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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON D.C. 20549</B></P>

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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Date of Report (Date of earliest event
reported): October 3, 2012</B></P>

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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RLJ ENTERTAINMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nevada<BR>
</B>(State or other jurisdiction of incorporation)</P>

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<TR>
    <TD STYLE="vertical-align: top; text-align: center"><B>001-35675<BR>
</B>(Commission File Number) </TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><B>45-4950432<BR>
</B>(IRS Employer Identification Number)</TD></TR>
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<P STYLE="color: #365F91; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: windowtext">RLJ
Entertainment, Inc.<BR>
3 Bethesda Metro Center, Suite 1000<BR>
Bethesda, Maryland 20814<BR>
<FONT STYLE="font-weight: normal">(Address of principal executive offices)</FONT></FONT></P>

<P STYLE="color: #365F91; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: windowtext"><FONT STYLE="font-weight: normal">&nbsp;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant&rsquo;s telephone number, including
area code: <B>(301) 280-7737</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>N/A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former Name or Former Address, if Changed
Since Last Report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

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    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD></TR>
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<TR>
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    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
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    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR>
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    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR>
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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%"><TR STYLE="vertical-align: top"><TD NOWRAP><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item&nbsp;1.01.
                                                                                                                                                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Entry
                                                                                                                                                into
                                                                                                                                                a
                                                                                                                                                Material
                                                                                                                                                Definitive
                                                                                                                                                Agreement.</B></P></TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 3, 2012, in connection with the
consummation of the business combination described in Item 2.01 below, RLJ Entertainment, Inc. (the &ldquo;<U>Company</U>&rdquo;),
RLJ Acquisition, Inc. (&ldquo;<U>RLJ</U>&rdquo;), Acorn Media Group, Inc. (&ldquo;<U>Acorn</U>&rdquo;), Image Entertainment, Inc.
(&ldquo;<U>Image</U>&rdquo;), Image/Madacy Home Entertainment, LLC, a majority owned subsidiary of Image (&ldquo;<U>IMHE</U>&rdquo;),
RLJ Merger Sub I, Inc., a wholly-owned subsidiary of the Company (&ldquo;<U>RLJ Sub</U>&rdquo;), and RLJ Merger Sub II, Inc., a
wholly-owned subsidiary of the Company (&ldquo;<U>Image Sub</U>&rdquo;), as borrowers (the Company, RLJ, Image, IMHE, RLJ Sub,
Image Sub, and Acorn, collectively, the &ldquo;<U>Borrowers</U>&rdquo;), entered into a Credit Agreement (the &ldquo;<U>Credit
Facility</U>&rdquo;) with certain lenders, SunTrust Bank (&ldquo;<U>SunTrust</U>&rdquo;), as Administrative Agent, and SunTrust
Robinson Humphrey, Inc., as Lead Arranger and Bookrunner. The Credit Facility includes a five-year $15 million revolving credit
facility and three tranches of term loans totaling $55 million with final maturities ranging from five to five and one-half years,
at interest rates ranging from prime rate plus 5% to 6.25% or LIBOR plus 6% to 7.25%, plus an additional 3% per annum paid in kind
on the last $15 million of the facilities. The obligations under the Credit Facility are secured by a lien on substantially all
of the assets of the Borrowers, pursuant to the Pledge and Security Agreement, dated as of October 3, 2012, by and among the Borrowers,
SunTrust, and the certain lenders (the &ldquo;<U>Security Agreement</U>&rdquo;).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The proceeds of the Credit Facility were
used (i) to pay off the existing credit facility of Image, which provided for a revolving line of credit of $17.5 million and had
an expiration date of June 23, 2014, (ii) to pay off the existing credit facility of Acorn, which provided for an $18.0 million
term loan and a $10.0 million revolving line of credit and had an expiration date of February 28, 2015, and (iii) to fund a portion
of the purchase price payable to the Acorn stockholders in connection with the business combination. Amounts available under the
Credit Facility will also be used for general working capital purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the transactions contemplated
by the Credit Facility, the Company issued to Drawbridge Special Opportunities Fund, LP (&ldquo;<U>Drawbridge</U>&rdquo;), an affiliate
of one of the lenders under the Credit Facility, warrants to purchase 1,000,000 shares of the Company&rsquo;s common stock in a
private placement (the &ldquo;<U>Drawbridge Warrants</U>&rdquo;). Prior to the issuance of the Drawbridge Warrants, RLJ SPAC Acquisition,
LLC (the &ldquo;<U>Sponsor</U>&rdquo;) contributed a warrant to purchase 1,000,000 shares of RLJ&rsquo;s common stock for no consideration
to RLJ for cancellation. The Drawbridge Warrants were issued pursuant to an exemption from the registration requirements under
Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder. The shares to be issued upon exercise
of the Drawbridge Warrants have not been registered under the Securities Act, and may not be offered or sold in the United States
in the absence of an effective registration statement or exemption from the registration requirements thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 3, 2012, in connection with the
consummation of the business combination described in Item 2.01 below, the Company, RLJ, JH Partners Evergreen Fund, LP (&ldquo;<U>JH
I</U>&rdquo;), JH Investment Partners III, LP (&ldquo;<U>JH II</U>&rdquo;), JH Investment Partners GP Fund III, LLC (&ldquo;<U>JH
III</U>&rdquo; and, together with JH I and JH II, the &ldquo;<U>JH Parties</U>&rdquo;), Drawbridge, Miguel Penella, certain shareholders
of Acorn, Peter Edwards as the Acorn Representative, the Sponsor, William S. Cohen, and Morris Goldfarb entered into an amended
and restated registration rights agreement (the &ldquo;<U>Registration Rights Agreement</U>&rdquo;), pursuant to which the Company
has agreed to register certain of its securities held by the stockholders who are a party to the Registration Rights Agreement
under the Securities Act of 1933, as amended (the &ldquo;<U>Securities Act</U>&rdquo;). Such stockholders are entitled under such
agreement to make up to three demands, excluding short form registration demands, that the Company register certain of its securities
held by them for sale under the Securities Act. In addition, such stockholders have the right to include their securities in other
registration statements filed by the Company. However, the Registration Rights Agreement provides that no stockholder (other than
the Sponsor) may make a demand (i) with respect to a registration statement on Form S-1 until October 3, 2013 or (ii) with respect
to a registration statement on Form S-3 until July 3, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 3, 2012, immediately following
the consummation of the business combination described in Item 2.01 below, the Company entered into an Indemnity Agreement with
each of its officers and directors (collectively, the &ldquo;<U>Indemnity Agreements</U>&rdquo;). Pursuant to the Indemnity Agreements,
and subject to the exceptions and limitations provided therein, the Company will indemnify the directors and officers in connection
with the defense of any present or future threatened, pending or completed claim, action, suit or proceeding as allowed under Nevada
law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 3, 2012, in connection
with the consummation of the business combination described in Item 2.01 below, the Company, RLJ and Continental Stock
Transfer &amp; Trust Company (the &ldquo;<U>Warrant Agent</U>&rdquo;) entered into an Assignment, Assumption and Amendment
Agreement, pursuant to which RLJ assigned to the Company all of RLJ&rsquo;s rights, title and interest in, and the Company
assumed all of RLJ&rsquo;s liabilities and obligations under, the existing Warrant Agreement, dated as of February 22, 2011,
by and between RLJ and the Warrant Agent which governs the terms of (i) the Fortress Warrants, (ii) the warrants to purchase
shares of the Company&rsquo;s common stock issued to Wexford described in Item 8.01 below and (iii) the warrants issued by
the Company in connection with business combination described in Item 2.01 below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The foregoing description of the Credit
Facility, the Security Agreement, the Registration Rights Agreement, the form of Indemnity Agreements and the Assignment, Assumption
and Amendment Agreement do not purport to be complete and are qualified in their entirety by reference to such documents, which
are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 respectively, and incorporated herein by this reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 2.01.&nbsp;&nbsp;&nbsp;&#9;Completion of Acquisition or Disposition of
Assets.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Consummation of Business Combination with Image and Acorn</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 3, 2012, pursuant to the Agreement
and Plan of Merger, dated as of April 2, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;), by and among the Company, RLJ, Image,
RLJ Sub and Image Sub, following the consummation of the merger of RLJ Sub with and into RLJ (the &ldquo;<U>RLJ Merger</U>&rdquo;)
and the merger of Image Sub with and into Image (the &ldquo;<U>Image Merger</U>&rdquo; and, together with the RLJ Merger, the &ldquo;<U>Merger
Transaction</U>&rdquo;), each of RLJ and Image became wholly owned subsidiaries of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Upon completion of the Image Merger, each
outstanding share of Image common stock (excluding dissenting shares) were automatically converted into the right to receive 0.00972
shares of the Company&rsquo;s common stock, except that shares of Image common stock held by Image, Image Sub, the Company, or
any direct or indirect wholly owned subsidiary of the Company or Image were canceled without any conversion, payment, or distribution.
Also, upon completion of the RLJ Merger, each share of RLJ common stock was automatically converted into the right to receive consideration
of one share of the Company&rsquo;s common stock (except for 1,267,739 shares of the RLJ&rsquo;s common stock which were contributed
for no consideration by the Sponsor to RLJ for cancellation immediately prior to the RLJ Merger) and each warrant to purchase shares
of RLJ common stock was automatically converted into a warrant to purchase an equal number of shares of the Company&rsquo;s common
stock (except for warrants to purchase 2,850,000 shares of RLJ&rsquo;s common stock which were contributed for no consideration
by the Sponsor to RLJ for cancellation immediately prior to the RLJ Merger).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Immediately prior to the consummation
of the Merger Transaction, and pursuant to the Preferred Stock Purchase Agreement, dated as of April 2, 2012 and amended by
Amendment No. 1 to Preferred Stock Purchase Agreement, dated as of October 3, 2012 (the &ldquo;<U>Preferred Stock Purchase
Agreement</U>&rdquo;), by and among the Company, RLJ and the holders of Image&rsquo;s Series B Cumulative Preferred Stock
(the &ldquo;<U>Preferred Stock</U>&rdquo;), such holders sold all of the outstanding shares of Preferred Stock to RLJ. The
aggregate purchase price paid to the holders of the Preferred Stock was (i) an aggregate of $2,800,000 in cash, (ii)
unsecured subordinated promissory notes from the Company in the aggregate principal amount of $14,800,000, (iii) an aggregate
of 575,000 shares of the Company&rsquo;s common stock issued in a private placement (the &ldquo;<U>Image Private Placement
Shares</U>&rdquo;), and warrants to purchase an aggregate of 150,000 shares of the Company&rsquo;s common stock issued in a
private placement (the &ldquo;<U>Image Private Placement Warrants</U>&rdquo;). Prior to the issuance of the Image Private
Placement Shares and Image Private Placement Warrants, the Sponsor contributed 75,000 shares of RLJ&rsquo;s common stock and
warrants to purchase 150,000 shares of RLJ&rsquo;s common stock for no consideration to RLJ for cancellation. The unsecured
subordinated notes issued by the Company to the former holders of the Preferred Stock bear interest at 12% per annum, of
which 5.4% is payable in cash annually and the balance is either paid through the issuance of shares of the Company&rsquo;s
common stock valued at their then-current market price, or accrues and is added to principal, which is payable upon maturity.
