any vested Options granted
 to the Participant that are available for exercise as of the date of the Event of Termination may be exercised only before the earlier
 of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 expiration of the Option; and

(ii) six
 months after the date of the Event of Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding
 the foregoing subsections 5.9(a) and (b), if a Participant's employment is terminated for just cause, each Option held by the
 Participant as of the date of the Event of Termination, whether or not then exercisable, shall forthwith and automatically be cancelled
 and may not be exercised by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) For
 the purposes of this Plan and all matters relating to the Options, the date of the Event of Termination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) shall
 be the Notification Date where applicable, and otherwise shall be such date as is determined by the Company or the Affiliate, as
 applicable, in its sole discretion; and,

(ii) shall
 be determined without regard to any applicable notice of termination, severance or termination pay, compensation or indemnity in
 lieu of notice, wrongful or constructive dismissal damages, damages for the failure to provide reasonable notice, period of salary
 continuation or of deemed employment or of deemed service, or any claim whatsoever by the Participant to any of the foregoing (whether
 express, implied, contractual, statutory, arising at civil law, common law or otherwise at law in any manner).

5.10 **Record Keeping:** The Company shall maintain an Option register in which shall be recorded:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 name and address of each holder of Options;

(b) the
 number of Common Shares subject to Options granted to each holder of Options;

(c) the
 term of the Option and exercise price, including adjustments for each Option granted; and

(d) any
 other information which the Company considers appropriate to record in such register.

**6.** **GENERAL** 

6.1 **Effective Date of Plan:** The Plan shall be effective as of the Effective Date.

6.2 **Change of Control:** If there is a Change of Control transaction then, notwithstanding any other provision of this Plan except subsection
 4.3(d) which will continue to apply in all circumstances, the Administrators may take any of the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Administrators Discretion</u>. The Administrators may, in their sole discretion and without the consent of Participants, either by the terms of
 the Award Agreement applicable to any award or by resolution adopted prior to the occurrence of the Change of Control, determine
 whether and to what extent outstanding awards under the Plan shall be assumed, converted or replaced by the resulting entity in connection
 with a Change of Control (or, if the Company is the resulting entity, whether such awards shall be continued by the Company), in
 each case subject to equitable adjustments in accordance with section 6.2 of the Plan.

(b) <u>Awards that are Assumed</u>. To the extent outstanding awards granted under this Plan are assumed, converted or replaced by the resulting
 entity in the event of a Change of Control (or, if the Company is the resulting entity, to the extent such awards are continued by
 the Company) as provided in Section 6.2(a) of the Plan, then all outstanding awards shall continue to vest during the applicable
 vesting period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Awards that are not Assumed</u>. Subject to Section 6.2(d), to the extent outstanding awards granted under this Plan are not assumed, converted
 or replaced by the resulting entity in connection with a Change of Control (or, if the Company is the resulting entity, to the extent
 such awards are not continued by the Company) in accordance with Section 6.2(b) of the Plan, then effective immediately prior to
 the Change of Control: (i) all outstanding awards shall become fully vested; (ii) all outstanding awards held by the Participant
 that may be exercised shall become fully exercisable and shall remain exercisable for the full duration of their term; and (iii)
 all restrictions with respect to outstanding awards shall lapse.

(d) <u>Cancellation Right</u>. The Administrators may, in their sole discretion and without the consent of Participants, either by the terms of the Award
 Agreement applicable to any award or by resolution adopted prior to the occurrence of the Change of Control, provide Participants
 with the right to surrender any outstanding award (or a portion thereof), upon the occurrence of such Change of Control, for an amount
 per underlying Common Share equal to the positive difference, if any, between the Fair Market Value of the Common Share on the date
 of surrender and the relevant exercise price related to the award, less any withholding taxes, as applicable.

---

| | |
|:---|:---|
|  | Notwithstanding the foregoing, with respect to Options of U.S. Participants, any exchange, substitution or amendment of such Options will occur only to the extent and in a manner that will not result in the imposition of taxes under Section 409A of the Code, and with respect to Restricted Share Units of U.S. Participants, any surrender or other modification of Restricted Share Units will occur only to the extent such surrender or other modification will not result in the imposition of taxes under Section 409A of the Code. |
| 6.3 | **Reorganization Adjustments:** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In
 the event of any declaration by the Company of any stock dividend payable in securities (other than a dividend which may be paid
 in cash or in securities at the option of the holder of Common Shares), or any subdivision or consolidation of Common Shares, reclassification
 or conversion of Common Shares, or any combination or exchange of securities, merger, consolidation, recapitalization, amalgamation,
 plan of arrangement, reorganization, spin off involving the Company, distribution (other than normal course cash dividends) of company
 assets to holders of Common Shares, or any other corporate transaction or event involving the Company or the Common Shares, the Administrators,
 in the Administrators' sole discretion, may, subject to any relevant resolutions of the Board, and without liability to any
 person, make such changes or adjustments, if any, as the Administrators consider fair or equitable, in such manner as the Administrators
 may determine, to reflect such change or event including, without limitation, adjusting the number of Options and Restricted Share
 Units outstanding under this Plan, the type and number of securities or other property to be received upon exercise or redemption
 thereof, and the exercise price of Options outstanding under this Plan, provided that the value of any Option or Restricted Share
 Unit immediately after such an adjustment, as determined by the Administrators, shall not exceed the value of such Option or Restricted
 Share Unit prior thereto, as determined by the Administrators.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding
 the foregoing, with respect to Options and Restricted Share Units of U.S. Participants, such changes or adjustments will be made
 in a manner so as to not result in the imposition of taxes under Section 409A of the Code and will comply with the requirements in
 subsection 4.3(d).

(c) The
 Company shall give notice to each Participant in the manner determined, specified or approved by the Administrators of any change
 or adjustment made pursuant to this section and, upon such notice, such adjustment shall be conclusive and binding for all purposes.

(d) The
 Administrators may from time to time adopt rules, regulations, policies, guidelines or conditions with respect to the exercise of
 the power or authority to make changes or adjustments pursuant to section 6.2 or section 6.3(a). The Administrators, in making any
 determination with respect to changes or adjustments pursuant to section 6.2 or section 6.3(a) shall be entitled to impose such conditions
 as the Administrators consider or determine necessary in the circumstances, including conditions with respect to satisfaction or
 payment of all applicable taxes (including, but not limited to, withholding taxes).

---

| | |
|:---|:---|
| 6.4 | **Amendment or Termination of Plan:** |
|  | The Board may amend this Plan or any Restricted Share Unit or any Option at any time without the consent of Participants provided that such amendment shall: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) not
 adversely alter or impair any Restricted Share Unit previously awarded or any Option previously granted except as permitted by the
 provisions of section 6.3 hereof, and, with respect to Restricted Share Units and Options of U.S. Participants, such amendment will
 not result in the imposition of taxes under Section 409A;

(b) be
 subject to any regulatory approvals including, where required, the approval of the Exchange; and

(c) be
 subject to shareholder approval, where required by the requirements of the Exchange, provided that shareholder approval shall not
 be required for the following amendments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) amendments
 of a "housekeeping nature", including any amendment to the Plan or a Restricted Share Unit or Option that is necessary
 to comply with applicable laws, tax or accounting provisions or the requirements of any regulatory authority or stock exchange and
 any amendment to the Plan or a Restricted Share Unit or Option to correct or rectify any ambiguity, defective provision, error or
 omission therein, including any amendment to any definitions therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) amendments
 that are necessary or desirable for Restricted Share Units or Options to qualify for favourable treatment under any applicable tax
 law;

(iii) a
 change to the vesting provisions of any Restricted Share Unit or any Option (including any alteration, extension or acceleration
 thereof);

(iv) a
 change to the termination provisions of any Option or Restricted Share Units (for example, relating to termination of employment,
 resignation, retirement or death) that does not entail an extension beyond the original expiration date (as such date may be extended
 by virtue of section 5.4);

(v) the
 introduction of features to the Plan that would permit the Company to, instead of issuing Common Shares from treasury upon the vesting
 of the Restricted Share Units, retain a broker and make payments for the benefit of Participants to such broker who would purchase
 Common Shares in the open market for such Participants;

(vi) the
 amendment of this Plan as it relates to making lump sum payments to Participants upon the vesting of the Restricted Share Units;

(vii) the
 amendment of the cashless exercise feature set out in this Plan; and

(viii) change
 the application of section 6.3 hereof (Reorganization Adjustments) and section 6.2 (Change of Control), and

---

| | |
|:---|:---|
| (d) | be subject to disinterested shareholder approval in the event of any reduction in the exercise price of any Option granted under the Plan to an Insider Participant. |
| For greater certainty, shareholder approval shall be required in circumstances where an amendment to the Plan would: | For greater certainty, shareholder approval shall be required in circumstances where an amendment to the Plan would: |
| (a) | change from a fixed maximum percentage of issued and outstanding Common Shares to a fixed maximum number of Common Shares; |
| (b) | increase the limits in section 2.2; |
| (c) | reduce the exercise price of any Option (including any cancellation of an Option for the purpose of reissuance of a new Option at a lower exercise price to the same person); |
| (d) | extend the term of any Option beyond the original term (except if such period is being extended by virtue of section 5.4 hereof); or |
| (e) | amend this section 6.4. |

---

6.5 **Termination:** The Administrators may terminate this Plan at any time in their absolute discretion. If the Plan is so terminated, no further
 Restricted Share Units shall be awarded and no further Options shall be granted, but the Restricted Shares Units then outstanding
 and credited to Participants' Accounts and the Options then outstanding shall continue in full force and effect in accordance
 with the provisions of this Plan. Any termination of this Plan shall occur in a manner that will not result in the imposition of
 taxes on a U.S. Participant under Section 409A.

6.6 **Transferability:** A Participant shall not be entitled to transfer, assign, charge, pledge or hypothecate, or otherwise alienate, whether by operation
 of law or otherwise, the Participant's Restricted Share Units or Options or any rights the Participant has under the Plan.

6.7 **Rights as a Shareholder:** Under no circumstances shall the Restricted Share Units or Options be considered Common Shares nor shall they
 entitle any Participant to exercise voting rights or any other rights attaching to the ownership of Common Shares (including, but
 not limited to, the right to dividend equivalent payments).

6.8 **Credits for Dividends:** Unless otherwise determined by the Administrators, whenever cash or other dividends are paid on Common Shares,
 additional Restricted Share Units will be automatically granted to each Participant who holds Restricted Share Units on the record
 date for such dividends. The number of such Restricted Share Units (rounded to the nearest whole Restricted Share Units) to be credited
 to such Participant as of the date on which the dividend is paid on the Common Shares shall be an amount equal to the quotient obtained
 when (i) the aggregate value of the cash or other dividends that would have been paid to such Participant if the Participant's
 Restricted Share Units as of the record date for the dividend had been Common Shares, is divided by (ii) the Market Value of the
 Common Shares as of the date on which the dividend is paid on the Common Shares. Restricted Share Units granted to a Participant
 shall be subject to the same vesting conditions (time and performance (as applicable)) as the Restricted Share Units to which they
 relate.

6.9 **No Effect on Employment or Service, Rights or Benefits:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 terms of employment or service shall not be affected by participation in the Plan.

(b) Nothing
 contained in the Plan shall confer or be deemed to confer upon any Participant the right to continue as a director, officer, employee
 or Consultant nor interfere or be deemed to interfere in any way with any right of the Company, the Board or the shareholders of
 the Company to remove any Participant from the Board or of the Company or any Affiliate to terminate any Participant's employment
 or agreement with a Consultant at any time for any reason whatsoever.

(c) Under
 no circumstances shall any person who is or has at any time been a Participant be able to claim from the Company or any Affiliate
 any sum or other benefit, or any damages in lieu of such sum or benefit, to compensate for the loss of any rights or benefits under
 or in connection with this Plan or by reason of participation in this Plan.

6.10 **Market Value of Common Shares:** The Company makes no representation or warranty as to the future market value of any Common Shares. No
 Participant shall be entitled, either immediately or in the future, either absolutely or contingently, to receive or obtain any amount
 or benefit granted to or to be granted for the purpose of reducing the impact, in whole or in part, of any reduction in the market
 value of the shares of the Company or a company related thereto.

6.11 **Compliance with Applicable Law:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If
 any provision of the Plan contravenes any law or any order, policy, by-law or regulation of any regulatory body having jurisdiction,
 then such provision shall be deemed to be amended to the extent necessary to bring such provision into compliance therewith. Notwithstanding
 the foregoing, the Company shall have no obligation to register any securities provided for in this Plan under the 1933 Act.

(b) The
 award of Restricted Share Units, the grant of Options and the issuance of Common Shares under this Plan shall be carried out in compliance
 with applicable statutes and with the regulations of governmental authorities and any applicable stock exchange. If the Administrators
 determine in their discretion that, in order to comply with any such statutes or regulations, certain action is necessary or desirable
 as a condition of or in connection with the award of a Restricted Share Unit, the grant of an Option or the issue of a Common Share
 upon the vesting of a Restricted Share Unit or exercise of an Option, as applicable, that Restricted Share Unit may not vest in whole
 or in part and that Option may not be exercised in whole or in part, as applicable, unless that action shall have been completed
 in a manner satisfactory to the Administrators. In addition, unless the Restricted Share Units, the Options and the Common Shares
 issuable pursuant to the Restricted Share Units and Options, as applicable, have been registered under the 1933 Act and any applicable
 U.S. state securities laws, all rights of a Participant under this Plan shall be subject to and conditioned upon the availability
 of exemptions or exclusions from the registration requirements of the 1933 Act and any applicable U.S. state securities laws, as
 determined by the Company in its sole discretion.

6.12 **Governing Law:** This Plan shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws
 of Canada applicable therein, and with respect to U.S. Participants, the Code.

6.13 **Subject to Approval:** The Plan is adopted subject to the approval of the Exchange and any other required regulatory approval. To the extent
 a provision of the Plan requires regulatory approval which is not received, such provision shall be severed from the remainder of
 the Plan until the approval is received and the remainder of the Plan shall remain in effect.

6.14 **Clawback Provision:** Notwithstanding any other provision of this Plan, any Restricted Share Unit or Option issued, granted, or awarded
 to any Participant, and any Common Shares issued thereunder, and any amount received by any Participant with respect to any such
 Restricted Share Unit, Option, or Common Shares, shall be subject to cancellation, rescission, forfeiture, recovery, or other action
 in accordance with the terms of the Company's Clawback Policy. The Company will have a right to cancel, rescind, or otherwise
 recover from such Participant for the benefit of the Company, and such Participant will be required to forfeit or repay to the Company
 the amount determined by the Administrators in accordance with the Clawback Policy.

**7.** **U.S. TAXPAYERS** 

7.1 **Provisions for U.S. Taxpayers:** In the case of a Participant who is a U.S. taxpayer, Options may only be awarded to such Participant to the
 extent the Participant performs direct services to (A) the Corporation or any entity (other than the Corporation), in an unbroken
 chain of Corporations (or other entities) beginning with the Corporation in which each of the Corporations (or other entities) other
 than the last corporation or other entity in the unbroken chain owns, directly or indirectly, equity representing at least 50% of
 the voting power of all classes of equity entitled to vote or at least 50% of the value of all classes of equity in one of the other
 companies (or other entities) in such chain, or (B) to an entity that otherwise qualifies as an eligible issuer of service recipient
 stock pursuant to U.S. Treasury Regulation Section 1.409A-1(b)(5)(iii)(E)(1). Options granted under this Plan to U.S. taxpayers may
 be non-qualified stock options or incentive stock options qualifying under Section 422 of the Code ("ISOs"). Each Option
 shall be designated in the Award Agreement as either an ISO or a non-qualified stock option, and if no designation is made, the Option
 will be a non-qualified stock option. The Corporation shall not be liable to any Participant or to any other Person if it is determined
 that an Option intended to be an ISO does not qualify as an ISO.

7.2 **ISOs:** Subject to any limitations in Section 2.2, the aggregate number of Shares reserved for issuance in respect of the exercise of
 ISOs shall not exceed 2,000,000 Common Shares, and the terms and conditions of any ISOs granted to a U.S. Taxpayer on the Grant Date
 hereunder, including the eligible recipients of ISOs, shall be subject to the provisions of Section 422 of the Code, and the terms,
 conditions, limitations and administrative procedures established by the Administrator from time to time in accordance with this
 Plan. At the discretion of the Administrator, ISOs may be granted to any employee of the Corporation, or of a "parent corporation"
 or "subsidiary corporation", as such terms are defined in Sections 424(e) and (f) of the Code. No ISOs may be granted
 more than ten (10) years after the earlier of (i) the date on which the Board adopts the most recent amendment and restatement of
 the Plan, or (ii) the date on which the shareholders of the Corporation approve such most recent amendment and restatement of the
 Plan. An ISO may be exercised during the Participant's lifetime only by such the Participant. An ISO may not be transferred,
 assigned, pledged, hypothecated or otherwise disposed of by the Participant, except by will or by the laws of descent and distribution.

