Glory Star New Media announces termination of merger agreement

Glory Star New Media announced the termination of that certain agreement and plan of merger, dated July 11 by and among the company, Cheers Inc. and GSMG. On April 6, the company sent a notice of termination to the parent, notifying the parent that the company proposes to terminate the merger agreement pursuant to Section 9.1 of the merger agreement due to the parent and the merger sub’s breaches of the merger agreement, including, but not limited to, Section 7.2. The breaches have resulted in the failure of the conditions set forth in Section 8.3 and cannot be cured before the termination date of the merger agreement. Pursuant to the notice of termination, as a result of such termination, the parent is obligated to pay $1,055,897.22 to the Company. On April 7, the parent sent a response letter to the company that while it disagrees with the allegations made in the notice of termination, the parent acknowledges that the company has the right to terminate the merger agreement pursuant to Section 9.1 of the merger agreement and thus agrees to pay the parent termination fee pursuant to Section 9.2 of the merger agreement on that basis. As a result of the termination of the merger agreement, the proposed merger will not be completed.