The subordinated notes mature upon the earlier of six years from the date of issuance or six months after the latest stated
maturity of the senior debt issued pursuant to the Credit Facility. The foregoing description of the form of unsecured
subordinated note does not purport to be complete and is qualified in its entirety by reference to such document, which is
attached hereto as Exhibits 10.6, and incorporated herein by this reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Immediately following the consummation
of the Merger Transaction, and pursuant to the Stock Purchase Agreement, dated as of April 2, 2012 and amended by Amendment
No. 1 to Stock Purchase Agreement, dated as of October 3, 2012 (the &ldquo;<U>Stock Purchase Agreement</U>&rdquo; and,
together with the Merger Agreement and the Preferred Stock Purchase Agreement, the &ldquo;<U>Agreements</U>&rdquo;), by and
among the Company, RLJ, Acorn, the shareholders of Acorn, and Peter Edwards as the shareholder representative, the
shareholders of Acorn sold all the outstanding shares of Acorn&rsquo;s common shares to RLJ (the &ldquo;<U>Acorn
Transaction</U>&rdquo; and together with the Merger Transaction and the other ancillary transactions contemplated by the
Agreements, the &ldquo;<U>Transactions</U>&rdquo;). The aggregate purchase price paid to the shareholders of Acorn was (i) an
aggregate of approximately $99.7 million in cash (which amount includes $5,000,000 placed in an indemnity escrow account and
approximately $35.4 million additional Acorn transaction costs), (ii) 1,575,000 shares of the Company&rsquo;s common stock
(consisting of 1,000,000 registered shares (the &ldquo;<U>Registered Shares</U>&rdquo;) and 575,000 shares issued in
a private placement (the &ldquo;<U>Acorn Private Placement Shares</U>&rdquo; and, together with the Image Private
Placement Shares, the &ldquo;<U>Private Placement Shares</U>&rdquo;)), and (iii) warrants to purchase 1,150,000 shares of
the Company&rsquo;s common stock (consisting of registered warrants to purchase 1,000,000 shares (the &ldquo;<U>Registered
Warrants</U>&rdquo;) and warrants to purchase 150,000 shares issued in a private placement (the &ldquo;<U>Acorn Private
Placement Warrants</U>&rdquo; and, together with the Image Private Placement Warrants, the &ldquo;<U>Private Placement
Warrants</U>&rdquo;)). Prior to the issuance of the Acorn Private Placement Shares and Acorn Private Placement Warrants, the
Sponsor contributed 75,000 shares of RLJ&rsquo;s common stock and warrants to purchase 150,000 shares of RLJ&rsquo;s common
stock for no consideration to RLJ for cancellation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The issuance of Company&rsquo;s common stock
in connection with the Merger Transaction and the issuance of the Registered Shares and Registered Warrants, as described above,
was registered under the Securities Act, pursuant to a registration statement on Form S-4 (File No. 333-180714), filed with the
United States Securities and Exchange Commission (&ldquo;<U>SEC</U>&rdquo;) and declared effective on August 10, 2012 (the &ldquo;<U>Form
S-4</U>&rdquo;). The joint proxy statement/ prospectus included in the Form S-4 contains additional information about the Transaction
and the related transactions. The Private Placement Shares and Private Placement Warrants, were issued pursuant to an exemption
from the registration requirements under Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder.
The shares to be issued upon exercise of the Private Placement Warrants have not been registered under the Securities Act, and
may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration
requirements thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Business</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company has not been engaged in any
business prior to the transactions described in Items 1.01 and 2.01 above. Following the consummation of the business combination,
the Company&rsquo;s business will consist of the businesses of RLJ, Image, and Acorn. The businesses of RLJ, Image, and Acorn (collectively,
the &ldquo;<U>Businesses</U>&rdquo;) are described in the Form S-4 in the sections titled &ldquo;Information about RLJ&rdquo;,
&ldquo;Information about Image&rdquo;, and &ldquo;Information about Acorn&rdquo;, each of which section is incorporated herein
by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Risk Factors</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The risks associated with the Businesses
are described in the Form S-4, in the sections titled &ldquo;Risk Factors&rdquo;, which is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Financial Information</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The sections titled &ldquo;Selected Historical
Financial Data of RLJ&rdquo;, &ldquo;Selected Consolidated Historical Financial Data of Image&rdquo;, &ldquo;Selected Consolidated
Historical Financial Data of Acorn&rdquo;, &ldquo;Information About RLJ &ndash; Periodic Reporting and Financial Information&rdquo;,
&ldquo;Information About RLJ &ndash; Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;,
&ldquo;Information About Image &ndash; Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;,
&ldquo;Information About Acorn &ndash; Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;,
&ldquo;Information About RLJ &ndash; Quantitative and Qualitative Disclosures About Market Risk&rdquo;, &ldquo;Information About
Image &ndash; Quantitative and Qualitative Disclosures About Market Risk&rdquo;, and &ldquo;Information About Acorn &ndash; Quantitative
and Qualitative Disclosures About Market Risk&rdquo; in the Form S-4 are incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Security Ownership of Certain Beneficial Owners and Management</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table sets forth information
regarding the beneficial ownership of the Company&rsquo;s common stock as of October 3, 2012, by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">-</TD><TD>each person known by the Company to be the beneficial owner of more than 5% of its outstanding shares of common stock;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">-</TD><TD>each of the Company&rsquo;s officers and directors; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">-</TD><TD>all of the Company&rsquo;s officers and directors as a group.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As used in the table below, the term beneficial
ownership with respect to the Company&rsquo;s common stock consists of sole or shared voting power (which includes the power to
vote, or to direct the voting of shares of the Company&rsquo;s common stock) or sole or shared investment power (which includes
the power to dispose, or direct the disposition of, shares of the Company&rsquo;s common stock) through any contract, arrangement,
understanding, relationship or otherwise, including a right to acquire such power(s) during the 60 days following October 3, 2012.
Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with
respect to all shares of common stock beneficially owned by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company has based its calculation of
the percentage of beneficial ownership on 13,340,451 shares of its common stock outstanding on October 3, 2012 (which amount is
subject to change because no fractional shares will be issued to Image&rsquo;s common stockholders in connection with the Image
Merger).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">Name and Address of Beneficial Owner</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares<BR> of Common Stock<BR> Beneficially Owned</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Approximate<BR> Percentage of<BR> Outstanding<BR> Common Stock<BR> Beneficially Owned</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left">RLJ SPAC Acquisition, LLC (RLJ&rsquo;s sponsor)<SUP>(1)<BR> </SUP>3 Bethesda Metro Center, Suite 1000<BR> Bethesda, MD 20814</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">7,031,678</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">41.0</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Robert L. Johnson<SUP>(1)<BR> </SUP>c/o The RLJ Companies<BR> 3 Bethesda Metro Center, Suite 1000<BR> Bethesda, MD 20814</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,031,678</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">41.0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">H. Van Sinclair<SUP>(2)<BR> </SUP>c/o The RLJ Companies<BR> 3 Bethesda Metro Center, Suite 1000<BR> Bethesda, MD 20814</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">38,333</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">*</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">JH Evergreen Management, LLC<SUP>(3)<BR> </SUP>451 Jackson Street<BR> San Francisco, CA 94111-1615</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,934,276</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14.5</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Theodore S. Green<SUP>(4)<BR> </SUP>c/o Image Entertainment, Inc.<BR> 20525 Nordhoff Street, Suite 200<BR> Chatsworth, CA 91311</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">193,815</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.5</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">John W. Hyde<SUP>(5)<BR> </SUP>c/o Image Entertainment, Inc.<BR> 20525 Nordhoff Street, Suite 200<BR> Chatsworth, CA 91311</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">165,783</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.2</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">John P. Avagliano<SUP>(6)<BR> </SUP>c/o Image Entertainment, Inc.<BR> 20525 Nordhoff Street, Suite 200<BR> Chatsworth, CA 91311</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">81,333</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">*</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Peter Edwards<SUP>(7)<BR> </SUP>c/o Acorn Media Group, Inc.<BR> 8515 Georgia Avenue, Suite 650<BR> Silver Spring, MD 20910</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,270,047</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<!-- Field: Page; Sequence: 5 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: left; width: 50%">&nbsp;</TD><TD STYLE="text-align: right; width: 50%"></TD></TR></TABLE></DIV>
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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">Name and Address of Beneficial Owner</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares<BR> of Common Stock<BR> Beneficially Owned</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Approximate<BR> Percentage of<BR> Outstanding<BR> Common Stock<BR> Beneficially Owned</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; width: 72%">Miguel Penella<SUP>(8)<BR> </SUP>c/o Acorn Media Group, Inc.<BR> 8515 Georgia Avenue, Suite 650<BR> Silver Spring, MD 20910</TD><TD STYLE="font-size: 10pt; width: 2%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; width: 10%">67,252</TD><TD STYLE="font-size: 10pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="font-size: 10pt; width: 2%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; width: 10%">*</TD><TD STYLE="font-size: 10pt; text-align: left; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Lisa Wardell<SUP>(9)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">c/o The RLJ Companies<BR> 3 Bethesda Metro Center, Suite 1000<BR> Bethesda, MD 20814</P></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,167</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">*</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Tyrone Brown <BR>c/o The RLJ Companies<BR> 3 Bethesda Metro Center, Suite 1000<BR> Bethesda, MD 20814</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Morris Goldfarb<SUP>(10)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">c/o The RLJ Companies<BR> 3 Bethesda Metro Center, Suite 1000<BR> Bethesda, MD 20814</P></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">257,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.9</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">All directors and executive officers as a group (10 people)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,124,908</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">51.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* Less than 1%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify">The RLJ Companies, LLC is the sole manager and is the
sole voting member of RLJ SPAC Acquisition, LLC. Robert L. Johnson is the sole manager and the sole voting member of The RLJ Companies,
LLC. Mr. Johnson disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.&nbsp;
Includes 3,215,011 shares of the Company&rsquo;s common stock and warrants to purchase 3,816,667 shares of the Company&rsquo;s
common stock.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">Includes 38,333 shares of the Company&rsquo;s common
stock, held in the name of RLJ SPAC Acquisition, LLC, which may be transferred to Mr. Sinclair at any time.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(3)</TD><TD STYLE="text-align: justify">Information presented regarding JH Evergreen Management,
LLC, the JH Parties, and John C. Hansen is based on information provided by JH Parties and certain of their affiliates regarding
ownership of Image common stock. The mailing address of JH Evergreen Management and the other affiliate parties identified in
this footnote is 451 Jackson Street, San Francisco, CA 94111-1615. Mr. Hansen disclaimed beneficial ownership of such shares except
to the extent of his pecuniary interest therein.&nbsp; Includes 1,647,489 shares of the Company&rsquo;s common stock held by JH
I, 196,505 shares of the Company&rsquo;s common stock held by JH II, and 90,282 shares of the Company&rsquo;s common stock held
by JH III.&nbsp; Does not include warrants to purchase 114,228 shares of the Company&rsquo;s common stock held by JH I, warrants
to purchase 13,625 shares of the Company&rsquo;s common stock held by JH II, or warrants to purchase 6,261 shares of the Company&rsquo;s
common stock held by JH III, none of which are exercisable within 60 days of October 3, 2012..</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: justify">Includes 149,405 shares of the Company&rsquo;s common
stock and 44,444 shares of the Company&rsquo;s common stock to be held in escrow until April 3, 2014, subject to forfeiture to
the JH Entities. See &ldquo;The Business Combination&nbsp;&mdash;&nbsp;Interests of Image Directors and Officers in the Business
Combination&nbsp;&mdash;&nbsp;Share Escrow Agreement&rdquo; on page 183 of the Form S-4, which is incorporated herein by reference.&nbsp;
Also includes 19 shares held as custodian for Mr. Green&rsquo;s children.&nbsp; Does not include warrants to purchase 6,818 shares
of the Company&rsquo;s common stock which are not exercisable within 60 days of October 3, 2012.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(5)</TD><TD STYLE="text-align: justify">Mr. Hyde holds all of the shares of the Company&rsquo;s
common stock and warrants to purchase shares of the Company&rsquo;s common stock through Producers Sales Organization, his wholly
owned consulting business (&ldquo;<U>PSO</U>&rdquo;), except for 40,098 shares of the Company&rsquo;s common stock which he holds
in his own name. Additionally, includes 87,907 shares of the Company&rsquo;s common stock held by PSO and 37,778 shares of the