7.3 **ISO Term and Exercise Price; Grants to 10% Shareholders**: Notwithstanding anything to the contrary in this Plan, the term of an ISO
 shall not exceed ten (10) years, and the exercise price of an ISO shall be not less than one hundred percent (100%) of the Fair Market
 Value on the applicable grant date; provided, however, that if an ISO is granted to a person who owns shares representing more than
 10% of the voting power of all classes of shares of the Corporation or of a "parent corporation" or "subsidiary
 corporation", as such terms are defined in Section 424(e) and (f) of the Code, on the Grant Date, the term of the ISO shall
 not exceed five years from the time of grant of such ISO and the exercise price shall be at least 110% of the Fair Market Value of
 the Shares subject to the ISO.

7.4 **$100,000 Limit Per Year for ISOs**: To the extent the aggregate Fair Market Value as at the Grant Date of the Shares for which ISOs are
 exercisable for the first time by any person during any calendar year (under all plans of the Corporation) exceeds $100,000, such
 excess ISOs shall be treated as non-qualified stock options.

7.5 **Disqualifying Dispositions**: Each person awarded an ISO under this Plan shall notify the Corporation in writing immediately after the date the
 Participant makes a disposition or transfer of any Shares acquired pursuant to the exercise of such ISO if such disposition or transfer
 is made (a) within two years from the Grant Date or (b) within one year after the date such person acquired the Shares. Such notice
 shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness
 or other consideration, by the person in such disposition or other transfer. The Corporation may, if determined by the Administrator
 and in accordance with procedures established by it, retain possession of any Shares acquired pursuant to the exercise of an ISO
 as agent for the applicable person until the end of the later of the periods described in (a) or (b) above, subject to complying
 with any instructions from such person as to the sale of such Shares.

7.6 **ISO Status Following Termination of Employment**: An ISO shall be exercisable in accordance with its terms under the Plan and the applicable
 Award Agreement or certificate awarding the ISO. However, in order to retain its treatment as an ISO for U.S. federal income tax
 purposes, the ISO must be exercised within the time periods set forth below. If an ISO is not exercised within the time periods below,
 but the Option otherwise would remain exercisable following such time periods pursuant to the terms of the Award Agreement, then,
 following the expiration of the time periods below without exercise the ISO will be converted to a non-qualified stock option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If
 a Participant who has been granted an ISO ceases to be an employee for any reason other than the death or disability (within the
 meaning of Code Section 22(e)) of such Participant, such ISO must be exercised (to the extent such ISO was exercisable on the date
 of termination) by such Participant within three months following the date of termination (but in no event beyond the expiration
 date of such ISO).

(b) If
 a Participant who has been granted an ISO ceases to be an employee due to the disability of such (within the meaning of Code Section
 22(e)), such ISO must be exercised (to the extent it is exercisable by its terms) by the date that is one year following the date
 of such disability, but in no event beyond the expiration date of such ISO.

(c) For
 purposes of this Section 8.6, the employment of a Participant who has been granted an ISO will not be considered interrupted or terminated
 upon (a) sick leave, military leave or any other leave of absence approved by the Corporation that does not exceed ninety (90) days
 in the aggregate; provided, however, that if reemployment upon the expiration of any such leave is guaranteed by contract or applicable
 law, such ninety (90) day limitation will not apply, or (b) a transfer from one office of the Corporation (or of any parent or subsidiary
 of the Corporation as defined in Code Sections 424(e) and (f)) to another office of the Corporation (or of any such parent or subsidiary)
 or a transfer between the Corporation and any such parent or subsidiary.

7.7 **Shareholder Approval for ISO purposes**: In the event the Plan is not approved by the shareholders of the Corporation in accordance with the
 requirements of Section 422 of the Code within twelve (12) months of the date of adoption of the Plan (or the date of any later restatement
 of the Plan that adds or changes ISO provisions requiring shareholder approval), Options otherwise designated as Incentive Stock
 Options will be non-qualified stock options.

7.8 **Section 409A of the Code**: Options issued to U.S. Participants are intended to be exempt from Section 409A of the Code pursuant to Treas.
 Reg. Section 1.409A-1(b)(5)(i)(A) and the Plan and such Options will be construed and administered accordingly. Options may be issued
 to U.S. Participants under the Plan only if the shares with respect to the Options qualify as "service recipient stock"
 as defined in Treas. Reg. Section 1.409A-1(b)(5)(E)(iii). Restricted Share Units awarded to U.S. Participants are intended to be
 compliant with Section 409A of the Code and such Restricted Share Units will be construed and administered accordingly. Any waiver
 or acceleration of vesting under the Plan or any Restricted Share Unit Agreement for a U.S. Participant may occur only to the extent
 that such acceleration or waiver will not result in the imposition of taxes under Section 409A of the Code. Any payments made under
 this Plan or any Restricted Share Unit Agreement to a U.S. Participant as a result of a termination of employment that are deemed
 to be subject to Section 409A of the Code shall occur only if such termination constitutes a "separation from service"
 as defined in Treas. Reg. 1.409A-1(h). Additionally, any payments resulting from a separation from service made to a U.S. Participant
 who is a "specified employee" as defined in Treas. Reg. 1.409A-1(i) shall be subject to the six month delay in payments
 required by Treas. Reg. 1.409A-1(3)(v) if such payments are deemed to be subject to Section 409A of the Code. Although the Company
 intends Options and Restricted Share Units granted to U.S. Participants to be exempt from or compliant with Section 409A, the Company
 makes no representation or guaranty as to the tax treatment of such Options and Restricted Share Units. Each U.S. Participant (and
 any beneficiary or the estate of the Participant, as applicable) is solely responsible and liable for the satisfaction of all taxes
 and penalties that may be imposed on or for the account of such U.S. Participant in connection with this Plan. Neither the Company
 nor any affiliate, nor any employee or director of the Company or an affiliate, shall have any obligation to indemnify or otherwise
 hold such U.S. Participant, beneficiary or estate harmless from any or all such taxes or penalties.

7.9 **Section 83(b) of the Code**: If a Participant makes an election pursuant to Section 83(b) of the Code with respect to an award of Shares
 subject to vesting or other forfeiture conditions, the Participant shall be required to promptly file a copy of such election with
 the Company.

**EXhibit A-1 U.s. participant**

**RESTRICTED SHARE UNIT AGREEMENT**

Notice is hereby given that, effective this ________ day of ________________, __________ (the "**Restricted Share Grant Date**") Strong Global Entertainment, Inc. (the "**Company**") has granted to ___________________________________________ (the "**Participant**"), ______________ Restricted Share Units pursuant to the Company's Share Compensation Plan (the "**Plan**"), a copy of which has been provided to the Participant.

Restricted Share Units are subject to the following terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Pursuant
 to the Plan and as compensation to the Participant, the Company hereby grants to the Participant, as of the Restricted Share Grant
 Date, the number of Restricted Share Units set forth above.

(b) The
 granting and vesting of the Restricted Share Units and the payment by the Company of any payout in respect of any Vested Restricted
 Share Units (as defined below) are subject to the terms and conditions of the Plan, all of which are incorporated into and form an
 integral part of this Restricted Share Unit Agreement.

(c) The
 Restricted Share Units shall become vested restricted share units (the "**Vested Restricted Share Units**") in accordance
 with the following schedule:

(i) [● on the 6 month anniversary of the Restricted Share Grant Date;

(ii) ● on the 12 month anniversary of the Restricted Share Grant Date;

(iii) ● on the 18 month anniversary of the Restricted Share Grant Date; and

(iv) ● on the 24 month anniversary of the Restricted Share Grant Date (each a "**Vesting Date** ").]<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As
 soon as reasonably practicable and no later than 60 days following the Vesting Date, or, if the Participant is not a U.S. Participant
 (as defined in the Plan), such later date mutually agreed to by the Company and the Participant, the Participant shall be entitled
 to receive, and the Company shall issue or provide, a payout with respect to those Vested Restricted Share Units in the Participant's
 Account to which the Vesting Date relates (each a "**Payout Date** "):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a
 lump sum payment in cash equal to the number of vested Restricted Share Units recorded in the Participant's Account multiplied
 by the Market Value of a Common Share on the Payout Date;

<sup>1</sup> <u>Note to Draft</u>. Vesting schedule to be determined.

---

| | |
|:---|:---|
| (ii) | the number of Common Shares required to be issued to a Participant upon the vesting of such Participant's Restricted Share Units in the Participant's Account, duly issued as fully paid and non-assessable shares and such Participant shall be registered on the books of the Company as the holder of the appropriate number of Common Shares; or |
| (iii) | any combination of the foregoing. |
|  | subject to any applicable Withholding Obligations. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The
 Participant acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 Participant has received and reviewed a copy of the Plan; and

(ii) the
 Restricted Share Units have been granted to the Participant under the Plan and are subject to all of the terms and conditions of
 the Plan to the same effect as if all of such terms and conditions were set forth in this Restricted Share Unit Agreement, including
 with respect to termination and forfeiture as set out in Section 4.7 of the Plan.

Notwithstanding anything to the contrary in this Restricted Share Unit Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [all
 vesting and issuances or payments, as applicable, in respect of a Restricted Share Unit evidenced hereby shall be completed no later
 than December 15 of the third calendar year commencing after the Restricted Share Grant Date]; and

(b) any
 Restricted Share Unit issued, granted, or awarded to the Participant, and any shares issued thereunder, and any amount received by
 the Participant with respect to any such Restricted Share Unit or shares, shall be subject to cancellation, rescission, forfeiture,
 recovery, or other action in accordance with the terms of the clawback policy of the Company as it may be amended, replaced, or restated
 from time to time (the "**Clawback Policy** "). The Company will have a right to cancel, rescind, or otherwise recover
 from the Participant for the benefit of the Company, and the Participant will forfeit or repay to the Company the amount determined
 by the Administrators in accordance with the Clawback Policy. The Participant agrees and consents to the Company's application,
 implementation and enforcement of (a) the Clawback Policy or any similar policy established by the Company that may apply to the
 Participant and (b) any provision of applicable law relating to cancellation, rescission, forfeiture, recovery, or other action,
 and expressly agrees that the Company may take such actions as are necessary to effectuate the Clawback Policy, any similar policy
 (as applicable to the Participant) or applicable law without further consent or action being required by the Participant. To the
 extent that the terms of this Restricted Share Unit Agreement and the Clawback Policy or any similar policy conflict, then the terms
 of such policy shall prevail.

The grant of the Restricted Share Units evidenced hereby is made subject to the terms and conditions of the Plan. The Participant agrees that the Participant may suffer tax consequences as a result of the grant of these Restricted Share Units and the vesting of the Restricted Share Units. The Participant acknowledges that the Participant is not relying on the Company for any tax advice and has had an adequate opportunity to obtain advice of independent tax counsel.

This Restricted Share Unit Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Execution and delivery of this Restricted Share Unit Agreement by facsimile, e-mail or other functionally equivalent electronic means of execution and transmission constitutes valid and effective execution and delivery.

In the event of any inconsistency between the terms of this Restricted Share Unit Agreement and the Plan, the terms of the Plan shall prevail unless otherwise determined in the Plan.

---

| | |
|:---|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** |  |
| Authorized Signatory | Signature of Participant |
|  | Name of Participant |

---

**exhibit a – 2 CANADIAN participant**

**RESTRICTED SHARE UNIT AGREEMENT**

Notice is hereby given that, effective this ________ day of ________________, __________ (the "**Restricted Share Grant Date**") Strong Global Entertainment, Inc. (the "**Company**") has granted to ___________________________________________ (the "**Participant**"), ______________ Restricted Share Units pursuant to the Company's Share Compensation Plan (the "**Plan**"), a copy of which has been provided to the Participant. Capitalized terms not defined herein shall have the meaning set forth in the Plan.

Restricted Share Units are subject to the following terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Pursuant
 to the Plan and as compensation to the Participant, the Company hereby grants to the Participant, as of the Restricted Share Grant
 Date, the number of Restricted Share Units set forth above.

(b) The
 granting and vesting of the Restricted Share Units and the payment by the Company of any payout in respect of any Vested Restricted
 Share Units (as defined below) are subject to the terms and conditions of the Plan, all of which are incorporated into and form an
 integral part of this Restricted Share Unit Agreement.

(c) The
 Restricted Share Units shall become vested restricted share units (the "**Vested Restricted Share Units**") in accordance
 with the following schedule:

(i) [● on the 6 month anniversary of the Restricted Share Grant Date;

(ii) ● on the 12 month anniversary of the Restricted Share Grant Date;

(iii) ● on the 18 month anniversary of the Restricted Share Grant Date; and

(iv) ● on the 24 month anniversary of the Restricted Share Grant Date (each a "**Vesting Date** ").]<sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As
 soon as reasonably practicable following the Vesting Date, the Participant shall be entitled to receive, and the Company shall issue
 or provide, a payout with respect to those Vested Restricted Share Units in the Participant's Account to which the Vesting
 Date relates (each a "**Payout Date** "):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a
 lump sum payment in cash equal to the number of vested Restricted Share Units recorded in the Participant's Account multiplied
 by the Market Value of a Common Share on the Payout Date;

(ii) the
 number of Common Shares required to be issued to a Participant upon the vesting of such Participant's Restricted Share Units
 in the Participant's Account, duly issued as fully paid and non-assessable shares and such Participant shall be registered
 on the books of the Company as the holder of the appropriate number of Common Shares; or

<sup>2</sup> <u>Note to Draft</u>. Vesting schedule to be determined.

(iii) any combination of the foregoing. <br>subject to any applicable Withholding Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The
 Participant acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 Participant has received and reviewed a copy of the Plan; and

(ii) the
 Restricted Share Units have been granted to the Participant under the Plan and are subject to all of the terms and conditions of
 the Plan to the same effect as if all of such terms and conditions were set forth in this Restricted Share Unit Agreement, including
 with respect to termination and forfeiture as set out in Section 4.7 of the Plan.

Notwithstanding anything to the contrary in this Restricted Share Unit Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all
 vesting and issuances or payments, as applicable, in respect of a Restricted Share Unit evidenced hereby shall be completed no later
 than December 15 of the third calendar year commencing after the Restricted Share Grant Date; and

(b) any
 Restricted Share Unit issued, granted, or awarded to the Participant, and any shares issued thereunder, and any amount received by
 the Participant with respect to any such Restricted Share Unit or shares, shall be subject to cancellation, rescission, forfeiture,
 recovery, or other action in accordance with the terms of the clawback policy of the Company as it may be amended, replaced, or restated
 from time to time (the "**Clawback Policy** "). The Company will have a right to cancel, rescind, or otherwise recover
 from the Participant for the benefit of the Company, and the Participant will forfeit or repay to the Company the amount determined
 by the Administrators in accordance with the Clawback Policy. The Participant agrees and consents to the Company's application,
 implementation and enforcement of (a) the Clawback Policy or any similar policy established by the Company that may apply to the
 Participant and (b) any provision of applicable law relating to cancellation, rescission, forfeiture, recovery, or other action,
 and expressly agrees that the Company may take such actions as are necessary to effectuate the Clawback Policy, any similar policy
 (as applicable to the Participant) or applicable law without further consent or action being required by the Participant. To the
 extent that the terms of this Restricted Share Unit Agreement and the Clawback Policy or any similar policy conflict, then the terms
 of such policy shall prevail.

The grant of the Restricted Share Units evidenced hereby is made subject to the terms and conditions of the Plan. The Participant agrees that the Participant may suffer tax consequences as a result of the grant of these Restricted Share Units and the vesting of the Restricted Share Units. The Participant acknowledges that the Participant is not relying on the Company for any tax advice and has had an adequate opportunity to obtain advice of independent tax counsel.

This Restricted Share Unit Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Execution and delivery of this Restricted Share Unit Agreement by facsimile, e-mail or other functionally equivalent electronic means of execution and transmission constitutes valid and effective execution and delivery.

In the event of any inconsistency between the terms of this Restricted Share Unit Agreement and the Plan, the terms of the Plan shall prevail unless otherwise determined in the Plan.

[Remainder of page intentionally blank. Signature pages follow.]

IN WITNESS WHEREOF the Company has executed this Restricted Share Unit Agreement as of [Date].

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| |
|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** |
| Authorized Signatory |

---

[Remainder of page intentionally blank. Participant signature pages follow.]

