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    WILD   CA96810C1014

WILDBRAIN LTD.

(WILD)
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WildBrain : F2021 AIF

09/14/2021 | 06:42pm EDT

WILDBRAIN LTD.

2021 ANNUAL INFORMATION FORM

September 14, 2021

WILDBRAIN LTD.

2021 ANNUAL INFORMATION FORM

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

3

CORPORATE STRUCTURE

4

GENERAL DEVELOPMENT OF THE BUSINESS

5

BUSINESS OF THE COMPANY

9

SOCIAL POLICIES

18

RISK FACTORS

19

DIVIDENDS AND DISTRIBUTIONS

34

DESCRIPTION OF CAPITAL STRUCTURE

33

RATINGS

43

MARKET FOR SECURITIES

44

SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER

45

DIRECTORS AND OFFICERS

45

LEGAL PROCEEDINGS

51

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

51

INTEREST OF EXPERTS

52

AUDITOR, TRANSFER AGENT, AND REGISTRAR

52

MATERIAL CONTRACTS

52

ADDITIONAL INFORMATION

53

SCHEDULE A - AUDIT COMMITTEE CHARTER

54

All amounts following are expressed in Canadian dollars unless otherwise indicated.

2

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Information Form and documents referenced herein constitute "forward- looking information" and "forward-looking statements" within the meaning of applicable Canadian securities legislation (collectively herein referred to as "forward-lookingstatements"), including the provincial securities legislation in Canada. These statements relate to future events or future performance and reflect the Company's expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities of the Company and its subsidiaries. Forward-looking statements are often, but not always, identified by the use of words such as "may", "would", "could", "will", "should", "expect", "expects", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "pursue", "continue", "seek", "intend", or the negative of these terms or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the Company or any of its subsidiaries' objectives, plans, and goals, including those related to future operating results, financial performance, and the markets and industries in which the Company operates are or involve forward-looking statements. Specific forward-looking statements in this document include but are not limited to:

  • the business strategies and strategic priorities of WildBrain and its subsidiaries;
  • management's financial targets and priorities, and the future financial and operating performance and goals of the Company and its subsidiaries;
  • the timing for implementation of certain business strategies and other operational activities of WildBrain;
  • the markets and industries, including competitive conditions, in which WildBrain operates, including the market for content;
  • regulatory changes and potential impacts on WildBrain and the markets and industries in which it operates;
  • the value, prospects, and opportunities of the Company and its assets;
  • WildBrain's production pipeline;
  • the ability of the Company to license its content into numerous markets repeatedly;
  • the positioning and ability of the Company to monetize its library, content, and other business lines;
  • the growth and strategies to drive growth of the WildBrain Spark business;
  • changes in YouTube's approach to advertising and expected results therefrom, including the impact on the financial and operating performance of WildBrain Spark through, among other things, improved monetization;
  • the growth and proliferation of digital/non-linear distribution of media content;
  • the future market and demand for content;
  • the activation of the Company's IP and results and benefits therefrom;
  • the outlook for English kids' television in Canada;
  • use of proceeds from an exchangeable debenture financing;
  • the impact of epidemics, pandemics, or other public health crises, including the current outbreak of COVID-19, which could have a significant and ongoing negative impact on the Company, its employees, its business, and results of operations, including but not limited to consumer products, studio productions, and advertising; and
  • further actions the Company may have to take in response to COVID-19, and the impact of such actions taken.

Forward-looking statements are based on factors and assumptions that management believes are reasonable at the time they are made, but a number of assumptions may prove to be incorrect, including, but not limited to, assumptions about: (i) the Company's future operating results, (ii) the expected pace of expansion of the Company's operations, (iii) future general economic and market conditions, including debt and equity capital markets and the availability of financing on acceptable terms, (iv) the impact of increasing competition on the Company, (v) changes in the industries and changes in laws and regulations related to the industries in which the Company operates, (vi) consumer and customer preferences, (vii) the ability of the Company to execute on acquisition and other growth strategies and opportunities and realize the expected benefits therefrom, (viii) the ability of the Company to execute on production, distribution, and licensing arrangements, (ix) the availability of investment opportunities at acceptable valuations and the ability of the Company to execute on such investment opportunities, (x) the timing for commencement and completion of productions, (xi) the ability of the Company and its partners to execute on its brand plans and consumer products programs, (xii) changes in the markets and industries in which the Company operates and the ability of the Company to adapt to such changes, (xiii) changes to YouTube and in advertising markets, and (xiv) the ability of the Company to commercialize consumer products related to its brands. Although the forward-