Company&rsquo;s common stock to be held in escrow for the benefit of PSO until April 3, 2014, subject to forfeiture to the JH
Entities. See &ldquo;The Business Combination&nbsp;&mdash;&nbsp;Interests of Image Directors and Officers in the Business Combination&nbsp;&mdash;&nbsp;Share
Escrow Agreement&rdquo; on page 183 of the Form S-4, which is incorporated herein by reference. Does not include warrants to purchase
5,795 shares of the Company&rsquo;s common stock held by PSO which are not exercisable within 60 days of October 3, 2012.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: left; width: 50%">&nbsp;</TD><TD STYLE="text-align: right; width: 50%"></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(6)</TD><TD STYLE="text-align: justify">Includes 63,555 shares of the Company&rsquo;s common
stock and 17,778 shares of the Company&rsquo;s common stock to be held in escrow until April 3, 2014, subject to forfeiture to
the JH Entities. See &ldquo;The Business Combination&nbsp;&mdash;&nbsp;Interests of Image Directors and Officers in the Business
Combination&nbsp;&mdash;&nbsp;Share Escrow Agreement&rdquo; on page 183 of the Form S-4, which is incorporated herein by reference.&nbsp;
Does not include warrants to purchase 2,727 shares of the Company&rsquo;s common stock which are not exercisable within 60 days
of October 3, 2012.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(7)</TD><TD STYLE="text-align: justify">Includes 692,523 shares of the Company&rsquo;s common
stock and warrants to purchase 577,524 shares of the Company&rsquo;s common stock held by trusts established by Mr. Edwards for
estate planning purposes.&nbsp; Does not include warrants to purchase 30,001 shares of the Company&rsquo;s common stock held by
trusts established by Mr. Edwards for estate planning purposes which are not exercisable within 60 days of October 3, 2012.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(8)</TD><TD STYLE="text-align: justify">Includes 33,626 shares of the Company&rsquo;s common
stock and warrants to purchase 33,626 shares of the Company&rsquo;s common stock.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(9)</TD><TD STYLE="text-align: justify">Includes 19,167 shares of the Company&rsquo;s common
stock, held in the name of RLJ SPAC Acquisition, LLC, which may be transferred to Ms. Wardell at any time.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(10)</TD><TD STYLE="text-align: justify">Includes 157,000 shares of the Company&rsquo;s common
stock and warrants to purchase 100,000 shares of the Company&rsquo;s common stock.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Directors and Executive Officers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in the section of the Form
S-4 titled &ldquo;New RLJ Executive Officers and Directors&rdquo; is incorporated herein by reference. In addition, the following
individuals who were not named in the Form S-4 currently serve as directors of the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 19%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><B>Name</B></P></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 79%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><B>Position</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Lisa Wardell</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Independent Director</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Morris Goldfarb</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Independent Director</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Tyrone Brown</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Independent Director</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Lisa Wardell</B> has served as a member of the Company&rsquo;s
board of directors since October 2012. Ms. Wardell has served as executive vice president and chief operating officer of The RLJ
Companies since August 2004. Ms. Wardell also previously served as the chief financial officer and secretary of RLJ Acquisition
from December 2010 until October 2012. Prior to that, Ms. Wardell was a senior associate at Katalyst Venture Partners, a private
equity firm, from September 2000 to January 2003. She has served as a member of the board of directors of DeVry, Inc., a provider
of educational services (NYSE:DV) since November 2008 and a member of the Christopher &amp; Banks board (NYSE:CBK) since 2011 .
Ms. Wardell currently serves on the board of directors of Rollover Systems, Inc., and the RLJ McLarty Landers Automotive Group.
The Company believes that Ms. Wardell&rsquo;s professional background, her leadership position at The RLJ Companies and her current
and past board positions, make her well qualified as a member of the Company&rsquo;s board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Morris Goldfarb</B> has served as a member of the Company&rsquo;s
board of directors since April 2012. Mr. Goldfarb previously served as a director of RLJ from February 2011 until October 2012.
He serves as Chairman of the Board and Chief Executive Officer of G-III Apparel Group, Ltd. (Nasdaq: GIII), a designer, manufacturer,
importer and marketer of apparel, handbags and luggage. Mr. Goldfarb has served as an executive officer and director of G-III and
its predecessors since its formation in 1974. Mr. Goldfarb served as a director of Lakes Entertainment, Inc. from June 1998 until
March 2010. We believe that Mr. Goldfarb&rsquo;s professional background, his senior leadership position at G-III Apparel Group,
Ltd., and current and past board positions, make him well qualified as a member of our board of directors. The Company believes
that Mr. Goldfarb&rsquo;s professional background, his senior leadership position at G-III Apparel Group, Ltd., and current and
past board positions, make him well qualified as a member of the Company&rsquo;s board of directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Tyrone Brown</B> has served as a member of the Company&rsquo;s
board of directors since October 2012. Mr. Brown was the co-founder of District Cablevision, the DC cable television system, where
he was president and a director from 1986 to February 1992 and was general manager from 1998 to 1990. Mr. Brown was an initial
investor and director in the successful re-launch after bankruptcy of IRIDIUM, the global mobile satellite system, serving as IRIDIUM&rsquo;s
vice chairman from January 2002 until a successful public offering in October 2009. Mr. Brown also served as a director and principal
outside counsel of Black Entertainment Television (BET) until its successful public offering in 1991, and vice president and general
counsel of Post-Newsweek Stations, the broadcast station subsidiary of the Washington Post Company from 1971 to 1974. In addition
to his entrepreneurial and business activities, Mr. Brown has practiced communications law at a number of major DC law firms and
served as a law clerk for the late Chief Justice of the Supreme Court Earl Warren, as an aide to Senator Edmund Muskie and as an
FCC Commissioner under the Carter Administration. The Company believes that Mr. Brown&rsquo;s professional background in the media
sector, his prior senior leadership positions at various companies, and extensive legal experience, make him well qualified as
a member of the Company&rsquo;s board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Executive Compensation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in the section of the Form
S-4 titled &ldquo;New RLJ Executive Officers and Directors&nbsp;&mdash;&nbsp;Compensation of the New RLJ Board and Executive Officers&rdquo;
is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Certain Relationships and Related Transactions, and Director
Independence</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in the sections of the Form
S-4 titled &ldquo;Information About RLJ &ndash; Certain Relationships, Related Transactions and Director Independence&rdquo; and
&ldquo;Information About Image &ndash; Certain Relationships, Related Transactions and Director Independence&rdquo; is incorporated
herein by reference. The information set forth in Items 1.01 and 2.01 above is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Legal Proceedings</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There is no material litigation, arbitration
or governmental proceeding currently pending against the Company or any members of its management team in their capacity as such.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Market Price of and Dividends on the Registrant&rsquo;s Common
Equity and Related Stockholder Matters</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Market Information</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company&rsquo;s common stock trades
on the NASDAQ Capital Market under the symbol RLJE, and the Company&rsquo;s warrants to purchase shares of the Company&rsquo;s
common stock trade on the Over-The-Counter Bulletin Board under the symbol RLJEW. The warrants expire on the earlier of (i) October
3, 2017 and (ii) the liquidation of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Prior to October 3, 2012, there was no established
public trading market for the Company&rsquo;s securities. The information in the sections of the S-4 titled &ldquo;Description
of New RLJ Securities&rdquo; is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of October 3, 2012, approximately 21,041,667
shares of the Company&rsquo;s common stock were reserved for issuance upon the exercise of outstanding warrants. The Company has
no outstanding options. The information in Item 1.01 above, relating to registration rights granted to certain holders of the Company&rsquo;s
common stock is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Holders of Record</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of October 3, 2012, there were approximately
343 holders of the Company&rsquo;s common stock and 30 holders of the Company&rsquo;s warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Page; Sequence: 8 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: left; width: 50%">&nbsp;</TD><TD STYLE="text-align: right; width: 50%"></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Dividends</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company has not paid any cash dividends
on its common stock to date. The payment of cash dividends in the future will be dependent upon the Company&rsquo;s revenues and
earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion
of the Company&rsquo;s board of directors at such time. It is the present intention of the Company&rsquo;s board of directors to
retain all earnings, if any, for use in its business operations and, accordingly, the Company&rsquo;s board of directors does not
anticipate declaring any dividends in the foreseeable future. In addition, the Company&rsquo;s board of directors is not currently
contemplating and does not anticipate declaring any stock dividends in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Recent Sales of Unregistered Securities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information set forth in Items 1.01
and 2.01 above relating to the issuance of the Drawbridge Warrants, the Private Placement Shares and the Private Placement Warrants
is incorporated herein by reference. The information set forth in Item 8.01 below relating to the issuance of warrants to purchase
the Company&rsquo;s common stock to Wexford is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Description of Registrant&rsquo;s Securities to be Registered</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in the section of the Form
S-4 titled &ldquo;Description of New RLJ Securities&rdquo; is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Indemnification of Directors and Officers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in Item 20 of the Form S-4
is incorporated herein by reference. The information set forth in Item 1.01 above relating to the Indemnity Agreements is incorporated
herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Financial Statements and Supplementary Data</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information on pages F-1 through F-117
of the Form S-4 is incorporated herein by reference. The information in the section of RLJ&rsquo;s quarterly report on Form 10-Q
for the quarter ended June 30, 2012, as amended, titled &ldquo;Financial Information - Financial Statements&rdquo; is incorporated
herein by reference. The information in the section of Image&rsquo;s quarterly report on Form 10-Q for the quarter ended June 30,
2012 titled &ldquo;Financial Information - Financial Statements&rdquo; is incorporated herein by reference. The information set
forth in Item 9.01 hereof is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Financial Statements and Exhibits</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in Item 21 of the Form S-4
is incorporated herein by reference. The information set forth in Item 9.01 hereof is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 2.03.</B></TD><TD STYLE="text-align: justify"><B>Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information regarding (i) the Credit
Facility set forth in Item 1.01 above and (ii) the unsecured subordinated promissory notes set forth in Item 2.01 above is incorporated
herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 3.02.</B></TD><TD STYLE="text-align: justify"><B>Unregistered Sales of Equity Securities.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information set forth in Items 1.01
and 2.01 above relating to the issuance of the Drawbridge Warrants, the Private Placement Shares and the Private Placement Warrants
is incorporated herein by reference. The information set forth in Item 8.01 below relating to the issuance of warrants to purchase
the Company&rsquo;s common stock to Wexford is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: left; width: 50%">&nbsp;</TD><TD STYLE="text-align: right; width: 50%"></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 5.01.</B></TD><TD STYLE="text-align: justify"><B>Changes in Control of Registrant</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of the transactions contemplated
by the Merger Agreement and the RLJ Merger, the Company is no longer a wholly-owned subsidiary of RLJ. The common stock of the
Company is now owned by, among others, the former holders of RLJ common stock, the former holders of Image common stock and preferred
stock, and the former holders of Acorn common stock. The former stockholders of RLJ hold approximately 68% of the outstanding common
stock of the Company, with approximately 25% of the outstanding common stock of the Company being held by the Sponsor. The former
stockholders of Image and Acorn own approximately 20% and 12%, respectively, of the outstanding common stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information regarding the transactions
contemplated by the Agreements set forth in Items 1.01 and 2.01 above is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information in the sections of the Form
S-4 titled &ldquo;Summary &ndash; The Proposed Business Combination&rdquo;, &ldquo;The Business Combination&rdquo;, and &ldquo;Description
of New RLJ Securities&rdquo; is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 5.02.</B></TD><TD STYLE="text-align: justify"><B>Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the consummation of the
Transactions, on October 3, 2012, William S. Cohen and Mario Gabelli resigned from their positions as directors of the Company.