**<u>Participant Acknowledgement, Representation and Waiver</u>**

*Please insert your initials beside each of the statements in the Acknowledgement, Representation and Waiver below to confirm that you understand and agree, and then confirm your acceptance of the Agreement on the signature page that follows.*

---

| | |
|:---|:---|
| &nbsp;&nbsp;*Insert your initials here* | &nbsp;&nbsp;**<u>Acknowledgement, Representation and Waiver</u>** |
|  | &nbsp;&nbsp;I understand that the Company is relying on my acknowledgement, representation and waiver in granting the Restricted Share Units to me.<br>|
|  | &nbsp;&nbsp;It is my express wish that this document and all related documents be drawn up in English. *À ma demande, le présent document ainsi que les documents qui s'y rattachent ont été rédigés en anglais.*<br>|
|  | &nbsp;&nbsp;I acknowledge that I have been provided with a copy of the Plan.<br>|
|  | &nbsp;&nbsp;Before accepting this grant, I have had the opportunity to receive independent legal advice from my own counsel with respect to the terms of the Plan and this Restricted Share Unit Agreement.<br>|
|  | &nbsp;&nbsp;I understand that this grant is governed by the Plan and this Restricted Share Unit Agreement.<br>I acknowledge that I have reviewed these documents fully and I understand them.<br>I agree to all of the terms and conditions set out in the Plan and this Restricted Share Unit Agreement.<br>|
|  | &nbsp;&nbsp;I have not been induced to enter into this Restricted Share Unit Agreement or acquire any Restricted Share Units by expectation of employment or continued employment with the Company or any Affiliate of the Company.<br>|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I represent that the provisions that impose ***limitations and forfeiture consequences*** if my employment or service ceases for any reason, and particularly, each of:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 1.1 – definition of "Event of Termination"**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 1.1 – definition of "Notification Date"** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 4.7 (Rights upon an Event of Termination)** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 7.4 (Clawback Provision)** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 7.9 (No Effect on Employment or Service, Rights or Benefits)**<br>have been adequately brought to my attention, and I have reviewed and understood them.<br>|
|  | &nbsp;&nbsp;***Accordingly, I waive irrevocably any right I may have to assert that the terms of the Plan and this Restricted Share Unit Agreement should not be binding on me because they were not brought to my attention, were not read by me, or were not understood by me, <u>even if</u>, before accepting this grant and despite my representation to the contrary, I did not in fact fully read and understand those documents.***<br> **** |

---

IN WITNESS WHEREOF the Participant has executed this Restricted Share Unit Agreement as of [Date].

---

| |
|:---|
| Signature of Participant |
| Name of Participant |

---

**exhibit B-1 – u.s. participant**

**Option Agreement**

Notice is hereby given that, effective this ________ day of ________________, __________ (the "**Effective Date**") Strong Global Entertainment, Inc. (the "**Company**") has granted to ___________________________________________ (the "**Participant**"), Options<sup>3</sup> to acquire ______________ Common Shares (the "**Optioned Shares**") up to 4:30 p.m. Pacific Time on the __________ day of ____________________, __________ (the "**Option Expiration Date**") at an exercise price of US$____________ per Optioned Share pursuant to the Company's Share Compensation Plan (the "**Plan**"), a copy of which is attached hereto.

Optioned Shares may be acquired as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **[insert vesting provisions, if applicable]; and** 

(b) **[insert hold period when required]**.

The grant of the Options evidenced hereby and the Option Expiration Date thereof, is made subject to the terms and conditions of the Plan. The Participant agrees that the Participant may suffer tax consequences as a result of the grant of these Options, the exercise of the Options and the disposition of Optioned Shares. The Participant acknowledges that the Participant is not relying on the Company for any tax advice and has had an adequate opportunity to obtain advice of independent tax counsel.

Notwithstanding anything to the contrary in this Option Agreement, any Option granted to the Participant, and any Optioned Shares issued thereunder, and any amount received by the Participant with respect to any such Option or Optioned Shares, shall be subject to cancellation, rescission, forfeiture, recovery, or other action in accordance with the terms of the clawback policy of the Company as it may be amended, replaced, or restated from time to time (the "**Clawback Policy**"). The Company will have a right to cancel, rescind, or otherwise recover from such Participant for the benefit of the Company, and such Participant will be required to forfeit or repay to the Company the amount determined by the Administrators in accordance with the Clawback Policy. The Participant agrees and consents to the Company's application, implementation and enforcement of (a) the Clawback Policy or any similar policy established by the Company that may apply to the Participant and (b) any provision of applicable law relating to cancellation, rescission, forfeiture, recovery, or other action, and expressly agrees that the Company may take such actions as are necessary to effectuate the Clawback Policy, any similar policy (as applicable to the Participant) or applicable law without further consent or action being required by the Participant. To the extent that the terms of this Option Agreement and the Clawback Policy or any similar policy conflict, then the terms of such policy shall prevail.

<sup>3</sup> Note to Draft. For U.S. employees indicate whether the options are incentive stock options or non-qualified stock options.

This Option Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Execution and delivery of this Option Agreement by facsimile, e-mail or other functionally equivalent electronic means of execution and transmission constitutes valid and effective execution and delivery.

In the event of any inconsistency between the terms of this Option Agreement and the Plan, the terms of the Plan shall prevail.

---

| | |
|:---|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** |  |
| Authorized Signatory | Signature of Participant |
|  | Name of Participant |

---

**exhibit B- 2 – canadian participant**

**Option Agreement**

Notice is hereby given that, effective this ________ day of ________________, __________ (the "**Effective Date**") Strong Global Entertainment, Inc. (the "**Company**") has granted to ___________________________________________ (the "**Participant**"), Options to acquire ______________ Common Shares (the "**Optioned Shares**") up to 4:30 p.m. Pacific Time on the __________ day of ____________________, __________ (the "**Option Expiration Date**") at an exercise price of US$____________ per Optioned Share pursuant to the Company's Share Compensation Plan (the "**Plan**"), a copy of which is attached hereto. Capitalized terms not defined herein shall have the meaning set forth in the Plan.

Optioned Shares may be acquired as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **[insert vesting provisions, if applicable]; and** 

(b) **[insert hold period when required]**.

The grant of the Options evidenced hereby and the Option Expiration Date thereof, is made subject to the terms and conditions of the Plan. The Participant agrees that the Participant may suffer tax consequences as a result of the grant of these Options, the exercise of the Options and the disposition of Optioned Shares. The Participant acknowledges that the Participant is not relying on the Company for any tax advice and has had an adequate opportunity to obtain advice of independent tax counsel.

Notwithstanding anything to the contrary in this Option Agreement, any Option granted to the Participant, and any Optioned Shares issued thereunder, and any amount received by the Participant with respect to any such Option or Optioned Shares, shall be subject to cancellation, rescission, forfeiture, recovery, or other action in accordance with the terms of the clawback policy of the Company as it may be amended, replaced, or restated from time to time (the "**Clawback Policy**"). The Company will have a right to cancel, rescind, or otherwise recover from such Participant for the benefit of the Company, and such Participant will be required to forfeit or repay to the Company the amount determined by the Administrators in accordance with the Clawback Policy. The Participant agrees and consents to the Company's application, implementation and enforcement of (a) the Clawback Policy or any similar policy established by the Company that may apply to the Participant and (b) any provision of applicable law relating to cancellation, rescission, forfeiture, recovery, or other action, and expressly agrees that the Company may take such actions as are necessary to effectuate the Clawback Policy, any similar policy (as applicable to the Participant) or applicable law without further consent or action being required by the Participant. To the extent that the terms of this Option Agreement and the Clawback Policy or any similar policy conflict, then the terms of such policy shall prevail.

This Option Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Execution and delivery of this Option Agreement by facsimile, e-mail or other functionally equivalent electronic means of execution and transmission constitutes valid and effective execution and delivery.

In the event of any inconsistency between the terms of this Option Agreement and the Plan, the terms of the Plan shall prevail.

[Remainder of page intentionally blank. Signature pages follow.]

IN WITNESS WHEREOF the Company has executed this Option Agreement as of [Date].

---

| |
|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** |
| Authorized Signatory |

---

[Remainder of page intentionally blank. Participant signature pages follow.]

**<u>Participant Acknowledgement, Representation and Waiver</u>**

 

*Please insert your initials beside each of the statements in the Acknowledgement, Representation and Waiver below to confirm that you understand and agree, and then confirm your acceptance of the Agreement on the signature page that follows.*

---

| | |
|:---|:---|
| &nbsp;&nbsp;*Insert your initials here* | &nbsp;&nbsp;**<u>Acknowledgement, Representation and Waiver</u>** |
|  | &nbsp;&nbsp;I understand that the Company is relying on my acknowledgement, representation and waiver in granting the Option to me.<br>|
|  | &nbsp;&nbsp;It is my express wish that this document and all related documents be drawn up in English. *À ma demande, le présent document ainsi que les documents qui s'y rattachent ont été rédigés en anglais.*<br>|
|  | &nbsp;&nbsp;I acknowledge that I have been provided with a copy of the Plan. <br>|
|  | &nbsp;&nbsp;Before accepting this grant, I have had the opportunity to receive independent legal advice from my own counsel with respect to the terms of the Plan and this Option Agreement. <br>|
|  | &nbsp;&nbsp;I understand that this grant is governed by the Plan and this Option Agreement.<br>I acknowledge that I have reviewed these documents fully and I understand them.<br>I agree to all of the terms and conditions set out in the Plan and this Option Agreement.<br>|
|  | &nbsp;&nbsp;I have not been induced to enter into this Option Agreement or acquire any Option by expectation of employment or continued employment with the Company or any Affiliate of the Company. <br>|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I represent that the provisions that impose ***limitations and forfeiture consequences*** if my employment or service ceases for any reason, and particularly, each of:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 1.1 – definition of "Event of Termination"**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 1.1 – definition of "Notification Date"** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 5.9 (Rights upon an Event of Termination)** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 7.4 (Clawback Provision)** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● **Plan Section 7.9 (No Effect on Employment or Service, Rights or Benefits)**<br>have been adequately brought to my attention, and I have reviewed and understood them.<br>|
|  | &nbsp;&nbsp;***Accordingly, I waive irrevocably any right I may have to assert that the terms of the Plan and this Option Agreement should not be binding on me because they were not brought to my attention, were not read by me, or were not understood by me, <u>even if</u>, before accepting this grant and despite my representation to the contrary, I did not in fact fully read and understand those documents.*** |

---

IN WITNESS WHEREOF the Participant has executed this Option Agreement as of [Date].

---

| |
|:---|
| Signature of Participant |
| Name of Participant |

---

**EXhibit c**

**<u>Notice of OPTION EXERCISE</u>**

---

| | |
|:---|:---|
| TO: | **STRONG GLOBAL ENTERTAINMENT, INC.** (the "**Company**") |
| FROM: | ___________________________ |
| DATE: | ___________________________ |

---

The undersigned hereby irrevocably gives notice, pursuant to the Company's Share Compensation Plan (the "**Plan**"), of the exercise of the Options to acquire and hereby subscribes for:

 

*[check one]*

☐ (a) all of the Optioned Shares; or <br>☐ (b) _______________ of the Optioned Shares,

which are the subject of the Option Agreement attached hereto.

Calculation of total Exercise Price:

---

| | | |
|:---|:---|:---|
| (i) | number of Optioned Shares to be acquired on exercise | __________ Optioned Shares |
| (ii) | multiplied by the Exercise Price per Optioned Share: | $__________ |
| TOTAL EXERCISE PRICE, enclosed herewith (unless this is a cashless exercise): | TOTAL EXERCISE PRICE, enclosed herewith (unless this is a cashless exercise): | <br> $__________ |

---

I hereby:

---

| | | |
|:---|:---|:---|
| ☐ | (a) | unless this is a cashless exercise, enclose a cheque payable to "Strong Global Entertainment, Inc." for the aggregate Exercise Price plus the amount of the estimated Withholding Obligations and agree that I will reimburse the Company for any amount by which the actual Withholding Obligations exceed the estimated Withholding Obligations; or |
| ☐ | (b) | advise the Company that I am exercising the above Options on a cashless exercise basis, in compliance with the procedures established from time to time by the Administrators for cashless exercises of Options under the Plan. I will consult with the Company to determine what additional documentation, if any, is required in connection with my cashless exercise of the above Options. I agree to comply with the procedures established by the Company for cashless exercises and all terms and conditions of the Plan. Please prepare the Optioned Shares certificates, if any, issuable in connection with this exercise in the following name(s): |

---

_____________________________________________________ <br>_____________________________________________________

This Notice may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Execution and delivery of this Notice by facsimile, e-mail or other functionally equivalent electronic means of execution and transmission constitutes valid and effective execution and delivery.

---

| |
|:---|
| Signature of Participant |
| Name of Participant |

---

Letter and consideration/direction received on ________________, 20 _____.

---

| | |
|:---|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** | **STRONG GLOBAL ENTERTAINMENT, INC.** |
| By: |  |
|  | [Name] |
|  | [Title] |

---

**Exhibit d – u.s. participants**

**<u>RESTRICTED SHARE UNIT DEFERRAL AGREEMENT</u>**

---

| | |
|:---|:---|
| **TO:** | **STRONG GLOBAL ENTERTAINMENT, INC. (the "Company")** |
| **FROM:** | **___________________** |
| **DATE:** | **___________________** |

---

**I, the undersigned U.S. Participant, acknowledge that the Company may grant or has granted to me an award of Restricted Share Units under the Strong Global Entertainment, Inc. Share Compensation Plan (the "Plan") that will vest according to the vesting schedule set out in the Restricted Share Unit Agreement.** 

**I hereby irrevocably elect to defer the payout of vested Restricted Share Units as set forth below (select and complete either Option 1 or Option 2). By making this election, I understand and agree that my election may not be changed.**

**☐ Option 1: Deferral of Restricted Share Units Awarded in Next Calendar Year.**

**I hereby elect to defer the payout of _____% of any Restricted Share Units awarded to me under the Plan in the next calendar year until the date selected below:**

**☐** **1 year after each vesting date applicable to such Restricted Share Units.**

**☐** **2 years after each vesting date applicable to such Restricted Share Units.**

**☐** **3 years after each vesting date applicable to such Restricted Share Units.**

**☐** **4 years after each vesting date applicable to such Restricted Share Units.**

**☐** **5 years after each vesting date applicable to such Restricted Share Units.**

**☐ Option 2: Deferral of Restricted Share Units that Vest 12 Months or More After Date of Election.**

**I was awarded Restricted Share Units pursuant to the Restricted Share Unit Award Agreement dated ___________ (must be no earlier than 29 days prior to the date of this election). I hereby elect to defer the payout of _____% of the Restricted Share Units awarded to me under the Plan that vest 12 months or more after the date of this election until the date selected below:**

**☐** **1 year after each vesting date applicable to such Restricted Share Units.**

**☐** **2 years after each vesting date applicable to such Restricted Share Units.**

**☐** **3 years after each vesting date applicable to such Restricted Share Units.**

**☐** **4 years after each vesting date applicable to such Restricted Share Units.**

**☐** **5 years after each vesting date applicable to such Restricted Share Units.**

In the event of my death, any Restricted Share Units that have vested but are subject to the deferral election above shall be paid to the following beneficiary in accordance with the timing of such election:

---

| | |
|:---|:---|
| Name: | ____________________________ |
| Address: | ____________________________ |
|  | ____________________________ |
| Relationship: | ____________________________ |

---

I have read and understand the terms of the Plan and this Restricted Share Deferral Agreement. By signing this form, I hereby elect to defer the payout of the Restricted Share Units as set forth above to which I may become entitled to receive upon vesting of such Restricted Share Units. **I UNDERSTAND THAT THE AMOUNT OF DEFERRAL, AND THE TIMING OF THE PAYMENT ELECTIONS I MAKE, MAY NOT BE ALTERED**. I also acknowledge that the Administrators of the Plan have complete discretion to administer and interpret the Plan. Notwithstanding the elections set forth above, I understand that the Administrators may, in their sole discretion, elect to terminate this deferral arrangement and accelerate the timing of the payment to me of my deferred Restricted Share Units to the extent that the Administrators determine it is permitted or required to do so under Section 409A of the Code. The deferral arrangement described in this form is intended to comply with Section 409A of the Code and shall be interpreted accordingly.

This Restricted Share Deferral Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Execution and delivery of this Restricted Share Deferral Agreement by facsimile, e-mail or other functionally equivalent electronic means of execution and transmission constitutes valid and effective execution and delivery.

---

| | |
|:---|:---|
| **STRONG GLOBAL ENTERTAINMENT, INC.** |  |
| Authorized Signatory | Signature of Participant |
|  | Name of Participant |

---

## Exhibit 10.11

**Exhibit 10.11**

**EMPLOYMENT AGREEMENT**

**THIS EMPLOYMENT AGREEMENT** (this "Agreement") is made and entered into as of [●], by and between Strong Technical Services, Inc., a Nebraska corporation (the "Company"), and Mark D. Roberson, a North Carolina resident (the "Employee").