3

looking statements contained in this Annual Information Form and any documents incorporated by reference herein are based on what the Company considers to be reasonable assumptions based on information currently available to the Company, there can be no assurances that actual events, performance, or results will be consistent with these forward-looking statements and these assumptions may prove to be incorrect.

A number of known and unknown risks, uncertainties, and other factors could cause actual events, performance, or results to differ materially from what is projected in the forward-looking statements, including, but not limited to, epidemics, pandemics or other public health crises, including the current outbreak of COVID-19, the magnitude and length of economic disruption as a result of the worldwide COVID-19 outbreak and its impact on advertising markets and the consumer products and retail sectors, among other things, competition and competitor activities, product development and acceptance, the ability of the Company to acquire, develop, and exploit entertainment properties, the Company's ability to source IP and creative talent who can develop IP, consumer and customer preferences, the ability of the Company to execute on its strategy, the Company's leverage and indebtedness and failure to meet covenant requirements under the senior credit facility of the Company (as and where applicable), the ability of the Company to execute on production and licensing arrangements, the ability of the Company to attract and retain talent, reliance on key personnel, risks relating to the Company's exposure to advertising revenues through YouTube and the ability of the Company to attract and realize on advertising revenues, including through YouTube and on other platforms, adverse publicity, risks related to doing business internationally and currency exchange rates, the reliance of the Company on the Internet and other technologies to continue to conduct its business, technology changes, intellectual property infringement and other claims, the ability of the Company to exploit its content library, access to capital, maintaining effective internal controls, equity capital markets risk and market share price fluctuations, loss of Canadian status, access to government incentives, loss of television licenses, the availability of acquisition and investment opportunities at acceptable valuations and the ability to execute on such opportunities, production risks, financial risks and dilution from the Company's capital requirements, labour relations, changes in the regulatory environment, general economic and market segment conditions, and catastrophic events and circumstances. In evaluating these forward-looking statements, investors, and prospective investors should specifically consider these and various other risks, uncertainties and other factors which may cause actual events, performance, or results to differ materially from any forward-looking statement.

This is not an exhaustive list of the factors that may affect any of the Company's forward-looking statements. Please refer to a discussion of the above and other risks related to the business of the Company and the industry in which it operates that will continue to apply to the Company, which are discussed in the Company's Management Discussion and Analysis ("MD&A") for the year ended June 30, 2021 which is on file at www.sedar.com and under the heading "Risk Factors" contained in this Annual Information Form.

These forward-looking statements are made as of the date of this Annual Information Form or, in the case of documents referenced herein, as of the date of such documents, and the Company does not intend, and does not assume any obligation, to update or revise them to reflect new events or circumstances, except in accordance with applicable securities laws. Investors and prospective investors are cautioned not to place undue reliance on forward-looking statements.

CORPORATE STRUCTURE

WildBrain Ltd. (the "Company" or "WildBrain") was incorporated in Nova Scotia, Canada, under the Companies Act (Nova Scotia) on February 12, 2004 under the name Slate Entertainment Limited. The Company's name was changed following incorporation to The Halifax Film Company Limited on April 20, 2004 and to DHX Media Ltd. on March 17, 2006. On April 25, 2006, the Company was continued federally as a corporation under the Canada Business Corporations Act (the "CBCA"). On December 18, 2019, the Company's name was changed to WildBrain Ltd.

On October 6, 2014, WildBrain's articles of continuance were amended to reorganize its share capital structure (the "Share Capital Reorganization"). The Share Capital Reorganization resulted in three new classes of shares, common voting shares (the "Common Voting Shares"), variable voting shares (the "Variable Voting Shares", and together with the Common Voting Shares, the "Shares"), and non-voting shares (the "Non-VotingShares"). For additional information on WildBrain's share capital refer to "Description of Capital Structure" below.