Also in connection with the consummation of the Transactions, on October 3, 2012, the following officers of the Company resigned
their respective positions: Lisa Wardell (Chief Financial Officer and Secretary) and H. Van Sinclair (President and Chief Executive
Officer).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Immediately following the Transactions,
on October 3, 2012, the remaining members of the Company&rsquo;s board of directors increased the size of the board to nine persons
and appointed Theodore S. Green, Peter Edwards, Miguel Penella, John W. Hyde, Tyrone Brown, and Ms. Wardell to serve as additional
directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Immediately following the appointment of
the new directors, on October 3, 2012, the Company&rsquo;s board of directors appointed the following individuals as officers of
the Company: Robert L. Johnson (Executive Chairman of the Board), Mr. Green (Chief Executive Officer), Mr. Penella (President and
Chief Operating Officer), Mr. Hyde (President of Global and Strategic Development), and John P. Avagliano (Chief Financial Officer
and Secretary). Peter Edwards will serve as the non-executive Vice-Chairman of the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">At the same time, the board of directors
established (i) an Audit Committee, with Messrs. Brown, Goldfarb, and Edwards as the initial members thereof, Mr. Sinclair as an
observer, and Mr. Brown as chairman, (ii) a Compensation Committee, with Messrs Sinclair, Goldfarb, and Brown as the initial members
thereof and Mr. Sinclair as chairman, and (iii) a Nominating and Corporate Governance Committee, with Ms. Wardell and Messrs. Sinclair
and Edwards as the initial members thereof and Ms. Wardell as the chairwoman.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information regarding the directors
and officers of the Company, set forth in Item 2.01 above, is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The 2012 Incentive Compensation Plan of
RLJ Entertainment, Inc. (the &ldquo;<U>Incentive Plan</U>&rdquo;) was approved by (i) the shareholders of RLJ at a special meeting
on September 20, 2012, as reported on Form 8-K, filed with the SEC by RLJ on September 20, 2012, and incorporated herein by reference,
(ii) the shareholders of Image on September 20, 2012, as reported on Form 8-K, filed with the SEC by Image on September 20, 2012,
and incorporated herein by reference, and (iii) the shareholders of Acorn on October 3, 2012. The Incentive Plan is administered
by the compensation committee of the Company&rsquo;s board of directors, and allows the compensation committee to award up to a
maximum of 2,157,397 shares under the Incentive Plan, provided that the total number of shares of the Company&rsquo;s common stock
is less than 19,416,573. The compensation committee may award Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted
Stock Unit Awards, Bonus Stock and Awards in Lieu of Obligations, Dividend Equivalents, Performance Awards, and Other Stock-Based
Awards (as those terms are defined in the Incentive Plan). No person may be granted (i) Options or Stock Appreciation Rights with
respect to more than 750,000 shares or (ii) Restricted Stock, Restricted Stock Units, Performance Shares, and/or Other Stock Based
Awards with respect to more than 750,000 shares. In addition, no person may be granted more than $1,000,000 with respect to any
12-month Performance Period (as that term is defined in the Incentive Plan) under the Incentive Plan, or $2,000,000 with respect
to any Performance Period that is more than 12 months. The foregoing discussion of the Incentive Plan is qualified in its entirety
by reference to the Incentive Plan, filed with the SEC as Annex L to the Schedule 14A filed by RLJ on August 10, 2012, and incorporated
herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 5.05.</B></TD><TD STYLE="text-align: justify"><B>Code of Ethics.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company did not previously have a code
of ethics. On October 3, 2012, the Company adopted a code of ethics and business conduct for the board of directors and executive
officers of the Corporation pursuant to a unanimous consent of the Company&rsquo;s board of directors. A copy of the code of ethics
is filed herewith as Exhibit 14.1. A copy of the code of ethics is also available on the Company&rsquo;s website at http://www.rljcompanies.com/companies/rlj-entertainment.
Information on such website does not constitute part of this document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 8.01.</B></TD><TD STYLE="text-align: justify"><B>Other Events</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the transactions contemplated
by the Agreements, the Company entered into a Consulting Agreement (the &ldquo;<U>Consulting Agreement</U>&rdquo;) with Wexford
Spectrum Investors LLC (&ldquo;<U>Wexford</U>&rdquo;), pursuant to which Wexford agreed to provide consulting services to the Company
in connection with matters of strategic advice, and in consideration for such services the Company issued 325,000 shares of the
Company&rsquo;s common stock and warrants to purchase 550,000 shares of the Company&rsquo;s common stock to Wexford in a private
placement. Prior to the issuance of the shares of the Company&rsquo;s common stock and the warrants to purchase shares of the Company&rsquo;s
common stock to Wexford, the Sponsor contributed 325,000 shares of RLJ&rsquo;s common stock and warrants to purchase 550,000 shares
of RLJ&rsquo;s common stock for no consideration to RLJ for cancellation. The shares of the Company&rsquo;s common stock and the
warrants to purchase shares of the Company&rsquo;s common stock issued to Wexford, were issued pursuant to an exemption from the
registration requirements under Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder. The shares
to be issued upon exercise of the warrants to purchase shares of the Company&rsquo;s common stock issued to Wexford have not been
registered under the Securities Act, and may not be offered or sold in the United States in the absence of an effective registration
statement or exemption from the registration requirements thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The foregoing description of the Consulting
Agreement is qualified in its entirety by reference to the Consulting Agreement, filed herewith as Exhibit 99.3, which is incorporated
by reference</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 3, 2012, RLJ issued a press release
announcing that it had completed its business combination acquiring Image and Acorn. A copy of the press release is attached as
Exhibit 99.4 to this Current Report on Form 8-K and incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item 9.01.</B></TD><TD STYLE="text-align: justify"><B>Financial Statements and Exhibits.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(a)&#9;Financial Statements of Businesses Acquired</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31.9pt">The information in the F-pages of the Form
S-4 is incorporated herein by reference. The information in the section of RLJ&rsquo;s quarterly report on Form 10-Q for the quarter
ended June 30, 2012, as amended, titled &ldquo;Financial Information - Financial Statements&rdquo; is incorporated herein by reference.