WHEREAS, the Company desires to employ Employee, and Employee desires to accept such employment, on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of mutual promises and covenants herein contained, the parties hereto intending to become legally bound agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Employment</u>. The Company hereby agrees to employ the Employee and the Employee hereby agrees to be employed by the Company upon the terms and conditions hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Duties and Services</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Title and Duties</u>. During the Employment Period (defined in Section 3 below), the services rendered by Employee hereunder shall be for the Company's parent, Strong Global Entertainment, Inc. ("SGE"). The Employee shall serve as Chief Executive Officer of SGE and shall perform such duties as are customary for such role in a public company registered with the Securities and Exchange Commission and listed on a national securities exchange and such other duties as may be assigned to him from time to time by the Board of Directors of SGE, which services may include serving as an officer or director of a subsidiary or affiliate of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Time</u>. The Employee shall devote his sufficient business time and attention to the business of SGE and to the promotion of SGE's best interest, subject to vacations, holidays and normal illnesses pursuant to the Company's policies in place from time to time. The Employee shall at all times comply with Company policies in place from time to time, including but not limited to the Company's Code of Ethics. The Company acknowledges and agrees that Employee's provision of services hereunder is non-exclusive and that Employee is also currently employed by an indirect majority owner of SGE, FG Group Holdings, Inc. ("FG Group Holdings"), which employment may be conflict with Employee's employment with the Company and services to SGE. In the event of any such conflict of interest, Employee shall comply with the SGE's conflict of interest policies and communicate any such conflict of interest to the SGE Board or Audit Committee, as appropriate, and be disclosed in appropriate public documents (e.g. Proxy Statements, 8-K, 10-K, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Travel</u>. The Employee shall undertake such travel as may be necessary and desirable to promote the business and affairs of SGE, consistent with the Employee's position and duties with the Company and SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Term of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Employee's employment hereunder shall commence on [●] (the "Commencement Date"). The Employee's employment will be "at-will," meaning that either the Employee or the Company may terminate the Employee's employment at any time and for any reason, with or without cause. The period during which Employee is employed hereunder shall be referred to herein as the "Employment Period").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 In the event Employee is terminated by the Company at any time without Cause (defined in Section 3.4 below), Employee will be entitled to the following (collectively, the "Severance Benefits"), subject to the terms of Section 3.3 below): (i) severance pay in the amount of one (1) year of the Employee's base salary at the time of termination ("Severance Pay") and (ii) if Employee timely and properly elects continuation health coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the Company shall pay Employee's COBRA premiums for a period of twelve (12) months following the date of Employee's termination of employment (the "Termination Date"). The Severance Pay shall be payable over a period of twelve (12) months following the Termination Date in accordance with the Company's regular payroll practices, commencing within ninety (90) days following the Termination Date on the first regularly scheduled payroll date of the Company that is practicable after the effective date of the General Release (defined in Section 3.3 below), *except* that, if the General Release may be executed and/or revoked in a calendar year following the calendar year in which the Termination Date occurs, the Severance Pay shall commence on the first regularly scheduled payroll date of the Company in the calendar year in which the consideration or, if applicable, release revocation period ends to the extent necessary to comply with Section 409A (as defined in Section 12.1 below). The first such payment shall include payment for any payroll dates between the Termination Date and the date of such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Employee's receipt of the Severance Benefits is conditioned on Employee signing (without revoking if such right is provided under applicable law general release substantially in the form attached hereto as <u>Exhibit A</u> (the "<u>General Release</u>"), which form may be modified as necessary by the Company to comply with applicable law and to specify the date by which Employee must execute and return the General Release for it to be effective. Such General Release shall be provided to Employee by the Company on or about the Termination Date. Employee must execute the General Release within 60 days following the Termination Date (or such shorter time as may be set forth in the General Release).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 For purposes of this Agreement, "Cause" shall mean: (i) Employee's willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness); (ii) Employee's willful failure to comply with any valid and legal directive of the Company's or SGE's Board of Directors; (iii) Employee's willful engagement in dishonesty, illegal conduct, or misconduct, which is, in each case, materially injurious to the Company, SGE or their affiliates; (iv) Employee's embezzlement, misappropriation, or fraud, whether or not related to Employee's employment with the Company; (v) Employee's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude; or (vi) Employee's material breach of any material obligation under this Agreement or any other written agreement between Employee and the Company or SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Base Salary</u>. For all of the services to be rendered by the Employee under this Agreement, during the Employment Period, the Company shall pay the Employee a base salary equal to $275,000 (the "Base Salary"). The compensation paid hereunder to the Employee shall be paid in accordance with the normal payroll practices of the Company and shall be subject to the customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an employee. The Base Salary will be subject to annual review and adjustment by SGE's Board of Directors based upon the Employee's performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Annual Bonus</u>. Commencing with respect to the Company's 2023 fiscal year, the Employee will be eligible to receive a bonus in an amount targeted at 75% of base salary, payable in a combination of cash and equity in the Company, as determined by the Compensation Committee of SGE's Board of Directors. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Compensation Committee of the SGE Board of Directors. Any equity grants will vest over a period of three to five years from the date of grant as determined by SGE's Compensation Committee. Any equity award shall be evidenced by and subject to the terms and conditions of an Award Agreement entered into between SGE and the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Bonus</u>. Employee is entitled to receive a cash bonus in an amount up to $200,000, payable at the discretion of the Compensation Committee of SGE's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>IPO RSU Grant</u>. Subject to the approval of SGE's Board of Directors, Employee will be granted upon the initial public offering of SGE (the "IPO") 30,000 restricted stock units of SGE, pursuant to the terms and conditions of the Company's 2023 Share Compensation Plan and related restricted stock unit ("RSU") award agreement. Such RSUs shall be fully-vested upon their grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Other RSU Grant</u>. Subject to the approval of SGE's Board of Directors, Employee will be granted upon the IPO 30,000 RSUs of SGE, pursuant to the terms and conditions of the Company's 2023 Share Compensation Plan and related RSU award agreement. Subject to the terms of such award agreement, such RSUs shall vest in three (3) equal annual installments on the first, second and third year anniversaries of the date of the IPO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Vacation</u>. The Employee shall be entitled to vacation of up to four (4) weeks per calendar year, pursuant to the applicable Company policy. All vacations shall be in addition to recognized national holidays. During all vacations, the Employee's compensation and other benefits as stated herein shall continue to be paid in full. Such vacations shall be taken only at times convenient for SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Company Benefit Programs</u>. In addition to the compensation and to the rights provided for elsewhere in this Agreement, the Employee shall be entitled to participate in each plan of the Company now or hereafter adopted and in effect from time to time for the benefit of Employee employees of the Company, to the extent permitted by such plans and by applicable law. Nothing in this Agreement shall limit the Company's right to amend, modify and/or terminate any benefit plan, policies or programs at any time for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Restrictive Covenants and Need for Protection</u>. Employee acknowledges that, because of his senior Employee position with the Company, he has or will develop knowledge of the affairs of the Company and its subsidiaries and their relationships with dealers, distributors and customers such that he could do serious damage to the financial welfare of the Company and/or its subsidiaries should he compete or assist others in competing with the business of the Company and/or its subsidiaries. Consequently, and in consideration of his employment with the Company, and for the benefits he is to receive under this Agreement, and for other good and valuable consideration, the receipt of which he hereby acknowledges, the Employee agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Confidential Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 <u>Non-disclosure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as the Company or SGE may permit or direct in writing, during the term of this Agreement and thereafter, the Employee agrees that he will not disclose to any person or entity any Confidential Information (defined in Section 7.1.1(b) below which he may have obtained while in the employ of the Company, relating to any customers, customer lists, methods, distribution, sales, prices, profits, costs, contracts, inventories, suppliers, dealers, distributors, business prospects, business methods, manufacturing ideas, formulas, plans or techniques, research, trade secrets, or know-how of the SGE Group. Nothing contained in this Agreement shall limit the Employee's ability to respond to a lawful subpoena; to make a report to or cooperate with any government agency, including without limitation the ability to participate in an investigation, provide information, and recover any remuneration awarded for doing so; and to comply with any other legal obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For purposes of this Agreement, "Confidential Information" means all information of a confidential or proprietary nature regarding SGE, the Company or any of SGE's subsidiaries (the "SGE Group"), their respective business or properties that the SGE Group has furnished or furnishes to Employee, whether before or after the date of this Agreement, or is or becomes available to Employee by virtue of Employee's employment with the Company, whether tangible or intangible, and in whatever form or medium provided, as well as all such information generated by Employee that, in each case, has not been published or disclosed to, and is not otherwise known to, the public. Confidential Information includes, without limitation, customer lists, customer requirements and specifications, designs, financial data, sales figures, costs and pricing figures, marketing and other business plans, product development, marketing concepts, personnel matters (including employee skills and compensation), drawings, specifications, instructions, methods, processes, techniques, computer software or data of any sort developed or compiled by the SGE Group, formulae or any other information relating to the SGE's services, products, sales, technology, research data, software and all other know-how, trade secrets or proprietary information, or any copies, elaborations, modifications and adaptations thereof. For the avoidance of doubt, Employee acknowledges and agrees that Confidential Information protected under this Agreement includes information regarding pay, bonuses, benefits and perquisites offered to or received by employees of the Company, as well as non-public information regarding the unique and special skills of specific employees and how such skills are valuable and integral to the Company's operations. Notwithstanding the foregoing, Confidential Information shall not include any information (i) that is generally known to the industry or the public other than as a result of Employee's breach of this covenant; (ii) that is made available to Employee by a third party without that party's breach of any confidentiality obligation; or (iii) which was developed by Employee outside or independent of Employee's performance of Employee's obligation to render services on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Employee acknowledges that Employee has been notified in accordance with the federal Uniform Trade Secrets Act (18 U.S. Code § 1833(b)(1)) that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; *and* (ii) solely for the purpose of reporting or investigating a suspected violation of law; *or* (b) is made in a complaint or other document filed in a lawsuit or other proceeding, *if* such filing is made under seal. Employee also acknowledges that nothing in this Agreement shall be construed to prohibit Employee from reporting possible violations of law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Covenant Not to Compete</u>. During the Employee's employment and for a period of one (1) year thereafter, the Employee agrees that he will not participate in or finance, directly or indirectly, for himself or on behalf of any third party, anywhere in the world, as principal, agent, employee, employer, consultant, investor or partner, or assist in the management of, or own any stock or any other ownership interest in, any business that is materially competitive with the business of the SGE Group, as conducted at any time during the twelve-month period prior to the time in question. Notwithstanding the foregoing, the ownership of not more than two percent (2%) of the outstanding securities of any company listed on any public exchange or regularly traded in the over-the-counter market, *provided* that the Employee's involvement with any such company is solely that of a passive security holder and the Employee discloses such ownership in advance to the Company's Board of Directors, shall not constitute a violation of this paragraph. Employee acknowledges that the SGE Group does business throughout the world and, thus, it is necessary and appropriate to have this covenant not to compete apply world-wide in order to protect the SGE Group's legitimate interests in its Confidential Information and close customer relationships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Covenant Not to Solicit</u>. The Employee agrees that he will not, during the Employee's employment and for a period of one (1) year thereafter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) directly or indirectly, request or advise any of the customers, distributors or dealers of the SGE Group to terminate or curtail their business with the SGE Group, or to patronize another business which is materially competitive with the SGE Group; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) directly or indirectly, on behalf of himself or any other person or entity, request, advise or solicit any person who is then or was in the prior six months an employee of the SGE Group to leave such employment for any reason or to hire any such person as an employee or independent contractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Judicial Modification</u>. In the event that any court of law or equity shall consider or hold any aspect of this Section 7 to be unreasonable or otherwise unenforceable, the parties hereto agree that the aspect of this Section so found may be reduced or modified by appropriate order of the court and shall thereafter continue, as so modified, in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Injunctive Relief</u>. The parties hereto acknowledge that the remedies at law for breach of this Section 7 will be inadequate, and that the Company shall be entitled to injunctive relief for violation thereof; *provided,* however, that nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Inventions and Discoveries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>SGE Proprietary Rights</u>. Employee acknowledges and agrees that all Intellectual Property (defined below) created, made or conceived by Employee (solely or jointly) during Employee's employment by the Company (regardless of whether such Intellectual Property was created, conceived or produced during Employee's regular work hours or at any other time) that relates to the actual or anticipated businesses of the SGE Group or results from or is suggested by any work performed by employees or independent contractors for or on behalf of the SGE Group ("<u>SGE Intellectual Property</u>") shall be deemed "work for hire" and shall be and remain the sole and exclusive property of SGE for any and all purposes and uses whatsoever as soon as Employee conceives or develops such SGE Intellectual Property, and Employee hereby agrees that its assigns, executors, heirs, administrators or personal representatives shall have no right, title or interest of any kind or nature therein or thereto, or in or to any results and proceeds therefrom. If for any reason such SGE Intellectual Property is not deemed to be "work-for-hire," then Employee hereby irrevocably and unconditionally assigns all rights, title, and interest in such SGE Intellectual Property to SGE and agrees that SGE is under no further obligation, monetary or otherwise, to Employee for such assignment. Employee also hereby waives all claims to any moral rights or other special rights ("<u>Moral Rights</u>"), including, without limitation, all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights," "artist's rights," "droit moral" or the like, that Employee may have or may accrue in any SGE Intellectual Property. To the extent that any such Moral Rights cannot be assigned under applicable law, Employee hereby ratifies and consents to any action that may be taken with respect to such Moral Rights by or on behalf of the Company and waives and agrees not to enforce any and all such rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under applicable law. Employee shall promptly disclose in writing to SGE the existence of any and all SGE Intellectual Property. As used in this Agreement, "<u>Intellectual Property</u>" shall mean and include any ideas, inventions (whether or not patentable), designs, improvements, discoveries, innovations, patents, patent applications, trademarks, service marks, trade dress, trade names, trade secrets, works of authorship, copyrights, copyrightable works, films, audio and video tapes, other audio and visual works of any kind, scripts, sketches, models, formulas, tests, analyses, software, firmware, computer processes, computer and other applications, creations and properties, Confidential Information and any other patents, inventions or works of creative authorship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 Employee agrees to communicate promptly and to disclose to SGE in such form as the Employee may be required to do so, all information, details and data pertaining to SGE Intellectual Property and to execute and deliver to SGE such formal transfers and assignments and such other papers and documents as may be required of the Employee to permit SGE or any person or entity designated by SGE to file and prosecute the patent applications, and, as to copyrightable material, to obtain copyrights thereof. Employee represents and warrants to the Company that all Intellectual Property Employee delivers to the Company shall be original and shall not infringe upon or violate any patent, copyright or proprietary right of any person or third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 To the extent this Agreement is required to be construed in accordance with laws of any state which precludes as a requirement in an employee agreement the assignment of certain classes of inventions made by an employee, this Section 8 will be interpreted not to apply to any invention which a court rules and/or SGE agrees falls within such classes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Tax Withholding</u>. All payments made and benefits provided by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Survival of Obligations</u>. All obligations of the Company and the Employee that by their nature involve performance, in any particular, after the termination of the Employee's employment or the term of this Agreement, or that cannot be ascertained to have been fully performed until after the termination of Employee's employment or the term of this Agreement, will survive the expiration or termination of the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Officer Resignation</u>. Upon termination of his employment with the Company for any reason, the Employee shall resign, as of the date of such termination, from any corporate office or director position held with the Company or any member of the SGE Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Miscellaneous</u>. The following miscellaneous sections shall apply to this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Section 409A Compliance</u>. To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code and the guidance promulgated thereunder ("Section 409A"). This Agreement shall be administered in a manner consistent with this intent, and any provision that would cause the Agreement to fail to satisfy Section 409A shall have no force and effect until amended by the parties to comply with Section 409A (which amendment may be retroactive to the extent permitted by Section 409A). Unless otherwise expressly provided, any payment of compensation by Company to Employee, whether pursuant to this Agreement or otherwise, shall be made no later than the 15<sup>th</sup> day of the third month (*i.e*., 2½ months) after the later of the end of the calendar year or the Company's fiscal year in which Employee's right to such payment vests (*i.e*., is not subject to a "substantial risk of forfeiture" for purposes of Code Section 409A). For purposes of this Agreement, "Separation from Service" shall have the meaning given to such term under Section 409A. Each payment and each installment of any severance payments provided for under this Agreement shall be treated as a separate payment for purposes of application of Section 409A. To the extent that any severance payments come within the definition of "short term deferrals" or "involuntary severance" under Section 409A, such amounts shall be excluded from "deferred compensation" as allowed under Section 409A, and shall *not* be subject to the following Section 409A compliance requirements. All payments of "nonqualified deferred compensation" (within the meaning of Section 409A) are intended to comply with the requirements of Section 409A, and shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate, offset or assign any such deferred payment, except in compliance with Section 409A. No amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A and Employee shall have no discretion with respect to the timing of payments except as permitted under Section 409A. Any payments to which Section 409A applies which are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as Separation from Service) occurs shall commence payment only in the calendar year in which the release revocation period ends as necessary to comply with Section 409A. In the event that Employee is determined to be a "key employee" (as defined and determined under Section 409A) of the Company at a time when its stock is deemed to be publicly traded on an established securities market, payments determined to be "nonqualified deferred compensation" payable upon separation from service shall be made no earlier than (i) the first day of the seventh (7<sup>th</sup>) complete calendar month following such termination of employment, or (ii) Employee's death, consistent with the provisions of Section 409A. Any payment delayed by reason of the prior sentence shall be paid out in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule. All expense reimbursement or in-kind benefits subject to Section 409A provided under this Agreement or, unless otherwise specified in writing, under any Company program or policy, shall be subject to the following rules: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided during one calendar year may not affect the benefits provided during any other year; (ii) reimbursements shall be paid no later than the end of the calendar year following the year in which the Employee incurs such expenses, and the Employee shall take all actions necessary to claim all such reimbursements on a timely basis to permit the Company to make all such reimbursement payments prior to the end of said period, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything herein to the contrary, no amendment may be made to this Agreement if it would cause the Agreement or any payment hereunder not to be in compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>280G</u>. If any payment or distribution by the Company to or for the benefit of Employee under this Agreement or any other plans or arrangements between the parties would be subject to the deduction limitations and excise tax imposed by Sections 280G and 4999 of the Internal Revenue Code (including any applicable interest and penalties, collectively "excise taxes"), then the parties agree to take such action as may be necessary to place Employee in the best after-tax position taking into account all income, employment and excise taxes, without regard to the deductibility of any payments by the Company. Thus, for example, any amount deemed to constitute a "parachute payment" under Section 280G, shall be reduced to the extent necessary to avoid excise taxes that would otherwise be imposed if, and only if, such reduction would result in Employee retaining a larger total after-tax amount of compensation, taking into account all Employee compensation, benefits, income, employment and excise taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Modifications and Waivers</u>. No provision of this Agreement may be modified, waived or discharged unless that modification, waiver or discharge is agreed to in writing by the Employee and the Company. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by that other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time, or at any prior or subsequent time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Construction of Agreement</u>. This Agreement supersedes any oral or written agreements between the Employee and the Company and any oral representations by the Company to the Employee with respect to the subject matter of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Governing Law</u>. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Severability</u>. If any one or more of the provisions of this Agreement, including but not limited to Section 7 above, or any word, phrase, clause, sentence or other portion of a provision is deemed illegal or unenforceable for any reason, that provision or portion will be modified or deleted in such a manner as to make this Agreement as modified legal and enforceable to the fullest extent permitted under applicable laws. The validity and enforceability of the remaining provisions or portions will remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which will take effect as an original and all of which will evidence one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Successors and Assigns</u>. This Agreement shall be binding upon, and shall inure to the benefit of the parties hereto and their respective heirs, beneficiaries, personal representatives, successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>Notices</u>. Any notice, request or other communication required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered in person, on the next business day after being delivered to a nationally-recognized overnight courier service (for such next-day delivery) or five (5) days after being deposited in the United States mail, certified or registered, postage prepaid, return receipt requested and addressed to the other party at the respective addressees set forth below or to the other addresses of either party may have furnished to the other in writing in accordance with this Section 12.7, except that notice of change of address will be effective only upon receipt.