WildBrain's head and registered office is located at 5657 Spring Garden Road, Suite 505, Halifax, Nova Scotia, Canada B3J 3R4.

4

The following chart depicts the corporate organizational structure of the Company and its principal subsidiaries, including the jurisdiction of formation of each subsidiary, and the percentage of voting securities beneficially owned or over which control or direction is exercised by the Company:1

WildBrain Ltd.

DHX Media

DHX Media

DHX Media

DHX Television

Nerd Corps

WildBrain

DHX Global

(Halifax)

(Toronto)

(Vancouver)

Ltd.

Entertainment Inc.

Holdings LLC

Holdings Ltd.

Ltd.

Ltd.

Ltd.

(Canada)

(British Columbia)

(Delaware)

(Nova Scotia)

(Nova Scotia)

(Ontario)

(British Columbia)

Wild Brain

DHX SSP Holdings

DHX Media (UK)

Entertainment Inc.

LLC

Limited

(Delaware)

(Delaware)

(United Kingdom)

50%

51%

DHX PH Holdings

Shortcake IP

Wild Brain

DHX Worldwide

GabbaCaDabra LLC

International

LLC

Holdings LLC

Limited

(Delaware)

Limited

(Delaware)

(Delaware)

(United Kingdom)

(United Kingdom)

80%

Wild Brain Family

The Copyright

Peanuts Holdings

Promotions

International

LLC

Licensing Group

Limited

(Delaware)

Limited

(United Kingdom)

(United Kingdom)

Peanuts

Worldwide LLC

(Delaware)

GENERAL DEVELOPMENT OF THE BUSINESS

During fiscal 2020, the Company rebranded as "WildBrain". Each of the Company's business segments were also rebranded to include the prefix "WildBrain". The Company's ad-supportedvideo-on-demand ("AVOD") business, formerly known as WildBrain, was rebranded as WildBrain Spark.

In an expanding and evolving market for content, WildBrain is focused on the multiple ways to monetize its content and build brands by producing and distributing shows and creating consumer awareness across all media platforms and generating royalties from the sale of consumer products based on its shows and brands. The Company's strategy has been guided by the key business priorities of growing brands and building awareness on WildBrain Spark and creating premium kids' content to drive franchise brands. The key business priorities for the current financial year will be to monetize the large audience on WildBrain Spark and create premium kids' content with a focus on growing key brands. Refer to WildBrain's fiscal 2021 MD&A which is available on SEDAR at www.sedar.com for additional details concerning the strategic priorities of WildBrain.

A description of how the Company's business has developed over the last three financial years is set out below.

1 Certain entities depicted are indirectly held through other 100% owned subsidiaries which are not depicted. Unless indicated otherwise, ownership of each entity is equal to 100%. The Company indirectly owns 51% of DHX PH Holdings LLC which owns 80% of Peanuts Holdings (as defined below). Peanuts Holdings owns 100% of Peanuts Worldwide LLC. Accordingly, on an aggregate basis, WildBrain owns an indirect interest in Peanuts Holdings and Peanuts Worldwide LLC of approximately 41%.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

WildBrain Ltd. published this content on 14 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 September 2021 22:41:08 UTC.


ę Publicnow 2021
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Sales 2022 484 M 390 M 390 M
Net income 2022 30,0 M 24,2 M 24,2 M
Net Debt 2022 416 M 335 M 335 M
P/E ratio 2022 355x
Yield 2022 -
Capitalization 612 M 495 M 493 M
EV / Sales 2022 2,12x
EV / Sales 2023 1,84x
Nbr of Employees 531
Free-Float 47,7%
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Mean consensus HOLD
Number of Analysts 6
Last Close Price 3,55 CAD
Average target price 3,78 CAD
Spread / Average Target 6,34%
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Managers and Directors
Eric Ellenbogen Vice Chairman & Chief Executive Officer
Josh Scherba President
Aaron Sholom Ames Chief Financial Officer
Donald Arthur Wright Non-Executive Chairman
Deirdre Brennan Chief Operating Officer
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