The information in the section of Image&rsquo;s quarterly report on Form 10-Q for the quarter ended June 30, 2012 titled &ldquo;Financial
Information - Financial Statements&rdquo; is incorporated herein by reference. <FONT STYLE="color: black">The financial statements
of Acorn for the six months ended June 30, 2012 and for the six months ended June 30, 2011 are filed as Exhibit 99.5 to this Current
Report on Form 8-K, which information is incorporated herein by reference. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 14pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: left; width: 50%">&nbsp;</TD><TD STYLE="text-align: right; width: 50%"></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(c) &#9;Pro Forma Financial Information &#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 14pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31.9pt"><FONT STYLE="color: black">The </FONT>unaudited<FONT STYLE="color: black">
condensed combined pro forma financial information as of and for the six months ended June 30, 2012 and for the twelve months ended
December 31, 2011 is furnished as Exhibit 99.6 to this Current Report on Form 8-K, which information is incorporated herein by
reference. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(d)&#9;&nbsp;&#9;Exhibits.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 93%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="font-weight: bold; text-align: center">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="font-weight: bold; text-align: center">Number</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">Description</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.1*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Credit Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., and Image Entertainment, Inc., as the Borrowers, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.2*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Pledge and Security Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., Image Entertainment, Inc. Image/Madacy Home Entertainment, LLC, and SunTrust Bank, as administrative agent on behalf of the Secured Parties.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.3*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Amended and Restated Registration Rights Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., JH Partners, LLC, JH Partners Evergreen Fund, LP, JH Investment Partners III, LP, JH Investment Partners GP Fund III, LLC, the shareholders of Acorn Media Group, Inc., Peter Edwards, as the Acorn Representative, RLJ SPAC Acquisition, LLC, William S. Cohen, and Morris Goldfarb.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.4*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Form of Indemnity Agreement, by and between RLJ Entertainment and each Indemnitee.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.5*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Assignment, Assumption and Amendment Agreement, dated as of October 3,
    2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc. and Continental Stock Transfer &amp; Trust Company.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.6*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Form of Unsecured Subordinated Promissory Note.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">14.1*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Code of Ethics.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.1*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Amendment No. 1 to Stock Purchase Agreement, dated as of October 3, 2012, by and Among RLJ Acquisition, Inc., RLJ Entertainment, Inc., Acorn Media Group, Inc., the shareholders of Acorn Media Group, Inc. listed on the attached Exhibit A, and Peter Edwards, as the Shareholder Representative.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.2*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Amendment No. 1 to Preferred Stock Purchase Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and the holders of the Preferred Stock of Image Entertainment, Inc. listed on schedule A to the Preferred Stock Purchase Agreement, dated as of April 1, 2012, by and between RLJ Acquisition, Inc. and the holders of Series B Preferred Stock of Image Entertainment, Inc. .</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.3*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Consulting Agreement, dated as of September 18, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and Wexford Spectrum Investors LLC.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.4*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Press release issued by RLJ Acquisition, Inc. on October 3, 2012.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.5*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Acorn Financial Information</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.6*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Unaudited Pro Forma Condensed Combined Financial Information</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;____________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* Filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of
the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="width: 48%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 43%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3"><B>RLJ ENTERTAINMENT, INC.<BR>
</B>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>Date: October 10, 2012&nbsp;</TD>
    <TD STYLE="vertical-align: top">By:&nbsp;&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid">/s/ John P. Avagliano</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">Name:&nbsp;&nbsp;</TD>
    <TD>John P. Avagliano</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">Title:&nbsp;&nbsp;</TD>
    <TD>Chief Financial Officer</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="5">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 93%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="font-weight: bold; text-align: center">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="font-weight: bold; text-align: center">Number</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">Description</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.1*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Credit Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., and Image Entertainment, Inc., as the Borrowers, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.2*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Pledge and Security Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., Image Entertainment, Inc. Image/Madacy Home Entertainment, LLC, and SunTrust Bank, as administrative agent on behalf of the Secured Parties.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.3*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Amended and Restated Registration Rights Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., JH Partners, LLC, JH Partners Evergreen Fund, LP, JH Investment Partners III, LP, JH Investment Partners GP Fund III, LLC, the shareholders of Acorn Media Group, Inc., Peter Edwards, as the Acorn Representative, RLJ SPAC Acquisition, LLC, William S. Cohen, and Morris Goldfarb.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.4*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Form of Indemnity Agreement, by and between RLJ Entertainment and each Indemnitee.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.5*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Assignment, Assumption and Amendment Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc. and Continental Stock Transfer &amp; Trust Company. &nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">10.6*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Form of Unsecured Subordinated Promissory Note.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">14.1*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Code of Ethics.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.1*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Amendment No. 1 to Stock Purchase Agreement, dated as of October 3, 2012, by and Among RLJ Acquisition, Inc., RLJ Entertainment, Inc., Acorn Media Group, Inc., the shareholders of Acorn Media Group, Inc. listed on the attached Exhibit A, and Peter Edwards, as the Shareholder Representative.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.2*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Amendment No. 1 to Preferred Stock Purchase Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and the holders of the Preferred Stock of Image Entertainment, Inc. listed on schedule A to the Preferred Stock Purchase Agreement, dated as of April 1, 2012, by and between RLJ Acquisition, Inc. and the holders of Series B Preferred Stock of Image Entertainment, Inc. .</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.3*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Consulting Agreement, dated as of September 18, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and Wexford Spectrum Investors LLC.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.4*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Press release issued by RLJ Acquisition, Inc. on October 3, 2012.</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.5*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Acorn Financial Information</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt; text-align: center">99.6*</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 6pt">Unaudited Pro Forma Condensed Combined Financial Information</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;____________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* Filed herewith.</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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{"company-data": {"conformed-name": "RLJ ENTERTAINMENT, INC.", "cik": "0001546381", "assigned-sic": "7822", "irs-number": "454950432", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-35675", "film-number": "121138284"}, "business-address": {"street1": "3 BETHESDA METRO CENTER", "street2": "SUITE 1000", "city": "BETHESDA", "state": "MD", "zip": "20814", "phone": "301-280-7703"}, "mail-address": {"street1": "3 BETHESDA METRO CENTER", "street2": "SUITE 1000", "city": "BETHESDA", "state": "MD", "zip": "20814"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported): October 3, 2012
RLJ ENTERTAINMENT, INC.
(Exact name of registrant as specified in
its charter)
Nevada
(State or other jurisdiction of incorporation)
001-35675
(Commission File Number)
45-4950432
(IRS Employer Identification Number)
RLJ
Entertainment, Inc.
3 Bethesda Metro Center, Suite 1000
Bethesda, Maryland 20814
(Address of principal executive offices)
Registrant's telephone number, including
area code:
(301) 280-7737
N/A
(Former Name or Former Address, if Changed
Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.
                                                                                                                                                     Entry
                                                                                                                                                into
                                                                                                                                                a
                                                                                                                                                Material
                                                                                                                                                Definitive
                                                                                                                                                Agreement.
On October 3, 2012, in connection with the
consummation of the business combination described in Item 2.01 below, RLJ Entertainment, Inc. (the "
Company
"),
RLJ Acquisition, Inc. ("
RLJ
"), Acorn Media Group, Inc. ("
Acorn
"), Image Entertainment, Inc.
("
Image
"), Image/Madacy Home Entertainment, LLC, a majority owned subsidiary of Image ("
IMHE
"),
RLJ Merger Sub I, Inc., a wholly-owned subsidiary of the Company ("
RLJ Sub
"), and RLJ Merger Sub II, Inc., a
wholly-owned subsidiary of the Company ("
Image Sub
"), as borrowers (the Company, RLJ, Image, IMHE, RLJ Sub,
Image Sub, and Acorn, collectively, the "
Borrowers
"), entered into a Credit Agreement (the "
Credit
Facility
") with certain lenders, SunTrust Bank ("
SunTrust
"), as Administrative Agent, and SunTrust
Robinson Humphrey, Inc., as Lead Arranger and Bookrunner. The Credit Facility includes a five-year $15 million revolving credit
facility and three tranches of term loans totaling $55 million with final maturities ranging from five to five and one-half years,
at interest rates ranging from prime rate plus 5% to 6.25% or LIBOR plus 6% to 7.25%, plus an additional 3% per annum paid in kind
on the last $15 million of the facilities. The obligations under the Credit Facility are secured by a lien on substantially all
of the assets of the Borrowers, pursuant to the Pledge and Security Agreement, dated as of October 3, 2012, by and among the Borrowers,
SunTrust, and the certain lenders (the "
Security Agreement
").
The proceeds of the Credit Facility were
used (i) to pay off the existing credit facility of Image, which provided for a revolving line of credit of $17.5 million and had
an expiration date of June 23, 2014, (ii) to pay off the existing credit facility of Acorn, which provided for an $18.0 million
term loan and a $10.0 million revolving line of credit and had an expiration date of February 28, 2015, and (iii) to fund a portion
of the purchase price payable to the Acorn stockholders in connection with the business combination. Amounts available under the
Credit Facility will also be used for general working capital purposes.
In connection with the transactions contemplated
by the Credit Facility, the Company issued to Drawbridge Special Opportunities Fund, LP ("
Drawbridge
"), an affiliate
of one of the lenders under the Credit Facility, warrants to purchase 1,000,000 shares of the Company's common stock in a
private placement (the "
Drawbridge Warrants
"). Prior to the issuance of the Drawbridge Warrants, RLJ SPAC Acquisition,
LLC (the "
Sponsor
") contributed a warrant to purchase 1,000,000 shares of RLJ's common stock for no consideration
to RLJ for cancellation. The Drawbridge Warrants were issued pursuant to an exemption from the registration requirements under
Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder. The shares to be issued upon exercise
of the Drawbridge Warrants have not been registered under the Securities Act, and may not be offered or sold in the United States
in the absence of an effective registration statement or exemption from the registration requirements thereunder.
On October 3, 2012, in connection with the
consummation of the business combination described in Item 2.01 below, the Company, RLJ, JH Partners Evergreen Fund, LP ("
JH
I
"), JH Investment Partners III, LP ("
JH II
"), JH Investment Partners GP Fund III, LLC ("
JH
III
" and, together with JH I and JH II, the "
JH Parties
"), Drawbridge, Miguel Penella, certain shareholders
of Acorn, Peter Edwards as the Acorn Representative, the Sponsor, William S. Cohen, and Morris Goldfarb entered into an amended
and restated registration rights agreement (the "
Registration Rights Agreement
"), pursuant to which the Company
has agreed to register certain of its securities held by the stockholders who are a party to the Registration Rights Agreement
under the Securities Act of 1933, as amended (the "
Securities Act
"). Such stockholders are entitled under such
agreement to make up to three demands, excluding short form registration demands, that the Company register certain of its securities
held by them for sale under the Securities Act. In addition, such stockholders have the right to include their securities in other
registration statements filed by the Company. However, the Registration Rights Agreement provides that no stockholder (other than
the Sponsor) may make a demand (i) with respect to a registration statement on Form S-1 until October 3, 2013 or (ii) with respect
to a registration statement on Form S-3 until July 3, 2013.
On October 3, 2012, immediately following
the consummation of the business combination described in Item 2.01 below, the Company entered into an Indemnity Agreement with
each of its officers and directors (collectively, the "
Indemnity Agreements
"). Pursuant to the Indemnity Agreements,
and subject to the exceptions and limitations provided therein, the Company will indemnify the directors and officers in connection
with the defense of any present or future threatened, pending or completed claim, action, suit or proceeding as allowed under Nevada
law.
1
On October 3, 2012, in connection
with the consummation of the business combination described in Item 2.01 below, the Company, RLJ and Continental Stock
Transfer & Trust Company (the "
Warrant Agent
") entered into an Assignment, Assumption and Amendment
Agreement, pursuant to which RLJ assigned to the Company all of RLJ's rights, title and interest in, and the Company
assumed all of RLJ's liabilities and obligations under, the existing Warrant Agreement, dated as of February 22, 2011,
by and between RLJ and the Warrant Agent which governs the terms of (i) the Fortress Warrants, (ii) the warrants to purchase
shares of the Company's common stock issued to Wexford described in Item 8.01 below and (iii) the warrants issued by
the Company in connection with business combination described in Item 2.01 below.
The foregoing description of the Credit
Facility, the Security Agreement, the Registration Rights Agreement, the form of Indemnity Agreements and the Assignment, Assumption
and Amendment Agreement do not purport to be complete and are qualified in their entirety by reference to such documents, which
are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 respectively, and incorporated herein by this reference.
Item 2.01.   	Completion of Acquisition or Disposition of
Assets.
Consummation of Business Combination with Image and Acorn
On October 3, 2012, pursuant to the Agreement
and Plan of Merger, dated as of April 2, 2012 (the "
Merger Agreement
"), by and among the Company, RLJ, Image,
RLJ Sub and Image Sub, following the consummation of the merger of RLJ Sub with and into RLJ (the "
RLJ Merger
")
and the merger of Image Sub with and into Image (the "
Image Merger
" and, together with the RLJ Merger, the "
Merger
Transaction
"), each of RLJ and Image became wholly owned subsidiaries of the Company.