If to Company: 5960 Fairview Road, Suite 275 Charlotte, NC 28210 <br>If to Employee: At the address for the Employee most recently on file with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Entire Agreement</u>. This Agreement contains the entire agreement of the parties. All prior arrangements or understandings, whether written or oral, are merged herein. This Agreement may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

[*The remainder of this page is intentionally blank; signature page follows*.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

---

| | | | |
|:---|:---|:---|:---|
| STRONG TECHNICAL SERVICES, INC. | STRONG TECHNICAL SERVICES, INC. | EMPLOYEE | EMPLOYEE |
| By: |  | By: |  |
| Name: | [●]<br>| Name: | Mark D. Roberson<br>|
| Title: | [●]<br>| Date: | [●] |
| Date: | [●] |  |  |

---

[*Signature page to Employment Agreement*.]

**EXHIBIT A**

**General Release of Claims**<sup>1</sup>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Mark D. Roberson ("***Employee***"), for Employee and Employee's family, heirs, executors, administrators, legal representatives and their respective successors and assigns, in exchange for the consideration received pursuant to Section 3.2 of the Employment Agreement (the "***Severance Benefits***") to which this release is attached as Exhibit A (the "***Employment Agreement***"), does hereby release and forever discharge Strong Technical Services, Inc. (the "***Company***"), Strong Global Entertainment, Inc., their respective former and current parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns, and each of their former and current agents, employees, officers, directors, shareholders, members, partners, trustees, heirs, joint venturers, attorneys, representatives, owners and servants (collectively, the "***Released Partie****s*") from any and all actions, causes of action, suits, controversies, claims and demands whatsoever (collectively, "**Claims**"), whether known or unknown, that Employee ever had, now has or may have based upon any matter, fact, cause or thing, occurring from the beginning of time up to and including the date Employee executes this General Release of Claims, including, without limitation, all Claims regarding Employee's employment with the Company, any events that may have occurred during the course of Employee's employment or the termination of Employee's employment, or any other matters or Claims of any kind or nature. This includes, without limitation, a release of any and all Claims for unpaid wages, holiday pay, overtime, bonuses or other compensation, breach of contract, wrongful discharge, disability benefits, life, health and medical insurance, sick leave, or any other fringe benefit, employment discrimination, unlawful harassment, retaliation, emotional distress, violations of public policy, defamation, fraudulent misrepresentation or inducements and severance pay and any other federal, state or local laws, statutes, rules, ordinances or regulations, whether equal employment laws, statutes, rules or regulations or otherwise. Without limiting the generality of the release provided above, Employee expressly waives any and all claims under Age Discrimination in Employment Act ("***ADEA***") that Employee may have as of the date hereof. Employee further understands that, by signing this General Release of Claims, Employee is in fact waiving, releasing and forever giving up any claim under the ADEA as well as all other laws within the scope of this Section 1 that may have existed on or prior to the date hereof. Notwithstanding anything in this Section 1 to the contrary, this General Release of Claims shall not apply to (i) any right Employee has to the Severance Benefits; (ii) any rights to receive any payments or benefits to which the Employee is entitled under COBRA, (iii) any rights or claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iv) any indemnification and advancement rights Employee may have as a former employee, officer or director of the Company or its subsidiaries, and (v) any claims for benefits under any directors' and officers' liability policy maintained by the Company or its affiliates in accordance with the terms of such policy.

<sup>1</sup> **NTD**: The parties agree that the Company may revise the release in light of additional statutes or claims so that the Company receives the benefit of the fullest legally permissible release of claims and may also change the timing, if required, to obtain such release. *This footnote is part of the form of release and is to be removed only when the Company finalizes the release for execution*. If the release is due after the executive's death, the Company may revise and provide for a comparable release by Executive's estate or beneficiaries.

Employee understands and agrees that the claims released in this Section 1 include not only claims presently known to Employee, but also all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities and causes of action of every kind and character that would otherwise come within the scope of the released claims as described in this Section 1. Employee understands that Employee may hereafter discover facts different from what Employee now believes to be true that, if known, could have materially affected this General Release of Claims, but Employee nevertheless waives and releases any claims or rights based on different or additional facts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Employee represents that Employee has not filed against the Released Parties any complaints, charges, or lawsuits arising out of Employee's employment, or any other matter arising on or prior to the date of this General Release of Claims, and covenants and agrees that Employee will never individually or with any person file, or commence the filing of any lawsuits, complaints or proceedings with any governmental agency, or against the Released Parties with respect to any of the matters released by Employee pursuant to Section 1 hereof; except that nothing in this General Release of Claims, including the provisions of this Section and Section 1 above, shall prevent Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB), the Securities and Exchange Commission, or any other federal, state or local agency charged with the enforcement of any laws. However, to the extent any such charge or complaint or any other Claim is made against any of the Released Parties (including by the EEOC or NLRB), Employee expressly waives any claim to any form of monetary or other damages, or any other form of individual recovery or relief in connection with any such charge, complaint or claim other than as prohibited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Employee acknowledges that, in the absence of Employee's execution of this General Release of Claims, the Severance Benefits would not otherwise be due to him.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Employee acknowledges and reaffirms Employee's continuing obligations under Sections 7 and 8 of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Employee hereby acknowledges that the Company has informed Employee that Employee has up to 21 days to sign this General Release of Claims and Employee may knowingly and voluntarily waive that 21 day period by signing this General Release of Claims earlier. Employee also understands that Employee shall have seven days following the date on which Employee signs this General Release of Claims within which to revoke it by providing a written notice of Employee's revocation to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Employee acknowledges and agrees that all information (in paper or electronic form), materials and equipment of any kind that Employee created or acquired during the course of Employee's employment with the Company (collectively, "***Company Property***") are and remain the property of the Company. Such Company Property includes, without limitation, books, handbooks, manuals, files, papers, memoranda, letters, facsimiles, photographs/images, audio recordings/files, electronically stored information, software, computers, and smartphones. Employee agrees that Employee has an obligation to return all Company Property to the Company and covenants and represents that, as of Employee's execution of this Agreement, (i) Employee has returned to the Company all Company Property (including that in electronic form); (ii) Employee has not made or taken copies of such Company Property; and (iii) Employee has completely removed all electronically stored Company Property from all storage media in Employee's possession, custody or control, including, without limitation, from Employee's home computer system(s) and any external disk or flash drives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Employee acknowledges and agrees that this General Release of Claims shall in all respects be subject to, governed by and construed in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws thereof. Any dispute concerning this General Release of Claims shall be resolved pursuant to the dispute resolution provisions of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Employee acknowledges that Employee has read this General Release of Claims, that Employee has been advised that Employee should consult with an attorney before Employee executes this general release of claims, and that Employee understands all of its terms and executes it voluntarily and with full knowledge of its significance and the consequences thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. This General Release of Claims shall become irrevocable on the eighth day following Employee's execution of this General Release of Claims, unless previously revoked in accordance with Section 5 above.

Intending to be legally bound hereby, Employee has executed this General Release of Claims on ______________.

  <br> Mark D. Roberson

## Exhibit 10.12

**Exhibit 10.12**

**EMPLOYMENT AGREEMENT**

**THIS EMPLOYMENT AGREEMENT** (this "Agreement") is made and entered into as of [●], by and between Strong Technical Services, Inc., a Nebraska corporation (the "Company"), and Todd Major, a South Carolina resident (the "Employee").

