TORONTO, June 18, 2021 (GLOBE NEWSWIRE) -- Media Central Corporation Inc. (CSE: FLYY, FSE: 3AT) ("Media Central" or the "Company"), a publicly held holding company of media assets that trades on the Canadian Securities Exchange, today announced as an update further to its news release of February 4, 2021, that as part of the Company’s 2021 strategic growth plan has entered into an agreement with Creator News Inc. (“Creator News”).
Creator News has developed a software platform (the “Platform”) to act as a global aggregator of the best arts, culture and entertainment content. The new digital platform will focus on media consumers interested in subjects like Arts, Culture, Film, Music, Books, Technology, Real Estate and Food & Drink. The Company and Creator News entered into an agreement (the “Agreement”) dated June 18, 2021 whereby the Company’s holdings including The Georgia Straight, NOW Magazine, CannCentral.com and eCentralSports.com will license its content to the Platform.
The Company had previously proposed to develop Creator News as a wholly-owned subsidiary, along with Creator Stack, Inc. (together with Creator News, the “Creator Companies”) which would also provide a digital products that complement the Company’s existing product and service offerings. However, given the Company’s limited resources, it was subsequently determined that it would be more advantageous for shareholders of the Company if the Creator Companies were developed and fully funded by third parties, and for Media Central to then license use of the respective platforms and content. The Company entered into discussions with certain of its shareholders in this regard, pursuant to which it was agreed that such shareholders would fund the cost of development of the Creator Companies and their respective digital platforms, following which (i) the Company would enter into license agreements for the use of such platforms; and (ii) the Company would be granted a 25% equity interest in each of the Creator Companies for no additional consideration (the “External Development Proposal”).
The Company formed an independent special committee to consider and make recommendations with respect to the External Development Proposal, and the committee, after consideration, recommended approval by the board of directors.
The Agreement comprises a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The License Agreement was exempt from the valuation requirement of MI 61-101 by virtue of the exemptions contained in section 5.5(b) of MI 61-101 as the Company’s Common Shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in section 5.7(1)(a) of MI 61-101 in that the fair market value of the Agreement did not exceed 25% of the market capitalization of Media Central.
As the material change report disclosing the Agreement is being filed less than 21 days before the transaction, there is a requirement under MI 61‐101 to explain why the shorter period was reasonable or necessary in the circumstances. In the view of Media Central, it was necessary to immediately sign the Agreement and therefore, such shorter period was reasonable and necessary in the circumstances for sound business reasons as the Company did not know when the Agreement would be completed.