Upon completion of the Image Merger, each
outstanding share of Image common stock (excluding dissenting shares) were automatically converted into the right to receive 0.00972
shares of the Company's common stock, except that shares of Image common stock held by Image, Image Sub, the Company, or
any direct or indirect wholly owned subsidiary of the Company or Image were canceled without any conversion, payment, or distribution.
Also, upon completion of the RLJ Merger, each share of RLJ common stock was automatically converted into the right to receive consideration
of one share of the Company's common stock (except for 1,267,739 shares of the RLJ's common stock which were contributed
for no consideration by the Sponsor to RLJ for cancellation immediately prior to the RLJ Merger) and each warrant to purchase shares
of RLJ common stock was automatically converted into a warrant to purchase an equal number of shares of the Company's common
stock (except for warrants to purchase 2,850,000 shares of RLJ's common stock which were contributed for no consideration
by the Sponsor to RLJ for cancellation immediately prior to the RLJ Merger).
Immediately prior to the consummation
of the Merger Transaction, and pursuant to the Preferred Stock Purchase Agreement, dated as of April 2, 2012 and amended by
Amendment No. 1 to Preferred Stock Purchase Agreement, dated as of October 3, 2012 (the "
Preferred Stock Purchase
Agreement
"), by and among the Company, RLJ and the holders of Image's Series B Cumulative Preferred Stock
(the "
Preferred Stock
"), such holders sold all of the outstanding shares of Preferred Stock to RLJ. The
aggregate purchase price paid to the holders of the Preferred Stock was (i) an aggregate of $2,800,000 in cash, (ii)
unsecured subordinated promissory notes from the Company in the aggregate principal amount of $14,800,000, (iii) an aggregate
of 575,000 shares of the Company's common stock issued in a private placement (the "
Image Private Placement
Shares
"), and warrants to purchase an aggregate of 150,000 shares of the Company's common stock issued in a
private placement (the "
Image Private Placement Warrants
"). Prior to the issuance of the Image Private
Placement Shares and Image Private Placement Warrants, the Sponsor contributed 75,000 shares of RLJ's common stock and
warrants to purchase 150,000 shares of RLJ's common stock for no consideration to RLJ for cancellation. The unsecured
subordinated notes issued by the Company to the former holders of the Preferred Stock bear interest at 12% per annum, of
which 5.4% is payable in cash annually and the balance is either paid through the issuance of shares of the Company's
common stock valued at their then-current market price, or accrues and is added to principal, which is payable upon maturity.
The subordinated notes mature upon the earlier of six years from the date of issuance or six months after the latest stated
maturity of the senior debt issued pursuant to the Credit Facility. The foregoing description of the form of unsecured
subordinated note does not purport to be complete and is qualified in its entirety by reference to such document, which is
attached hereto as Exhibits 10.6, and incorporated herein by this reference.
2
Immediately following the consummation
of the Merger Transaction, and pursuant to the Stock Purchase Agreement, dated as of April 2, 2012 and amended by Amendment
No. 1 to Stock Purchase Agreement, dated as of October 3, 2012 (the "
Stock Purchase Agreement
" and,
together with the Merger Agreement and the Preferred Stock Purchase Agreement, the "
Agreements
"), by and
among the Company, RLJ, Acorn, the shareholders of Acorn, and Peter Edwards as the shareholder representative, the
shareholders of Acorn sold all the outstanding shares of Acorn's common shares to RLJ (the "
Acorn
Transaction
" and together with the Merger Transaction and the other ancillary transactions contemplated by the
Agreements, the "
Transactions
"). The aggregate purchase price paid to the shareholders of Acorn was (i) an
aggregate of approximately $99.7 million in cash (which amount includes $5,000,000 placed in an indemnity escrow account and
approximately $35.4 million additional Acorn transaction costs), (ii) 1,575,000 shares of the Company's common stock
(consisting of 1,000,000 registered shares (the "
Registered Shares
") and 575,000 shares issued in
a private placement (the "
Acorn Private Placement Shares
" and, together with the Image Private
Placement Shares, the "
Private Placement Shares
")), and (iii) warrants to purchase 1,150,000 shares of
the Company's common stock (consisting of registered warrants to purchase 1,000,000 shares (the "
Registered
Warrants
") and warrants to purchase 150,000 shares issued in a private placement (the "
Acorn Private
Placement Warrants
" and, together with the Image Private Placement Warrants, the "
Private Placement
Warrants
")). Prior to the issuance of the Acorn Private Placement Shares and Acorn Private Placement Warrants, the
Sponsor contributed 75,000 shares of RLJ's common stock and warrants to purchase 150,000 shares of RLJ's common
stock for no consideration to RLJ for cancellation.
The issuance of Company's common stock
in connection with the Merger Transaction and the issuance of the Registered Shares and Registered Warrants, as described above,
was registered under the Securities Act, pursuant to a registration statement on Form S-4 (File No. 333-180714), filed with the
United States Securities and Exchange Commission ("
SEC
") and declared effective on August 10, 2012 (the "
Form
S-4
"). The joint proxy statement/ prospectus included in the Form S-4 contains additional information about the Transaction
and the related transactions. The Private Placement Shares and Private Placement Warrants, were issued pursuant to an exemption
from the registration requirements under Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder.
The shares to be issued upon exercise of the Private Placement Warrants have not been registered under the Securities Act, and
may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration
requirements thereunder.
Business
The Company has not been engaged in any
business prior to the transactions described in Items 1.01 and 2.01 above. Following the consummation of the business combination,
the Company's business will consist of the businesses of RLJ, Image, and Acorn. The businesses of RLJ, Image, and Acorn (collectively,
the "
Businesses
") are described in the Form S-4 in the sections titled "Information about RLJ",
"Information about Image", and "Information about Acorn", each of which section is incorporated herein
by reference.
Risk Factors
The risks associated with the Businesses
are described in the Form S-4, in the sections titled "Risk Factors", which is incorporated herein by reference.
Financial Information
The sections titled "Selected Historical
Financial Data of RLJ", "Selected Consolidated Historical Financial Data of Image", "Selected Consolidated
Historical Financial Data of Acorn", "Information About RLJ – Periodic Reporting and Financial Information",
"Information About RLJ – Management's Discussion and Analysis of Financial Condition and Results of Operations",
"Information About Image – Management's Discussion and Analysis of Financial Condition and Results of Operations",
"Information About Acorn – Management's Discussion and Analysis of Financial Condition and Results of Operations",
"Information About RLJ – Quantitative and Qualitative Disclosures About Market Risk", "Information About
Image – Quantitative and Qualitative Disclosures About Market Risk", and "Information About Acorn – Quantitative
and Qualitative Disclosures About Market Risk" in the Form S-4 are incorporated herein by reference.
3
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information
regarding the beneficial ownership of the Company's common stock as of October 3, 2012, by:
-
each person known by the Company to be the beneficial owner of more than 5% of its outstanding shares of common stock;
-
each of the Company's officers and directors; and
-
all of the Company's officers and directors as a group.
As used in the table below, the term beneficial
ownership with respect to the Company's common stock consists of sole or shared voting power (which includes the power to
vote, or to direct the voting of shares of the Company's common stock) or sole or shared investment power (which includes
the power to dispose, or direct the disposition of, shares of the Company's common stock) through any contract, arrangement,
understanding, relationship or otherwise, including a right to acquire such power(s) during the 60 days following October 3, 2012.
Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with
respect to all shares of common stock beneficially owned by them.
The Company has based its calculation of
the percentage of beneficial ownership on 13,340,451 shares of its common stock outstanding on October 3, 2012 (which amount is
subject to change because no fractional shares will be issued to Image's common stockholders in connection with the Image
Merger).
Name and Address of Beneficial Owner
Number of Shares
of Common Stock
Beneficially Owned
Approximate
Percentage of
Outstanding
Common Stock
Beneficially Owned
RLJ SPAC Acquisition, LLC (RLJ's sponsor)
(1)
3 Bethesda Metro Center, Suite 1000
Bethesda, MD 20814
7,031,678
41.0
%
Robert L. Johnson
(1)
c/o The RLJ Companies
3 Bethesda Metro Center, Suite 1000
Bethesda, MD 20814
7,031,678
41.0
%
H. Van Sinclair
(2)
c/o The RLJ Companies
3 Bethesda Metro Center, Suite 1000
Bethesda, MD 20814
38,333
*
JH Evergreen Management, LLC
(3)
451 Jackson Street
San Francisco, CA 94111-1615
1,934,276
14.5
%
Theodore S. Green
(4)
c/o Image Entertainment, Inc.
20525 Nordhoff Street, Suite 200
Chatsworth, CA 91311
193,815
1.5
%
John W. Hyde
(5)
c/o Image Entertainment, Inc.
20525 Nordhoff Street, Suite 200
Chatsworth, CA 91311
165,783
1.2
%
John P. Avagliano
(6)
c/o Image Entertainment, Inc.
20525 Nordhoff Street, Suite 200
Chatsworth, CA 91311
81,333
*
Peter Edwards
(7)
c/o Acorn Media Group, Inc.
8515 Georgia Avenue, Suite 650
Silver Spring, MD 20910
1,270,047
9.1
%
4
Name and Address of Beneficial Owner
Number of Shares
of Common Stock
Beneficially Owned
Approximate
Percentage of
Outstanding
Common Stock
Beneficially Owned
Miguel Penella
(8)
c/o Acorn Media Group, Inc.
8515 Georgia Avenue, Suite 650
Silver Spring, MD 20910
67,252
*
Lisa Wardell
(9)
c/o The RLJ Companies
3 Bethesda Metro Center, Suite 1000
Bethesda, MD 20814
19,167
*
Tyrone Brown
c/o The RLJ Companies
3 Bethesda Metro Center, Suite 1000
Bethesda, MD 20814
-
-
Morris Goldfarb
(10)
c/o The RLJ Companies
3 Bethesda Metro Center, Suite 1000
Bethesda, MD 20814
257,500
1.9
%
All directors and executive officers as a group (10 people)
9,124,908
51.1
%
* Less than 1%
(1)
The RLJ Companies, LLC is the sole manager and is the
sole voting member of RLJ SPAC Acquisition, LLC. Robert L. Johnson is the sole manager and the sole voting member of The RLJ Companies,
LLC. Mr. Johnson disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. 
Includes 3,215,011 shares of the Company's common stock and warrants to purchase 3,816,667 shares of the Company's
common stock.
(2)
Includes 38,333 shares of the Company's common
stock, held in the name of RLJ SPAC Acquisition, LLC, which may be transferred to Mr. Sinclair at any time.