WHEREAS, the Company desires to employ Employee, and Employee desires to accept such employment, on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of mutual promises and covenants herein contained, the parties hereto intending to become legally bound agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Employment</u>. The Company hereby agrees to employ the Employee and the Employee hereby agrees to be employed by the Company upon the terms and conditions hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Duties and Services</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Title and Duties</u>. During the Employment Period (defined in Section 3 below), the services rendered by Employee hereunder shall be for the Company's parent, Strong Global Entertainment, Inc. ("SGE"). The Employee shall serve as Chief Financial Officer, Secretary and Treasurer of SGE and shall perform such duties as are customary for such role in a public company registered with the Securities and Exchange Commission and listed on a national securities exchange and such other duties as may be assigned to him from time to time by the Chief Executive Officer of SGE, which services may include serving as an officer or director of a subsidiary or affiliate of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Time</u>. The Employee shall devote his sufficient business time and attention to the business of SGE and to the promotion of SGE's best interest, subject to vacations, holidays and normal illnesses pursuant to the Company's policies in place from time to time. The Employee shall at all times comply with Company policies in place from time to time, including but not limited to the Company's Code of Ethics. The Company acknowledges and agrees that Employee's provision of services hereunder is non-exclusive and that Employee is also currently employed by an indirect majority owner of SGE, FG Group Holdings, Inc. ("FG Group Holdings"), which employment may be conflict with Employee's employment with the Company and services to SGE. In the event of any such conflict of interest, Employee shall comply with the SGE's conflict of interest policies and communicate any such conflict of interest to the SGE Board or Audit Committee, as appropriate, and be disclosed in appropriate public documents (e.g. Proxy Statements, 8-K, 10-K, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Travel</u>. The Employee shall undertake such travel as may be necessary and desirable to promote the business and affairs of SGE, consistent with the Employee's position and duties with the Company and SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Term of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Employee's employment hereunder shall commence on [●] (the "Commencement Date"). The Employee's employment will be "at-will," meaning that either the Employee or the Company may terminate the Employee's employment at any time and for any reason, with or without cause. The period during which Employee is employed hereunder shall be referred to herein as the "Employment Period").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 In the event Employee is terminated by the Company at any time without Cause (defined in Section 3.4 below), Employee will be entitled to the following (collectively, the "Severance Benefits"), subject to the terms of Section 3.3 below): (i) severance pay in the amount of one (1) year of the Employee's base salary at the time of termination ("Severance Pay") and (ii) if Employee timely and properly elects continuation health coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the Company shall pay Employee's COBRA premiums for a period of twelve (12) months following the date of Employee's termination of employment (the "Termination Date"). The Severance Pay shall be payable over a period of twelve (12) months following the Termination Date in accordance with the Company's regular payroll practices, commencing within ninety (90) days following the Termination Date on the first regularly scheduled payroll date of the Company that is practicable after the effective date of the General Release (defined in Section 3.3 below), *except* that, if the General Release may be executed and/or revoked in a calendar year following the calendar year in which the Termination Date occurs, the Severance Pay shall commence on the first regularly scheduled payroll date of the Company in the calendar year in which the consideration or, if applicable, release revocation period ends to the extent necessary to comply with Section 409A (as defined in Section 12.1 below). The first such payment shall include payment for any payroll dates between the Termination Date and the date of such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Employee's receipt of the Severance Benefits is conditioned on Employee signing (without revoking if such right is provided under applicable law general release substantially in the form attached hereto as <u>Exhibit A</u> (the "<u>General Release</u>"), which form may be modified as necessary by the Company to comply with applicable law and to specify the date by which Employee must execute and return the General Release for it to be effective. Such General Release shall be provided to Employee by the Company on or about the Termination Date. Employee must execute the General Release within 60 days following the Termination Date (or such shorter time as may be set forth in the General Release).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 For purposes of this Agreement, "Cause" shall mean: (i) Employee's willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness); (ii) Employee's willful failure to comply with any valid and legal directive of the Company's or SGE's Board of Directors; (iii) Employee's willful engagement in dishonesty, illegal conduct, or misconduct, which is, in each case, materially injurious to the Company, SGE or their affiliates; (iv) Employee's embezzlement, misappropriation, or fraud, whether or not related to Employee's employment with the Company; (v) Employee's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude; or (vi) Employee's material breach of any material obligation under this Agreement or any other written agreement between Employee and the Company or SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Base Salary</u>. For all of the services to be rendered by the Employee under this Agreement, during the Employment Period, the Company shall pay the Employee a base salary equal to $225,000 (the "Base Salary"). The compensation paid hereunder to the Employee shall be paid in accordance with the normal payroll practices of the Company and shall be subject to the customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an employee. The Base Salary will be subject to annual review and adjustment by SGE's Board of Directors based upon the Employee's performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Annual Bonus</u>. Commencing with respect to the Company's 2023 fiscal year, the Employee will be eligible to receive a bonus in an amount targeted at 50% of base salary, payable in a combination of cash and equity in the Company, as determined by the Chief Executive Officer and Compensation Committee of SGE's Board of Directors. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Chief Executive Officer and Compensation Committee of the SGE Board of Directors. Any equity grants will vest over a period of three to five years from the date of grant as determined by SGE's Compensation Committee. Any equity award shall be evidenced by and subject to the terms and conditions of an Award Agreement entered into between SGE and the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Bonus</u>. Employee is entitled to receive a cash bonus in an amount up to $150,000, payable at the discretion of the Compensation Committee of SGE's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>IPO RSU Grant</u>. Subject to the approval of SGE's Board of Directors, Employee will be granted upon the initial public offering of SGE (the "IPO") 25,000 restricted stock units of SGE, pursuant to the terms and conditions of the Company's 2023 Share Compensation Plan and related restricted stock unit ("RSU") award agreement. Such RSUs shall be fully-vested upon their grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Other RSU Grant</u>. Subject to the approval of SGE's Board of Directors, Employee will be granted upon the IPO 25,000 RSUs of SGE, pursuant to the terms and conditions of the Company's 2023 Share Compensation Plan and related RSU award agreement. Subject to the terms of such award agreement, such RSUs shall vest in three (3) equal annual installments on the first, second and third year anniversaries of the date of the IPO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Vacation</u>. The Employee shall be entitled to vacation of up to four (4) weeks per calendar year, pursuant to the applicable Company policy. All vacations shall be in addition to recognized national holidays. During all vacations, the Employee's compensation and other benefits as stated herein shall continue to be paid in full. Such vacations shall be taken only at times convenient for SGE, as approved by the SGE's Chief Executive Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Company Benefit Programs</u>. In addition to the compensation and to the rights provided for elsewhere in this Agreement, the Employee shall be entitled to participate in each plan of the Company now or hereafter adopted and in effect from time to time for the benefit of Employee employees of the Company, to the extent permitted by such plans and by applicable law. Nothing in this Agreement shall limit the Company's right to amend, modify and/or terminate any benefit plan, policies or programs at any time for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Restrictive Covenants and Need for Protection</u>. Employee acknowledges that, because of his senior Employee position with the Company, he has or will develop knowledge of the affairs of the Company and its subsidiaries and their relationships with dealers, distributors and customers such that he could do serious damage to the financial welfare of the Company and/or its subsidiaries should he compete or assist others in competing with the business of the Company and/or its subsidiaries. Consequently, and in consideration of his employment with the Company, and for the benefits he is to receive under this Agreement, and for other good and valuable consideration, the receipt of which he hereby acknowledges, the Employee agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Confidential Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 <u>Non-disclosure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as the Company or SGE may permit or direct in writing, during the term of this Agreement and thereafter, the Employee agrees that he will not disclose to any person or entity any Confidential Information (defined in Section 7.1.1(b) below which he may have obtained while in the employ of the Company, relating to any customers, customer lists, methods, distribution, sales, prices, profits, costs, contracts, inventories, suppliers, dealers, distributors, business prospects, business methods, manufacturing ideas, formulas, plans or techniques, research, trade secrets, or know-how of the SGE Group. Nothing contained in this Agreement shall limit the Employee's ability to respond to a lawful subpoena; to make a report to or cooperate with any government agency, including without limitation the ability to participate in an investigation, provide information, and recover any remuneration awarded for doing so; and to comply with any other legal obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For purposes of this Agreement, "Confidential Information" means all information of a confidential or proprietary nature regarding SGE, the Company or any of SGE's subsidiaries (the "SGE Group"), their respective business or properties that the SGE Group has furnished or furnishes to Employee, whether before or after the date of this Agreement, or is or becomes available to Employee by virtue of Employee's employment with the Company, whether tangible or intangible, and in whatever form or medium provided, as well as all such information generated by Employee that, in each case, has not been published or disclosed to, and is not otherwise known to, the public. Confidential Information includes, without limitation, customer lists, customer requirements and specifications, designs, financial data, sales figures, costs and pricing figures, marketing and other business plans, product development, marketing concepts, personnel matters (including employee skills and compensation), drawings, specifications, instructions, methods, processes, techniques, computer software or data of any sort developed or compiled by the SGE Group, formulae or any other information relating to the SGE's services, products, sales, technology, research data, software and all other know-how, trade secrets or proprietary information, or any copies, elaborations, modifications and adaptations thereof. For the avoidance of doubt, Employee acknowledges and agrees that Confidential Information protected under this Agreement includes information regarding pay, bonuses, benefits and perquisites offered to or received by employees of the Company, as well as non-public information regarding the unique and special skills of specific employees and how such skills are valuable and integral to the Company's operations. Notwithstanding the foregoing, Confidential Information shall not include any information (i) that is generally known to the industry or the public other than as a result of Employee's breach of this covenant; (ii) that is made available to Employee by a third party without that party's breach of any confidentiality obligation; or (iii) which was developed by Employee outside or independent of Employee's performance of Employee's obligation to render services on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Employee acknowledges that Employee has been notified in accordance with the federal Uniform Trade Secrets Act (18 U.S. Code § 1833(b)(1)) that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; *and* (ii) solely for the purpose of reporting or investigating a suspected violation of law; *or* (b) is made in a complaint or other document filed in a lawsuit or other proceeding, *if* such filing is made under seal. Employee also acknowledges that nothing in this Agreement shall be construed to prohibit Employee from reporting possible violations of law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Covenant Not to Compete</u>. During the Employee's employment and for a period of one (1) year thereafter, the Employee agrees that he will not participate in or finance, directly or indirectly, for himself or on behalf of any third party, anywhere in the world, as principal, agent, employee, employer, consultant, investor or partner, or assist in the management of, or own any stock or any other ownership interest in, any business that is materially competitive with the business of the SGE Group, as conducted at any time during the twelve-month period prior to the time in question. Notwithstanding the foregoing, the ownership of not more than two percent (2%) of the outstanding securities of any company listed on any public exchange or regularly traded in the over-the-counter market, *provided* that the Employee's involvement with any such company is solely that of a passive security holder and the Employee discloses such ownership in advance to the Company's Board of Directors, shall not constitute a violation of this paragraph. Employee acknowledges that the SGE Group does business throughout the world and, thus, it is necessary and appropriate to have this covenant not to compete apply world-wide in order to protect the SGE Group's legitimate interests in its Confidential Information and close customer relationships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Covenant Not to Solicit</u>. The Employee agrees that he will not, during the Employee's employment and for a period of one (1) year thereafter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) directly or indirectly, request or advise any of the customers, distributors or dealers of the SGE Group to terminate or curtail their business with the SGE Group, or to patronize another business which is materially competitive with the SGE Group; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) directly or indirectly, on behalf of himself or any other person or entity, request, advise or solicit any person who is then or was in the prior six months an employee of the SGE Group to leave such employment for any reason or to hire any such person as an employee or independent contractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Judicial Modification</u>. In the event that any court of law or equity shall consider or hold any aspect of this Section 7 to be unreasonable or otherwise unenforceable, the parties hereto agree that the aspect of this Section so found may be reduced or modified by appropriate order of the court and shall thereafter continue, as so modified, in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Injunctive Relief</u>. The parties hereto acknowledge that the remedies at law for breach of this Section 7 will be inadequate, and that the Company shall be entitled to injunctive relief for violation thereof; *provided,* however, that nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Inventions and Discoveries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>SGE Proprietary Rights</u>. Employee acknowledges and agrees that all Intellectual Property (defined below) created, made or conceived by Employee (solely or jointly) during Employee's employment by the Company (regardless of whether such Intellectual Property was created, conceived or produced during Employee's regular work hours or at any other time) that relates to the actual or anticipated businesses of the SGE Group or results from or is suggested by any work performed by employees or independent contractors for or on behalf of the SGE Group ("<u>SGE Intellectual Property</u>") shall be deemed "work for hire" and shall be and remain the sole and exclusive property of SGE for any and all purposes and uses whatsoever as soon as Employee conceives or develops such SGE Intellectual Property, and Employee hereby agrees that its assigns, executors, heirs, administrators or personal representatives shall have no right, title or interest of any kind or nature therein or thereto, or in or to any results and proceeds therefrom. If for any reason such SGE Intellectual Property is not deemed to be "work-for-hire," then Employee hereby irrevocably and unconditionally assigns all rights, title, and interest in such SGE Intellectual Property to SGE and agrees that SGE is under no further obligation, monetary or otherwise, to Employee for such assignment. Employee also hereby waives all claims to any moral rights or other special rights ("<u>Moral Rights</u>"), including, without limitation, all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights," "artist's rights," "droit moral" or the like, that Employee may have or may accrue in any SGE Intellectual Property. To the extent that any such Moral Rights cannot be assigned under applicable law, Employee hereby ratifies and consents to any action that may be taken with respect to such Moral Rights by or on behalf of the Company and waives and agrees not to enforce any and all such rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under applicable law. Employee shall promptly disclose in writing to SGE the existence of any and all SGE Intellectual Property. As used in this Agreement, "<u>Intellectual Property</u>" shall mean and include any ideas, inventions (whether or not patentable), designs, improvements, discoveries, innovations, patents, patent applications, trademarks, service marks, trade dress, trade names, trade secrets, works of authorship, copyrights, copyrightable works, films, audio and video tapes, other audio and visual works of any kind, scripts, sketches, models, formulas, tests, analyses, software, firmware, computer processes, computer and other applications, creations and properties, Confidential Information and any other patents, inventions or works of creative authorship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 Employee agrees to communicate promptly and to disclose to SGE in such form as the Employee may be required to do so, all information, details and data pertaining to SGE Intellectual Property and to execute and deliver to SGE such formal transfers and assignments and such other papers and documents as may be required of the Employee to permit SGE or any person or entity designated by SGE to file and prosecute the patent applications, and, as to copyrightable material, to obtain copyrights thereof. Employee represents and warrants to the Company that all Intellectual Property Employee delivers to the Company shall be original and shall not infringe upon or violate any patent, copyright or proprietary right of any person or third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 To the extent this Agreement is required to be construed in accordance with laws of any state which precludes as a requirement in an employee agreement the assignment of certain classes of inventions made by an employee, this Section 8 will be interpreted not to apply to any invention which a court rules and/or SGE agrees falls within such classes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Tax Withholding</u>. All payments made and benefits provided by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Survival of Obligations</u>. All obligations of the Company and the Employee that by their nature involve performance, in any particular, after the termination of the Employee's employment or the term of this Agreement, or that cannot be ascertained to have been fully performed until after the termination of Employee's employment or the term of this Agreement, will survive the expiration or termination of the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Officer Resignation</u>. Upon termination of his employment with the Company for any reason, the Employee shall resign, as of the date of such termination, from any corporate office or director position held with the Company or any member of the SGE Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Miscellaneous</u>. The following miscellaneous sections shall apply to this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Section 409A Compliance</u>. To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code and the guidance promulgated thereunder ("Section 409A"). This Agreement shall be administered in a manner consistent with this intent, and any provision that would cause the Agreement to fail to satisfy Section 409A shall have no force and effect until amended by the parties to comply with Section 409A (which amendment may be retroactive to the extent permitted by Section 409A). Unless otherwise expressly provided, any payment of compensation by Company to Employee, whether pursuant to this Agreement or otherwise, shall be made no later than the 15<sup>th</sup> day of the third month (*i.e*., 2½ months) after the later of the end of the calendar year or the Company's fiscal year in which Employee's right to such payment vests (*i.e*., is not subject to a "substantial risk of forfeiture" for purposes of Code Section 409A). For purposes of this Agreement, "Separation from Service" shall have the meaning given to such term under Section 409A. Each payment and each installment of any severance payments provided for under this Agreement shall be treated as a separate payment for purposes of application of Section 409A. To the extent that any severance payments come within the definition of "short term deferrals" or "involuntary severance" under Section 409A, such amounts shall be excluded from "deferred compensation" as allowed under Section 409A, and shall *not* be subject to the following Section 409A compliance requirements. All payments of "nonqualified deferred compensation" (within the meaning of Section 409A) are intended to comply with the requirements of Section 409A, and shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate, offset or assign any such deferred payment, except in compliance with Section 409A. No amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A and Employee shall have no discretion with respect to the timing of payments except as permitted under Section 409A. Any payments to which Section 409A applies which are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as Separation from Service) occurs shall commence payment only in the calendar year in which the release revocation period ends as necessary to comply with Section 409A. In the event that Employee is determined to be a "key employee" (as defined and determined under Section 409A) of the Company at a time when its stock is deemed to be publicly traded on an established securities market, payments determined to be "nonqualified deferred compensation" payable upon separation from service shall be made no earlier than (i) the first day of the seventh (7<sup>th</sup>) complete calendar month following such termination of employment, or (ii) Employee's death, consistent with the provisions of Section 409A. Any payment delayed by reason of the prior sentence shall be paid out in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule. All expense reimbursement or in-kind benefits subject to Section 409A provided under this Agreement or, unless otherwise specified in writing, under any Company program or policy, shall be subject to the following rules: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided during one calendar year may not affect the benefits provided during any other year; (ii) reimbursements shall be paid no later than the end of the calendar year following the year in which the Employee incurs such expenses, and the Employee shall take all actions necessary to claim all such reimbursements on a timely basis to permit the Company to make all such reimbursement payments prior to the end of said period, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything herein to the contrary, no amendment may be made to this Agreement if it would cause the Agreement or any payment hereunder not to be in compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>280G</u>. If any payment or distribution by the Company to or for the benefit of Employee under this Agreement or any other plans or arrangements between the parties would be subject to the deduction limitations and excise tax imposed by Sections 280G and 4999 of the Internal Revenue Code (including any applicable interest and penalties, collectively "excise taxes"), then the parties agree to take such action as may be necessary to place Employee in the best after-tax position taking into account all income, employment and excise taxes, without regard to the deductibility of any payments by the Company. Thus, for example, any amount deemed to constitute a "parachute payment" under Section 280G, shall be reduced to the extent necessary to avoid excise taxes that would otherwise be imposed if, and only if, such reduction would result in Employee retaining a larger total after-tax amount of compensation, taking into account all Employee compensation, benefits, income, employment and excise taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Modifications and Waivers</u>. No provision of this Agreement may be modified, waived or discharged unless that modification, waiver or discharge is agreed to in writing by the Employee and the Company. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by that other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time, or at any prior or subsequent time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Construction of Agreement</u>. This Agreement supersedes any oral or written agreements between the Employee and the Company and any oral representations by the Company to the Employee with respect to the subject matter of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Governing Law</u>. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Severability</u>. If any one or more of the provisions of this Agreement, including but not limited to Section 7 above, or any word, phrase, clause, sentence or other portion of a provision is deemed illegal or unenforceable for any reason, that provision or portion will be modified or deleted in such a manner as to make this Agreement as modified legal and enforceable to the fullest extent permitted under applicable laws. The validity and enforceability of the remaining provisions or portions will remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which will take effect as an original and all of which will evidence one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Successors and Assigns</u>. This Agreement shall be binding upon, and shall inure to the benefit of the parties hereto and their respective heirs, beneficiaries, personal representatives, successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>Notices</u>. Any notice, request or other communication required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered in person, on the next business day after being delivered to a nationally-recognized overnight courier service (for such next-day delivery) or five (5) days after being deposited in the United States mail, certified or registered, postage prepaid, return receipt requested and addressed to the other party at the respective addressees set forth below or to the other addresses of either party may have furnished to the other in writing in accordance with this Section 12.7, except that notice of change of address will be effective only upon receipt.

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| | |
|:---|:---|
| If to Company: | 5960 Fairview Road, Suite 275 |
|  | Charlotte, NC 28210 |
| If to Employee: | At the address for the Employee most recently on file with the Company. |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Entire Agreement</u>. This Agreement contains the entire agreement of the parties. All prior arrangements or understandings, whether written or oral, are merged herein. This Agreement may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

[*The remainder of this page is intentionally blank; signature page follows*.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

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| | | | |
|:---|:---|:---|:---|
| STRONG TECHNICAL SERVICES, INC. | STRONG TECHNICAL SERVICES, INC. | EMPLOYEE | EMPLOYEE |
| By: |  | By: |  |
| Name: | [●] | Name: | Todd Major |
| Title: | [●] | Date: | [●] |
| Date: | [●] |  |  |

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[*Signature page to Employment Agreement*.]