(3)
Information presented regarding JH Evergreen Management,
LLC, the JH Parties, and John C. Hansen is based on information provided by JH Parties and certain of their affiliates regarding
ownership of Image common stock. The mailing address of JH Evergreen Management and the other affiliate parties identified in
this footnote is 451 Jackson Street, San Francisco, CA 94111-1615. Mr. Hansen disclaimed beneficial ownership of such shares except
to the extent of his pecuniary interest therein.  Includes 1,647,489 shares of the Company's common stock held by JH
I, 196,505 shares of the Company's common stock held by JH II, and 90,282 shares of the Company's common stock held
by JH III.  Does not include warrants to purchase 114,228 shares of the Company's common stock held by JH I, warrants
to purchase 13,625 shares of the Company's common stock held by JH II, or warrants to purchase 6,261 shares of the Company's
common stock held by JH III, none of which are exercisable within 60 days of October 3, 2012..
(4)
Includes 149,405 shares of the Company's common
stock and 44,444 shares of the Company's common stock to be held in escrow until April 3, 2014, subject to forfeiture to
the JH Entities. See "The Business Combination — Interests of Image Directors and Officers in the Business
Combination — Share Escrow Agreement" on page 183 of the Form S-4, which is incorporated herein by reference. 
Also includes 19 shares held as custodian for Mr. Green's children.  Does not include warrants to purchase 6,818 shares
of the Company's common stock which are not exercisable within 60 days of October 3, 2012.
(5)
Mr. Hyde holds all of the shares of the Company's
common stock and warrants to purchase shares of the Company's common stock through Producers Sales Organization, his wholly
owned consulting business ("
PSO
"), except for 40,098 shares of the Company's common stock which he holds
in his own name. Additionally, includes 87,907 shares of the Company's common stock held by PSO and 37,778 shares of the
Company's common stock to be held in escrow for the benefit of PSO until April 3, 2014, subject to forfeiture to the JH
Entities. See "The Business Combination — Interests of Image Directors and Officers in the Business Combination — Share
Escrow Agreement" on page 183 of the Form S-4, which is incorporated herein by reference. Does not include warrants to purchase
5,795 shares of the Company's common stock held by PSO which are not exercisable within 60 days of October 3, 2012.
5
(6)
Includes 63,555 shares of the Company's common
stock and 17,778 shares of the Company's common stock to be held in escrow until April 3, 2014, subject to forfeiture to
the JH Entities. See "The Business Combination — Interests of Image Directors and Officers in the Business
Combination — Share Escrow Agreement" on page 183 of the Form S-4, which is incorporated herein by reference. 
Does not include warrants to purchase 2,727 shares of the Company's common stock which are not exercisable within 60 days
of October 3, 2012.
(7)
Includes 692,523 shares of the Company's common
stock and warrants to purchase 577,524 shares of the Company's common stock held by trusts established by Mr. Edwards for
estate planning purposes.  Does not include warrants to purchase 30,001 shares of the Company's common stock held by
trusts established by Mr. Edwards for estate planning purposes which are not exercisable within 60 days of October 3, 2012.
(8)
Includes 33,626 shares of the Company's common
stock and warrants to purchase 33,626 shares of the Company's common stock.
(9)
Includes 19,167 shares of the Company's common
stock, held in the name of RLJ SPAC Acquisition, LLC, which may be transferred to Ms. Wardell at any time.
(10)
Includes 157,000 shares of the Company's common
stock and warrants to purchase 100,000 shares of the Company's common stock.
Directors and Executive Officers
The information in the section of the Form
S-4 titled "New RLJ Executive Officers and Directors" is incorporated herein by reference. In addition, the following
individuals who were not named in the Form S-4 currently serve as directors of the Company:
Name
Position
Lisa Wardell
Independent Director
Morris Goldfarb
Independent Director
Tyrone Brown
Independent Director
Lisa Wardell
has served as a member of the Company's
board of directors since October 2012. Ms. Wardell has served as executive vice president and chief operating officer of The RLJ
Companies since August 2004. Ms. Wardell also previously served as the chief financial officer and secretary of RLJ Acquisition
from December 2010 until October 2012. Prior to that, Ms. Wardell was a senior associate at Katalyst Venture Partners, a private
equity firm, from September 2000 to January 2003. She has served as a member of the board of directors of DeVry, Inc., a provider
of educational services (NYSE:DV) since November 2008 and a member of the Christopher & Banks board (NYSE:CBK) since 2011 .
Ms. Wardell currently serves on the board of directors of Rollover Systems, Inc., and the RLJ McLarty Landers Automotive Group.
The Company believes that Ms. Wardell's professional background, her leadership position at The RLJ Companies and her current
and past board positions, make her well qualified as a member of the Company's board of directors.
Morris Goldfarb
has served as a member of the Company's
board of directors since April 2012. Mr. Goldfarb previously served as a director of RLJ from February 2011 until October 2012.
He serves as Chairman of the Board and Chief Executive Officer of G-III Apparel Group, Ltd. (Nasdaq: GIII), a designer, manufacturer,
importer and marketer of apparel, handbags and luggage. Mr. Goldfarb has served as an executive officer and director of G-III and
its predecessors since its formation in 1974. Mr. Goldfarb served as a director of Lakes Entertainment, Inc. from June 1998 until
March 2010. We believe that Mr. Goldfarb's professional background, his senior leadership position at G-III Apparel Group,
Ltd., and current and past board positions, make him well qualified as a member of our board of directors. The Company believes
that Mr. Goldfarb's professional background, his senior leadership position at G-III Apparel Group, Ltd., and current and
past board positions, make him well qualified as a member of the Company's board of directors
6
Tyrone Brown
has served as a member of the Company's
board of directors since October 2012. Mr. Brown was the co-founder of District Cablevision, the DC cable television system, where
he was president and a director from 1986 to February 1992 and was general manager from 1998 to 1990. Mr. Brown was an initial
investor and director in the successful re-launch after bankruptcy of IRIDIUM, the global mobile satellite system, serving as IRIDIUM's
vice chairman from January 2002 until a successful public offering in October 2009. Mr. Brown also served as a director and principal
outside counsel of Black Entertainment Television (BET) until its successful public offering in 1991, and vice president and general
counsel of Post-Newsweek Stations, the broadcast station subsidiary of the Washington Post Company from 1971 to 1974. In addition
to his entrepreneurial and business activities, Mr. Brown has practiced communications law at a number of major DC law firms and
served as a law clerk for the late Chief Justice of the Supreme Court Earl Warren, as an aide to Senator Edmund Muskie and as an
FCC Commissioner under the Carter Administration. The Company believes that Mr. Brown's professional background in the media
sector, his prior senior leadership positions at various companies, and extensive legal experience, make him well qualified as
a member of the Company's board of directors.
Executive Compensation
The information in the section of the Form
S-4 titled "New RLJ Executive Officers and Directors — Compensation of the New RLJ Board and Executive Officers"
is incorporated herein by reference.
Certain Relationships and Related Transactions, and Director
Independence
The information in the sections of the Form
S-4 titled "Information About RLJ – Certain Relationships, Related Transactions and Director Independence" and
"Information About Image – Certain Relationships, Related Transactions and Director Independence" is incorporated
herein by reference. The information set forth in Items 1.01 and 2.01 above is incorporated herein by reference.
Legal Proceedings
There is no material litigation, arbitration
or governmental proceeding currently pending against the Company or any members of its management team in their capacity as such.
Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters
Market Information
The Company's common stock trades
on the NASDAQ Capital Market under the symbol RLJE, and the Company's warrants to purchase shares of the Company's
common stock trade on the Over-The-Counter Bulletin Board under the symbol RLJEW. The warrants expire on the earlier of (i) October
3, 2017 and (ii) the liquidation of the Company.
Prior to October 3, 2012, there was no established
public trading market for the Company's securities. The information in the sections of the S-4 titled "Description
of New RLJ Securities" is incorporated herein by reference.
As of October 3, 2012, approximately 21,041,667
shares of the Company's common stock were reserved for issuance upon the exercise of outstanding warrants. The Company has
no outstanding options. The information in Item 1.01 above, relating to registration rights granted to certain holders of the Company's
common stock is incorporated herein by reference.
Holders of Record
As of October 3, 2012, there were approximately
343 holders of the Company's common stock and 30 holders of the Company's warrants.
7
Dividends
The Company has not paid any cash dividends
on its common stock to date. The payment of cash dividends in the future will be dependent upon the Company's revenues and
earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion
of the Company's board of directors at such time. It is the present intention of the Company's board of directors to
retain all earnings, if any, for use in its business operations and, accordingly, the Company's board of directors does not
anticipate declaring any dividends in the foreseeable future. In addition, the Company's board of directors is not currently
contemplating and does not anticipate declaring any stock dividends in the foreseeable future.
Recent Sales of Unregistered Securities
The information set forth in Items 1.01
and 2.01 above relating to the issuance of the Drawbridge Warrants, the Private Placement Shares and the Private Placement Warrants
is incorporated herein by reference. The information set forth in Item 8.01 below relating to the issuance of warrants to purchase
the Company's common stock to Wexford is incorporated herein by reference.
Description of Registrant's Securities to be Registered
The information in the section of the Form
S-4 titled "Description of New RLJ Securities" is incorporated herein by reference.
Indemnification of Directors and Officers
The information in Item 20 of the Form S-4
is incorporated herein by reference. The information set forth in Item 1.01 above relating to the Indemnity Agreements is incorporated
herein by reference.
Financial Statements and Supplementary Data
The information on pages F-1 through F-117
of the Form S-4 is incorporated herein by reference. The information in the section of RLJ's quarterly report on Form 10-Q
for the quarter ended June 30, 2012, as amended, titled "Financial Information - Financial Statements" is incorporated
herein by reference. The information in the section of Image's quarterly report on Form 10-Q for the quarter ended June 30,
2012 titled "Financial Information - Financial Statements" is incorporated herein by reference. The information set
forth in Item 9.01 hereof is incorporated herein by reference.
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
Financial Statements and Exhibits
The information in Item 21 of the Form S-4
is incorporated herein by reference. The information set forth in Item 9.01 hereof is incorporated herein by reference.
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding (i) the Credit
Facility set forth in Item 1.01 above and (ii) the unsecured subordinated promissory notes set forth in Item 2.01 above is incorporated
herein by reference.
Item 3.02.
Unregistered Sales of Equity Securities.
The information set forth in Items 1.01
and 2.01 above relating to the issuance of the Drawbridge Warrants, the Private Placement Shares and the Private Placement Warrants
is incorporated herein by reference. The information set forth in Item 8.01 below relating to the issuance of warrants to purchase
the Company's common stock to Wexford is incorporated herein by reference.
8
Item 5.01.
Changes in Control of Registrant
As a result of the transactions contemplated
by the Merger Agreement and the RLJ Merger, the Company is no longer a wholly-owned subsidiary of RLJ. The common stock of the
Company is now owned by, among others, the former holders of RLJ common stock, the former holders of Image common stock and preferred
stock, and the former holders of Acorn common stock. The former stockholders of RLJ hold approximately 68% of the outstanding common
stock of the Company, with approximately 25% of the outstanding common stock of the Company being held by the Sponsor. The former
stockholders of Image and Acorn own approximately 20% and 12%, respectively, of the outstanding common stock of the Company.