**EXHIBIT A**

**General Release of Claims **<sup>1</sup>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Todd Major ("***Employee***"), for Employee and Employee's family, heirs, executors, administrators, legal representatives and their respective successors and assigns, in exchange for the consideration received pursuant to Section 3.2 of the Employment Agreement (the "***Severance Benefits***") to which this release is attached as Exhibit A (the "***Employment Agreement***"), does hereby release and forever discharge Strong Technical Services, Inc. (the "***Company***"), Strong Global Entertainment, Inc., their respective former and current parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns, and each of their former and current agents, employees, officers, directors, shareholders, members, partners, trustees, heirs, joint venturers, attorneys, representatives, owners and servants (collectively, the "***Released Partie****s*") from any and all actions, causes of action, suits, controversies, claims and demands whatsoever (collectively, "**Claims**"), whether known or unknown, that Employee ever had, now has or may have based upon any matter, fact, cause or thing, occurring from the beginning of time up to and including the date Employee executes this General Release of Claims, including, without limitation, all Claims regarding Employee's employment with the Company, any events that may have occurred during the course of Employee's employment or the termination of Employee's employment, or any other matters or Claims of any kind or nature. This includes, without limitation, a release of any and all Claims for unpaid wages, holiday pay, overtime, bonuses or other compensation, breach of contract, wrongful discharge, disability benefits, life, health and medical insurance, sick leave, or any other fringe benefit, employment discrimination, unlawful harassment, retaliation, emotional distress, violations of public policy, defamation, fraudulent misrepresentation or inducements and severance pay and any other federal, state or local laws, statutes, rules, ordinances or regulations, whether equal employment laws, statutes, rules or regulations or otherwise. Without limiting the generality of the release provided above, Employee expressly waives any and all claims under Age Discrimination in Employment Act ("***ADEA***") that Employee may have as of the date hereof. Employee further understands that, by signing this General Release of Claims, Employee is in fact waiving, releasing and forever giving up any claim under the ADEA as well as all other laws within the scope of this Section 1 that may have existed on or prior to the date hereof. Notwithstanding anything in this Section 1 to the contrary, this General Release of Claims shall not apply to (i) any right Employee has to the Severance Benefits; (ii) any rights to receive any payments or benefits to which the Employee is entitled under COBRA, (iii) any rights or claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iv) any indemnification and advancement rights Employee may have as a former employee, officer or director of the Company or its subsidiaries, and (v) any claims for benefits under any directors' and officers' liability policy maintained by the Company or its affiliates in accordance with the terms of such policy.

<sup>1</sup> **NTD**: The parties agree that the Company may revise the release in light of additional statutes or claims so that the Company receives the benefit of the fullest legally permissible release of claims and may also change the timing, if required, to obtain such release. *This footnote is part of the form of release and is to be removed only when the Company finalizes the release for execution*. If the release is due after the executive's death, the Company may revise and provide for a comparable release by Executive's estate or beneficiaries.

Employee understands and agrees that the claims released in this Section 1 include not only claims presently known to Employee, but also all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities and causes of action of every kind and character that would otherwise come within the scope of the released claims as described in this Section 1. Employee understands that Employee may hereafter discover facts different from what Employee now believes to be true that, if known, could have materially affected this General Release of Claims, but Employee nevertheless waives and releases any claims or rights based on different or additional facts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Employee represents that Employee has not filed against the Released Parties any complaints, charges, or lawsuits arising out of Employee's employment, or any other matter arising on or prior to the date of this General Release of Claims, and covenants and agrees that Employee will never individually or with any person file, or commence the filing of any lawsuits, complaints or proceedings with any governmental agency, or against the Released Parties with respect to any of the matters released by Employee pursuant to Section 1 hereof; except that nothing in this General Release of Claims, including the provisions of this Section and Section 1 above, shall prevent Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB), the Securities and Exchange Commission, or any other federal, state or local agency charged with the enforcement of any laws. However, to the extent any such charge or complaint or any other Claim is made against any of the Released Parties (including by the EEOC or NLRB), Employee expressly waives any claim to any form of monetary or other damages, or any other form of individual recovery or relief in connection with any such charge, complaint or claim other than as prohibited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Employee acknowledges that, in the absence of Employee's execution of this General Release of Claims, the Severance Benefits would not otherwise be due to him.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Employee acknowledges and reaffirms Employee's continuing obligations under Sections 7 and 8 of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Employee hereby acknowledges that the Company has informed Employee that Employee has up to 21 days to sign this General Release of Claims and Employee may knowingly and voluntarily waive that 21 day period by signing this General Release of Claims earlier. Employee also understands that Employee shall have seven days following the date on which Employee signs this General Release of Claims within which to revoke it by providing a written notice of Employee's revocation to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Employee acknowledges and agrees that all information (in paper or electronic form), materials and equipment of any kind that Employee created or acquired during the course of Employee's employment with the Company (collectively, "***Company Property***") are and remain the property of the Company. Such Company Property includes, without limitation, books, handbooks, manuals, files, papers, memoranda, letters, facsimiles, photographs/images, audio recordings/files, electronically stored information, software, computers, and smartphones. Employee agrees that Employee has an obligation to return all Company Property to the Company and covenants and represents that, as of Employee's execution of this Agreement, (i) Employee has returned to the Company all Company Property (including that in electronic form); (ii) Employee has not made or taken copies of such Company Property; and (iii) Employee has completely removed all electronically stored Company Property from all storage media in Employee's possession, custody or control, including, without limitation, from Employee's home computer system(s) and any external disk or flash drives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Employee acknowledges and agrees that this General Release of Claims shall in all respects be subject to, governed by and construed in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws thereof. Any dispute concerning this General Release of Claims shall be resolved pursuant to the dispute resolution provisions of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Employee acknowledges that Employee has read this General Release of Claims, that Employee has been advised that Employee should consult with an attorney before Employee executes this general release of claims, and that Employee understands all of its terms and executes it voluntarily and with full knowledge of its significance and the consequences thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. This General Release of Claims shall become irrevocable on the eighth day following Employee's execution of this General Release of Claims, unless previously revoked in accordance with Section 5 above.

Intending to be legally bound hereby, Employee has executed this General Release of Claims on ______________.

<br> Todd Major

## Exhibit 10.13

**Exhibit 10.13**

**EMPLOYMENT AGREEMENT**

**THIS EMPLOYMENT AGREEMENT** (this "Agreement") is made and entered into as of [●], by and between Strong Technical Services, Inc., a Nebraska corporation (the "Company"), and Ray F. Boegner, a Nebraska resident (the "Employee").

WHEREAS, the Company desires to employ Employee, and Employee desires to accept such employment, on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of mutual promises and covenants herein contained, the parties hereto intending to become legally bound agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Employment</u>. The Company hereby agrees to employ the Employee and the Employee hereby agrees to be employed by the Company upon the terms and conditions hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Duties and Services</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Title and Duties</u>. During the Employment Period (defined in Section 3 below), the services rendered by Employee hereunder shall be for the Company's parent, Strong Global Entertainment, Inc. ("SGE"). The Employee shall serve as President of SGE and shall perform such duties as are customary for such role in a public company registered with the Securities and Exchange Commission and listed on a national securities exchange and such other duties as may be assigned to him from time to time by the Chief Executive Officer of SGE, which services may include serving as an officer or director of a subsidiary or affiliate of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Time</u>. The Employee shall devote his sufficient business time and attention to the business of SGE and to the promotion of SGE's best interest, subject to vacations, holidays and normal illnesses pursuant to the Company's policies in place from time to time. The Employee shall at all times comply with Company policies in place from time to time, including but not limited to the Company's Code of Ethics. The Company acknowledges and agrees that Employee's provision of services hereunder is non-exclusive and that Employee is also currently employed by an indirect majority owner of SGE, FG Group Holdings, Inc. ("FG Group Holdings"), which employment may be conflict with Employee's employment with the Company and services to SGE. In the event of any such conflict of interest, Employee shall comply with the SGE's conflict of interest policies and communicate any such conflict of interest to the SGE Board or Audit Committee, as appropriate, and be disclosed in appropriate public documents (e.g. Proxy Statements, 8-K, 10-K, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Travel</u>. The Employee shall undertake such travel as may be necessary and desirable to promote the business and affairs of SGE, consistent with the Employee's position and duties with the Company and SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Term of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Employee's employment hereunder shall commence on [●] (the "Commencement Date"). The Employee's employment will be "at-will," meaning that either the Employee or the Company may terminate the Employee's employment at any time and for any reason, with or without cause. The period during which Employee is employed hereunder shall be referred to herein as the "Employment Period").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 In the event Employee is terminated by the Company at any time without Cause (defined in Section 3.4 below), Employee will be entitled to the following (collectively, the "Severance Benefits"), subject to the terms of Section 3.3 below): (i) severance pay in the amount of one hundred and eight (108) weeks of the Employee's base salary at the time of termination ("Severance Pay") and (ii) if Employee timely and properly elects continuation health coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the Company shall pay Employee's COBRA premiums for the lesser of (i) a period of one hundred and eight (108) weeks following the date of Employee's termination of employment (the "Termination Date") or (ii) the period following the Termination Date during which Employee is eligible to receive continuation coverage under COBRA (or applicable analogous state law). The Severance Pay shall be payable over a period of one hundred and eight (108) weeks following the Termination Date in accordance with the Company's regular payroll practices, commencing within ninety (90) days following the Termination Date on the first regularly scheduled payroll date of the Company that is practicable after the effective date of the General Release (defined in Section 3.3 below), *except* that, if the General Release may be executed and/or revoked in a calendar year following the calendar year in which the Termination Date occurs, the Severance Pay shall commence on the first regularly scheduled payroll date of the Company in the calendar year in which the consideration or, if applicable, release revocation period ends to the extent necessary to comply with Section 409A (as defined in Section 12.1 below). The first such payment shall include payment for any payroll dates between the Termination Date and the date of such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Employee's receipt of the Severance Benefits is conditioned on Employee signing (without revoking if such right is provided under applicable law general release substantially in the form attached hereto as <u>Exhibit A</u> (the "<u>General Release</u>"), which form may be modified as necessary by the Company to comply with applicable law and to specify the date by which Employee must execute and return the General Release for it to be effective. Such General Release shall be provided to Employee by the Company on or about the Termination Date. Employee must execute the General Release within 60 days following the Termination Date (or such shorter time as may be set forth in the General Release).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 For purposes of this Agreement, "Cause" shall mean: (i) Employee's willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness); (ii) Employee's willful failure to comply with any valid and legal directive of the Company's or SGE's Board of Directors; (iii) Employee's willful engagement in dishonesty, illegal conduct, or misconduct, which is, in each case, materially injurious to the Company, SGE or their affiliates; (iv) Employee's embezzlement, misappropriation, or fraud, whether or not related to Employee's employment with the Company; (v) Employee's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude; or (vi) Employee's material breach of any material obligation under this Agreement or any other written agreement between Employee and the Company or SGE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Base Salary</u>. For all of the services to be rendered by the Employee under this Agreement, during the Employment Period, the Company shall pay the Employee a base salary equal to $275,000 (the "Base Salary"). The compensation paid hereunder to the Employee shall be paid in accordance with the normal payroll practices of the Company and shall be subject to the customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an employee. The Base Salary will be subject to annual review and adjustment by SGE's Board of Directors based upon the Employee's performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Annual Bonus</u>. Commencing with respect to the Company's 2023 fiscal year, the Employee will be eligible to receive a bonus in an amount targeted at 50% of base salary, payable in a combination of cash and equity in the Company, as determined by the Chief Executive Officer and Compensation Committee of SGE's Board of Directors. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Chief Executive Officer and Compensation Committee of the SGE Board of Directors. Any equity grants will vest over a period of three to five years from the date of grant as determined by SGE's Compensation Committee. Any equity award shall be evidenced by and subject to the terms and conditions of an Award Agreement entered into between SGE and the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Bonus</u>. Employee is entitled to receive a cash bonus in an amount up to $50,000, payable at the discretion of the Compensation Committee of SGE's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>IPO RSU Grant</u>. Subject to the approval of SGE's Board of Directors, Employee will be granted upon the initial public offering of SGE (the "IPO") 25,000 restricted stock units of SGE, pursuant to the terms and conditions of the Company's 2023 Share Compensation Plan and related restricted stock unit ("RSU") award agreement. Such RSUs shall be fully-vested upon their grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Other RSU Grant</u>. Subject to the approval of SGE's Board of Directors, Employee will be granted upon the IPO 25,000 RSUs of SGE, pursuant to the terms and conditions of the Company's 2023 Share Compensation Plan and related RSU award agreement. Subject to the terms of such award agreement, such RSUs shall vest in three (3) equal annual installments on the first, second and third year anniversaries of the date of the IPO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Vacation</u>. The Employee shall be entitled to vacation of up to four (4) weeks per calendar year, pursuant to the applicable Company policy. All vacations shall be in addition to recognized national holidays. During all vacations, the Employee's compensation and other benefits as stated herein shall continue to be paid in full. Such vacations shall be taken only at times convenient for SGE, as approved by the SGE's Chief Executive Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Company Benefit Programs</u>. In addition to the compensation and to the rights provided for elsewhere in this Agreement, the Employee shall be entitled to participate in each plan of the Company now or hereafter adopted and in effect from time to time for the benefit of Employee employees of the Company, to the extent permitted by such plans and by applicable law. Nothing in this Agreement shall limit the Company's right to amend, modify and/or terminate any benefit plan, policies or programs at any time for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Restrictive Covenants and Need for Protection</u>. Employee acknowledges that, because of his senior Employee position with the Company, he has or will develop knowledge of the affairs of the Company and its subsidiaries and their relationships with dealers, distributors and customers such that he could do serious damage to the financial welfare of the Company and/or its subsidiaries should he compete or assist others in competing with the business of the Company and/or its subsidiaries. Consequently, and in consideration of his employment with the Company, and for the benefits he is to receive under this Agreement, and for other good and valuable consideration, the receipt of which he hereby acknowledges, the Employee agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Confidential Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 <u>Non-disclosure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as the Company or SGE may permit or direct in writing, during the term of this Agreement and thereafter, the Employee agrees that he will not disclose to any person or entity any Confidential Information (defined in Section 7.1.1(b) below which he may have obtained while in the employ of the Company, relating to any customers, customer lists, methods, distribution, sales, prices, profits, costs, contracts, inventories, suppliers, dealers, distributors, business prospects, business methods, manufacturing ideas, formulas, plans or techniques, research, trade secrets, or know-how of the SGE Group. Nothing contained in this Agreement shall limit the Employee's ability to respond to a lawful subpoena; to make a report to or cooperate with any government agency, including without limitation the ability to participate in an investigation, provide information, and recover any remuneration awarded for doing so; and to comply with any other legal obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For purposes of this Agreement, "Confidential Information" means all information of a confidential or proprietary nature regarding SGE, the Company or any of SGE's subsidiaries (the "SGE Group"), their respective business or properties that the SGE Group has furnished or furnishes to Employee, whether before or after the date of this Agreement, or is or becomes available to Employee by virtue of Employee's employment with the Company, whether tangible or intangible, and in whatever form or medium provided, as well as all such information generated by Employee that, in each case, has not been published or disclosed to, and is not otherwise known to, the public. Confidential Information includes, without limitation, customer lists, customer requirements and specifications, designs, financial data, sales figures, costs and pricing figures, marketing and other business plans, product development, marketing concepts, personnel matters (including employee skills and compensation), drawings, specifications, instructions, methods, processes, techniques, computer software or data of any sort developed or compiled by the SGE Group, formulae or any other information relating to the SGE's services, products, sales, technology, research data, software and all other know-how, trade secrets or proprietary information, or any copies, elaborations, modifications and adaptations thereof. For the avoidance of doubt, Employee acknowledges and agrees that Confidential Information protected under this Agreement includes information regarding pay, bonuses, benefits and perquisites offered to or received by employees of the Company, as well as non-public information regarding the unique and special skills of specific employees and how such skills are valuable and integral to the Company's operations. Notwithstanding the foregoing, Confidential Information shall not include any information (i) that is generally known to the industry or the public other than as a result of Employee's breach of this covenant; (ii) that is made available to Employee by a third party without that party's breach of any confidentiality obligation; or (iii) which was developed by Employee outside or independent of Employee's performance of Employee's obligation to render services on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Employee acknowledges that Employee has been notified in accordance with the federal Uniform Trade Secrets Act (18 U.S. Code § 1833(b)(1)) that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; *and* (ii) solely for the purpose of reporting or investigating a suspected violation of law; *or* (b) is made in a complaint or other document filed in a lawsuit or other proceeding, *if* such filing is made under seal. Employee also acknowledges that nothing in this Agreement shall be construed to prohibit Employee from reporting possible violations of law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Covenant Not to Compete</u>. During the Employee's employment and for a period of one (1) year thereafter, the Employee agrees that he will not participate in or finance, directly or indirectly, for himself or on behalf of any third party, anywhere in the world, as principal, agent, employee, employer, consultant, investor or partner, or assist in the management of, or own any stock or any other ownership interest in, any business that is materially competitive with the business of the SGE Group, as conducted at any time during the twelve-month period prior to the time in question. Notwithstanding the foregoing, the ownership of not more than two percent (2%) of the outstanding securities of any company listed on any public exchange or regularly traded in the over-the-counter market, *provided* that the Employee's involvement with any such company is solely that of a passive security holder and the Employee discloses such ownership in advance to the Company's Board of Directors, shall not constitute a violation of this paragraph. Employee acknowledges that the SGE Group does business throughout the world and, thus, it is necessary and appropriate to have this covenant not to compete apply world-wide in order to protect the SGE Group's legitimate interests in its Confidential Information and close customer relationships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Covenant Not to Solicit</u>. The Employee agrees that he will not, during the Employee's employment and for a period of one (1) year thereafter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) directly or indirectly, request or advise any of the customers, distributors or dealers of the SGE Group to terminate or curtail their business with the SGE Group, or to patronize another business which is materially competitive with the SGE Group; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) directly or indirectly, on behalf of himself or any other person or entity, request, advise or solicit any person who is then or was in the prior six months an employee of the SGE Group to leave such employment for any reason or to hire any such person as an employee or independent contractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Judicial Modification</u>. In the event that any court of law or equity shall consider or hold any aspect of this Section 7 to be unreasonable or otherwise unenforceable, the parties hereto agree that the aspect of this Section so found may be reduced or modified by appropriate order of the court and shall thereafter continue, as so modified, in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Injunctive Relief</u>. The parties hereto acknowledge that the remedies at law for breach of this Section 7 will be inadequate, and that the Company shall be entitled to injunctive relief for violation thereof; *provided,* however, that nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Inventions and Discoveries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>SGE Proprietary Rights</u>. Employee acknowledges and agrees that all Intellectual Property (defined below) created, made or conceived by Employee (solely or jointly) during Employee's employment by the Company (regardless of whether such Intellectual Property was created, conceived or produced during Employee's regular work hours or at any other time) that relates to the actual or anticipated businesses of the SGE Group or results from or is suggested by any work performed by employees or independent contractors for or on behalf of the SGE Group ("<u>SGE Intellectual Property</u>") shall be deemed "work for hire" and shall be and remain the sole and exclusive property of SGE for any and all purposes and uses whatsoever as soon as Employee conceives or develops such SGE Intellectual Property, and Employee hereby agrees that its assigns, executors, heirs, administrators or personal representatives shall have no right, title or interest of any kind or nature therein or thereto, or in or to any results and proceeds therefrom. If for any reason such SGE Intellectual Property is not deemed to be "work-for-hire," then Employee hereby irrevocably and unconditionally assigns all rights, title, and interest in such SGE Intellectual Property to SGE and agrees that SGE is under no further obligation, monetary or otherwise, to Employee for such assignment. Employee also hereby waives all claims to any moral rights or other special rights ("<u>Moral Rights</u>"), including, without limitation, all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights," "artist's rights," "droit moral" or the like, that Employee may have or may accrue in any SGE Intellectual Property. To the extent that any such Moral Rights cannot be assigned under applicable law, Employee hereby ratifies and consents to any action that may be taken with respect to such Moral Rights by or on behalf of the Company and waives and agrees not to enforce any and all such rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under applicable law. Employee shall promptly disclose in writing to SGE the existence of any and all SGE Intellectual Property. As used in this Agreement, "<u>Intellectual Property</u>" shall mean and include any ideas, inventions (whether or not patentable), designs, improvements, discoveries, innovations, patents, patent applications, trademarks, service marks, trade dress, trade names, trade secrets, works of authorship, copyrights, copyrightable works, films, audio and video tapes, other audio and visual works of any kind, scripts, sketches, models, formulas, tests, analyses, software, firmware, computer processes, computer and other applications, creations and properties, Confidential Information and any other patents, inventions or works of creative authorship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 Employee agrees to communicate promptly and to disclose to SGE in such form as the Employee may be required to do so, all information, details and data pertaining to SGE Intellectual Property and to execute and deliver to SGE such formal transfers and assignments and such other papers and documents as may be required of the Employee to permit SGE or any person or entity designated by SGE to file and prosecute the patent applications, and, as to copyrightable material, to obtain copyrights thereof. Employee represents and warrants to the Company that all Intellectual Property Employee delivers to the Company shall be original and shall not infringe upon or violate any patent, copyright or proprietary right of any person or third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 To the extent this Agreement is required to be construed in accordance with laws of any state which precludes as a requirement in an employee agreement the assignment of certain classes of inventions made by an employee, this Section 8 will be interpreted not to apply to any invention which a court rules and/or SGE agrees falls within such classes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Tax Withholding</u>. All payments made and benefits provided by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Survival of Obligations</u>. All obligations of the Company and the Employee that by their nature involve performance, in any particular, after the termination of the Employee's employment or the term of this Agreement, or that cannot be ascertained to have been fully performed until after the termination of Employee's employment or the term of this Agreement, will survive the expiration or termination of the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Officer Resignation</u>. Upon termination of his employment with the Company for any reason, the Employee shall resign, as of the date of such termination, from any corporate office or director position held with the Company or any member of the SGE Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Miscellaneous</u>. The following miscellaneous sections shall apply to this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Section 409A Compliance</u>. To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code and the guidance promulgated thereunder ("Section 409A"). This Agreement shall be administered in a manner consistent with this intent, and any provision that would cause the Agreement to fail to satisfy Section 409A shall have no force and effect until amended by the parties to comply with Section 409A (which amendment may be retroactive to the extent permitted by Section 409A). Unless otherwise expressly provided, any payment of compensation by Company to Employee, whether pursuant to this Agreement or otherwise, shall be made no later than the 15<sup>th</sup> day of the third month (*i.e*., 2½ months) after the later of the end of the calendar year or the Company's fiscal year in which Employee's right to such payment vests (*i.e*., is not subject to a "substantial risk of forfeiture" for purposes of Code Section 409A). For purposes of this Agreement, "Separation from Service" shall have the meaning given to such term under Section 409A. Each payment and each installment of any severance payments provided for under this Agreement shall be treated as a separate payment for purposes of application of Section 409A. To the extent that any severance payments come within the definition of "short term deferrals" or "involuntary severance" under Section 409A, such amounts shall be excluded from "deferred compensation" as allowed under Section 409A, and shall *not* be subject to the following Section 409A compliance requirements. All payments of "nonqualified deferred compensation" (within the meaning of Section 409A) are intended to comply with the requirements of Section 409A, and shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate, offset or assign any such deferred payment, except in compliance with Section 409A. No amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A and Employee shall have no discretion with respect to the timing of payments except as permitted under Section 409A. Any payments to which Section 409A applies which are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as Separation from Service) occurs shall commence payment only in the calendar year in which the release revocation period ends as necessary to comply with Section 409A. In the event that Employee is determined to be a "key employee" (as defined and determined under Section 409A) of the Company at a time when its stock is deemed to be publicly traded on an established securities market, payments determined to be "nonqualified deferred compensation" payable upon separation from service shall be made no earlier than (i) the first day of the seventh (7<sup>th</sup>) complete calendar month following such termination of employment, or (ii) Employee's death, consistent with the provisions of Section 409A. Any payment delayed by reason of the prior sentence shall be paid out in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule. All expense reimbursement or in-kind benefits subject to Section 409A provided under this Agreement or, unless otherwise specified in writing, under any Company program or policy, shall be subject to the following rules: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided during one calendar year may not affect the benefits provided during any other year; (ii) reimbursements shall be paid no later than the end of the calendar year following the year in which the Employee incurs such expenses, and the Employee shall take all actions necessary to claim all such reimbursements on a timely basis to permit the Company to make all such reimbursement payments prior to the end of said period, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything herein to the contrary, no amendment may be made to this Agreement if it would cause the Agreement or any payment hereunder not to be in compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>280G</u>. If any payment or distribution by the Company to or for the benefit of Employee under this Agreement or any other plans or arrangements between the parties would be subject to the deduction limitations and excise tax imposed by Sections 280G and 4999 of the Internal Revenue Code (including any applicable interest and penalties, collectively "excise taxes"), then the parties agree to take such action as may be necessary to place Employee in the best after-tax position taking into account all income, employment and excise taxes, without regard to the deductibility of any payments by the Company. Thus, for example, any amount deemed to constitute a "parachute payment" under Section 280G, shall be reduced to the extent necessary to avoid excise taxes that would otherwise be imposed if, and only if, such reduction would result in Employee retaining a larger total after-tax amount of compensation, taking into account all Employee compensation, benefits, income, employment and excise taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Modifications and Waivers</u>. No provision of this Agreement may be modified, waived or discharged unless that modification, waiver or discharge is agreed to in writing by the Employee and the Company. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by that other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time, or at any prior or subsequent time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Construction of Agreement</u>. This Agreement supersedes any oral or written agreements between the Employee and the Company and any oral representations by the Company to the Employee with respect to the subject matter of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Governing Law</u>. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Severability</u>. If any one or more of the provisions of this Agreement, including but not limited to Section 7 above, or any word, phrase, clause, sentence or other portion of a provision is deemed illegal or unenforceable for any reason, that provision or portion will be modified or deleted in such a manner as to make this Agreement as modified legal and enforceable to the fullest extent permitted under applicable laws. The validity and enforceability of the remaining provisions or portions will remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which will take effect as an original and all of which will evidence one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Successors and Assigns</u>. This Agreement shall be binding upon, and shall inure to the benefit of the parties hereto and their respective heirs, beneficiaries, personal representatives, successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>Notices</u>. Any notice, request or other communication required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered in person, on the next business day after being delivered to a nationally-recognized overnight courier service (for such next-day delivery) or five (5) days after being deposited in the United States mail, certified or registered, postage prepaid, return receipt requested and addressed to the other party at the respective addressees set forth below or to the other addresses of either party may have furnished to the other in writing in accordance with this Section 12.7, except that notice of change of address will be effective only upon receipt.

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| | |
|:---|:---|
| If to Company: | 5960 Fairview Road, Suite 275 |
|  | Charlotte, NC 28210 |
| If to Employee: | At the address for the Employee most recently on file with the Company. |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Entire Agreement</u>. This Agreement contains the entire agreement of the parties. All prior arrangements or understandings, whether written or oral, are merged herein. This Agreement may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

[*The remainder of this page is intentionally blank; signature page follows*.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

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| | | | |
|:---|:---|:---|:---|
| STRONG TECHNICAL SERVICES, INC. | STRONG TECHNICAL SERVICES, INC. | EMPLOYEE | EMPLOYEE |
| By: |  | By: |  |
| Name: | [●]<br>| Name: | Ray F. Boegner<br>|
| Title: | [●]<br>| Date: | [●] |
| Date: | [●] |  |  |

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[*Signature page to Employment Agreement*.]

**EXHIBIT A**

**General Release of Claims**<sup>1</sup>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Ray F. Boegner ("***Employee***"), for Employee and Employee's family, heirs, executors, administrators, legal representatives and their respective successors and assigns, in exchange for the consideration received pursuant to Section 3.2 of the Employment Agreement (the "***Severance Benefits***") to which this release is attached as Exhibit A (the "***Employment Agreement***"), does hereby release and forever discharge Strong Technical Services, Inc. (the "***Company***"), Strong Global Entertainment, Inc., their respective former and current parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns, and each of their former and current agents, employees, officers, directors, shareholders, members, partners, trustees, heirs, joint venturers, attorneys, representatives, owners and servants (collectively, the "***Released Partie****s*") from any and all actions, causes of action, suits, controversies, claims and demands whatsoever (collectively, "**Claims**"), whether known or unknown, that Employee ever had, now has or may have based upon any matter, fact, cause or thing, occurring from the beginning of time up to and including the date Employee executes this General Release of Claims, including, without limitation, all Claims regarding Employee's employment with the Company, any events that may have occurred during the course of Employee's employment or the termination of Employee's employment, or any other matters or Claims of any kind or nature. This includes, without limitation, a release of any and all Claims for unpaid wages, holiday pay, overtime, bonuses or other compensation, breach of contract, wrongful discharge, disability benefits, life, health and medical insurance, sick leave, or any other fringe benefit, employment discrimination, unlawful harassment, retaliation, emotional distress, violations of public policy, defamation, fraudulent misrepresentation or inducements and severance pay and any other federal, state or local laws, statutes, rules, ordinances or regulations, whether equal employment laws, statutes, rules or regulations or otherwise. Without limiting the generality of the release provided above, Employee expressly waives any and all claims under Age Discrimination in Employment Act ("***ADEA***") that Employee may have as of the date hereof. Employee further understands that, by signing this General Release of Claims, Employee is in fact waiving, releasing and forever giving up any claim under the ADEA as well as all other laws within the scope of this Section 1 that may have existed on or prior to the date hereof. Notwithstanding anything in this Section 1 to the contrary, this General Release of Claims shall not apply to (i) any right Employee has to the Severance Benefits; (ii) any rights to receive any payments or benefits to which the Employee is entitled under COBRA, (iii) any rights or claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iv) any indemnification and advancement rights Employee may have as a former employee, officer or director of the Company or its subsidiaries, and (v) any claims for benefits under any directors' and officers' liability policy maintained by the Company or its affiliates in accordance with the terms of such policy.

<sup>1</sup> **NTD**: The parties agree that the Company may revise the release in light of additional statutes or claims so that the Company receives the benefit of the fullest legally permissible release of claims and may also change the timing, if required, to obtain such release. *This footnote is part of the form of release and is to be removed only when the Company finalizes the release for execution*. If the release is due after the executive's death, the Company may revise and provide for a comparable release by Executive's estate or beneficiaries.

Employee understands and agrees that the claims released in this Section 1 include not only claims presently known to Employee, but also all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities and causes of action of every kind and character that would otherwise come within the scope of the released claims as described in this Section 1. Employee understands that Employee may hereafter discover facts different from what Employee now believes to be true that, if known, could have materially affected this General Release of Claims, but Employee nevertheless waives and releases any claims or rights based on different or additional facts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Employee represents that Employee has not filed against the Released Parties any complaints, charges, or lawsuits arising out of Employee's employment, or any other matter arising on or prior to the date of this General Release of Claims, and covenants and agrees that Employee will never individually or with any person file, or commence the filing of any lawsuits, complaints or proceedings with any governmental agency, or against the Released Parties with respect to any of the matters released by Employee pursuant to Section 1 hereof; except that nothing in this General Release of Claims, including the provisions of this Section and Section 1 above, shall prevent Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB), the Securities and Exchange Commission, or any other federal, state or local agency charged with the enforcement of any laws. However, to the extent any such charge or complaint or any other Claim is made against any of the Released Parties (including by the EEOC or NLRB), Employee expressly waives any claim to any form of monetary or other damages, or any other form of individual recovery or relief in connection with any such charge, complaint or claim other than as prohibited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Employee acknowledges that, in the absence of Employee's execution of this General Release of Claims, the Severance Benefits would not otherwise be due to him.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Employee acknowledges and reaffirms Employee's continuing obligations under Sections 7 and 8 of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Employee hereby acknowledges that the Company has informed Employee that Employee has up to 21 days to sign this General Release of Claims and Employee may knowingly and voluntarily waive that 21 day period by signing this General Release of Claims earlier. Employee also understands that Employee shall have seven days following the date on which Employee signs this General Release of Claims within which to revoke it by providing a written notice of Employee's revocation to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Employee acknowledges and agrees that all information (in paper or electronic form), materials and equipment of any kind that Employee created or acquired during the course of Employee's employment with the Company (collectively, "***Company Property***") are and remain the property of the Company. Such Company Property includes, without limitation, books, handbooks, manuals, files, papers, memoranda, letters, facsimiles, photographs/images, audio recordings/files, electronically stored information, software, computers, and smartphones. Employee agrees that Employee has an obligation to return all Company Property to the Company and covenants and represents that, as of Employee's execution of this Agreement, (i) Employee has returned to the Company all Company Property (including that in electronic form); (ii) Employee has not made or taken copies of such Company Property; and (iii) Employee has completely removed all electronically stored Company Property from all storage media in Employee's possession, custody or control, including, without limitation, from Employee's home computer system(s) and any external disk or flash drives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Employee acknowledges and agrees that this General Release of Claims shall in all respects be subject to, governed by and construed in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws thereof. Any dispute concerning this General Release of Claims shall be resolved pursuant to the dispute resolution provisions of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Employee acknowledges that Employee has read this General Release of Claims, that Employee has been advised that Employee should consult with an attorney before Employee executes this general release of claims, and that Employee understands all of its terms and executes it voluntarily and with full knowledge of its significance and the consequences thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. This General Release of Claims shall become irrevocable on the eighth day following Employee's execution of this General Release of Claims, unless previously revoked in accordance with Section 5 above.

Intending to be legally bound hereby, Employee has executed this General Release of Claims on ______________.

  <br> Ray F. Boegner

## Exhibit 23.3

**Exhibit 23.3**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the inclusion in Amendment No. 8 to the Registration Statement on Form S-1 (Registration No. 333-264165) of Strong Global Entertainment, Inc. of our audit report dated April 6, 2022, except for Note 15, as to which the date is May 2, 2022, relating to the combined financial statements of Strong Global Entertainment as of and for each of the years ended December 31, 2021 and 2020, appearing in the Prospectus, which is a part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such Prospectus.

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| |
|:---|
| */s/ Haskell & White LLP* |
| HASKELL & WHITE LLP |

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Irvine, California

January 17, 2023