The information regarding the transactions
contemplated by the Agreements set forth in Items 1.01 and 2.01 above is incorporated herein by reference.
The information in the sections of the Form
S-4 titled "Summary – The Proposed Business Combination", "The Business Combination", and "Description
of New RLJ Securities" is incorporated herein by reference.
Item 5.02.
Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the consummation of the
Transactions, on October 3, 2012, William S. Cohen and Mario Gabelli resigned from their positions as directors of the Company.
Also in connection with the consummation of the Transactions, on October 3, 2012, the following officers of the Company resigned
their respective positions: Lisa Wardell (Chief Financial Officer and Secretary) and H. Van Sinclair (President and Chief Executive
Officer).
Immediately following the Transactions,
on October 3, 2012, the remaining members of the Company's board of directors increased the size of the board to nine persons
and appointed Theodore S. Green, Peter Edwards, Miguel Penella, John W. Hyde, Tyrone Brown, and Ms. Wardell to serve as additional
directors of the Company.
Immediately following the appointment of
the new directors, on October 3, 2012, the Company's board of directors appointed the following individuals as officers of
the Company: Robert L. Johnson (Executive Chairman of the Board), Mr. Green (Chief Executive Officer), Mr. Penella (President and
Chief Operating Officer), Mr. Hyde (President of Global and Strategic Development), and John P. Avagliano (Chief Financial Officer
and Secretary). Peter Edwards will serve as the non-executive Vice-Chairman of the board of directors.
At the same time, the board of directors
established (i) an Audit Committee, with Messrs. Brown, Goldfarb, and Edwards as the initial members thereof, Mr. Sinclair as an
observer, and Mr. Brown as chairman, (ii) a Compensation Committee, with Messrs Sinclair, Goldfarb, and Brown as the initial members
thereof and Mr. Sinclair as chairman, and (iii) a Nominating and Corporate Governance Committee, with Ms. Wardell and Messrs. Sinclair
and Edwards as the initial members thereof and Ms. Wardell as the chairwoman.
The information regarding the directors
and officers of the Company, set forth in Item 2.01 above, is incorporated herein by reference.
The 2012 Incentive Compensation Plan of
RLJ Entertainment, Inc. (the "
Incentive Plan
") was approved by (i) the shareholders of RLJ at a special meeting
on September 20, 2012, as reported on Form 8-K, filed with the SEC by RLJ on September 20, 2012, and incorporated herein by reference,
(ii) the shareholders of Image on September 20, 2012, as reported on Form 8-K, filed with the SEC by Image on September 20, 2012,
and incorporated herein by reference, and (iii) the shareholders of Acorn on October 3, 2012. The Incentive Plan is administered
by the compensation committee of the Company's board of directors, and allows the compensation committee to award up to a
maximum of 2,157,397 shares under the Incentive Plan, provided that the total number of shares of the Company's common stock
is less than 19,416,573. The compensation committee may award Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted
Stock Unit Awards, Bonus Stock and Awards in Lieu of Obligations, Dividend Equivalents, Performance Awards, and Other Stock-Based
Awards (as those terms are defined in the Incentive Plan). No person may be granted (i) Options or Stock Appreciation Rights with
respect to more than 750,000 shares or (ii) Restricted Stock, Restricted Stock Units, Performance Shares, and/or Other Stock Based
Awards with respect to more than 750,000 shares. In addition, no person may be granted more than $1,000,000 with respect to any
12-month Performance Period (as that term is defined in the Incentive Plan) under the Incentive Plan, or $2,000,000 with respect
to any Performance Period that is more than 12 months. The foregoing discussion of the Incentive Plan is qualified in its entirety
by reference to the Incentive Plan, filed with the SEC as Annex L to the Schedule 14A filed by RLJ on August 10, 2012, and incorporated
herein by reference.
9
Item 5.05.
Code of Ethics.
The Company did not previously have a code
of ethics. On October 3, 2012, the Company adopted a code of ethics and business conduct for the board of directors and executive
officers of the Corporation pursuant to a unanimous consent of the Company's board of directors. A copy of the code of ethics
is filed herewith as Exhibit 14.1. A copy of the code of ethics is also available on the Company's website at http://www.rljcompanies.com/companies/rlj-entertainment.
Information on such website does not constitute part of this document.
Item 8.01.
Other Events
In connection with the transactions contemplated
by the Agreements, the Company entered into a Consulting Agreement (the "
Consulting Agreement
") with Wexford
Spectrum Investors LLC ("
Wexford
"), pursuant to which Wexford agreed to provide consulting services to the Company
in connection with matters of strategic advice, and in consideration for such services the Company issued 325,000 shares of the
Company's common stock and warrants to purchase 550,000 shares of the Company's common stock to Wexford in a private
placement. Prior to the issuance of the shares of the Company's common stock and the warrants to purchase shares of the Company's
common stock to Wexford, the Sponsor contributed 325,000 shares of RLJ's common stock and warrants to purchase 550,000 shares
of RLJ's common stock for no consideration to RLJ for cancellation. The shares of the Company's common stock and the
warrants to purchase shares of the Company's common stock issued to Wexford, were issued pursuant to an exemption from the
registration requirements under Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder. The shares
to be issued upon exercise of the warrants to purchase shares of the Company's common stock issued to Wexford have not been
registered under the Securities Act, and may not be offered or sold in the United States in the absence of an effective registration
statement or exemption from the registration requirements thereunder.
The foregoing description of the Consulting
Agreement is qualified in its entirety by reference to the Consulting Agreement, filed herewith as Exhibit 99.3, which is incorporated
by reference
On October 3, 2012, RLJ issued a press release
announcing that it had completed its business combination acquiring Image and Acorn. A copy of the press release is attached as
Exhibit 99.4 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01.
Financial Statements and Exhibits.
(a)	Financial Statements of Businesses Acquired
The information in the F-pages of the Form
S-4 is incorporated herein by reference. The information in the section of RLJ's quarterly report on Form 10-Q for the quarter
ended June 30, 2012, as amended, titled "Financial Information - Financial Statements" is incorporated herein by reference.
The information in the section of Image's quarterly report on Form 10-Q for the quarter ended June 30, 2012 titled "Financial
Information - Financial Statements" is incorporated herein by reference.
The financial statements
of Acorn for the six months ended June 30, 2012 and for the six months ended June 30, 2011 are filed as Exhibit 99.5 to this Current
Report on Form 8-K, which information is incorporated herein by reference.
10
(c) 	Pro Forma Financial Information
The
unaudited
condensed combined pro forma financial information as of and for the six months ended June 30, 2012 and for the twelve months ended
December 31, 2011 is furnished as Exhibit 99.6 to this Current Report on Form 8-K, which information is incorporated herein by
reference.
(d)	 	Exhibits.
Exhibit
Number
Description
10.1*
Credit Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., and Image Entertainment, Inc., as the Borrowers, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent.
10.2*
Pledge and Security Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., Image Entertainment, Inc. Image/Madacy Home Entertainment, LLC, and SunTrust Bank, as administrative agent on behalf of the Secured Parties.
10.3*
Amended and Restated Registration Rights Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., JH Partners, LLC, JH Partners Evergreen Fund, LP, JH Investment Partners III, LP, JH Investment Partners GP Fund III, LLC, the shareholders of Acorn Media Group, Inc., Peter Edwards, as the Acorn Representative, RLJ SPAC Acquisition, LLC, William S. Cohen, and Morris Goldfarb.
10.4*
Form of Indemnity Agreement, by and between RLJ Entertainment and each Indemnitee.
10.5*
Assignment, Assumption and Amendment Agreement, dated as of October 3,
    2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc. and Continental Stock Transfer & Trust Company.
10.6*
Form of Unsecured Subordinated Promissory Note.
14.1*
Code of Ethics.
99.1*
Amendment No. 1 to Stock Purchase Agreement, dated as of October 3, 2012, by and Among RLJ Acquisition, Inc., RLJ Entertainment, Inc., Acorn Media Group, Inc., the shareholders of Acorn Media Group, Inc. listed on the attached Exhibit A, and Peter Edwards, as the Shareholder Representative.
99.2*
Amendment No. 1 to Preferred Stock Purchase Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and the holders of the Preferred Stock of Image Entertainment, Inc. listed on schedule A to the Preferred Stock Purchase Agreement, dated as of April 1, 2012, by and between RLJ Acquisition, Inc. and the holders of Series B Preferred Stock of Image Entertainment, Inc. .
99.3*
Consulting Agreement, dated as of September 18, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and Wexford Spectrum Investors LLC.
99.4*
Press release issued by RLJ Acquisition, Inc. on October 3, 2012.
99.5*
Acorn Financial Information
99.6*
Unaudited Pro Forma Condensed Combined Financial Information
____________
* Filed herewith.
11
SIGNATURE
Pursuant to the requirements of
the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
RLJ ENTERTAINMENT, INC.
Date: October 10, 2012
By:
/s/ John P. Avagliano
Name:
John P. Avagliano
Title:
Chief Financial Officer
12
EXHIBIT INDEX
Exhibit
Number
Description
10.1*
Credit Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., and Image Entertainment, Inc., as the Borrowers, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent.
10.2*
Pledge and Security Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc., RLJ Merger Sub I, Inc., RLJ Merger Sub II, Inc., Acorn Media Group, Inc., Image Entertainment, Inc. Image/Madacy Home Entertainment, LLC, and SunTrust Bank, as administrative agent on behalf of the Secured Parties.
10.3*
Amended and Restated Registration Rights Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., JH Partners, LLC, JH Partners Evergreen Fund, LP, JH Investment Partners III, LP, JH Investment Partners GP Fund III, LLC, the shareholders of Acorn Media Group, Inc., Peter Edwards, as the Acorn Representative, RLJ SPAC Acquisition, LLC, William S. Cohen, and Morris Goldfarb.
10.4*
Form of Indemnity Agreement, by and between RLJ Entertainment and each Indemnitee.
10.5*
Assignment, Assumption and Amendment Agreement, dated as of October 3, 2012, by and among RLJ Entertainment, Inc., RLJ Acquisition, Inc. and Continental Stock Transfer & Trust Company.
10.6*
Form of Unsecured Subordinated Promissory Note.
14.1*
Code of Ethics.
99.1*
Amendment No. 1 to Stock Purchase Agreement, dated as of October 3, 2012, by and Among RLJ Acquisition, Inc., RLJ Entertainment, Inc., Acorn Media Group, Inc., the shareholders of Acorn Media Group, Inc. listed on the attached Exhibit A, and Peter Edwards, as the Shareholder Representative.
99.2*
Amendment No. 1 to Preferred Stock Purchase Agreement, dated as of October 3, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and the holders of the Preferred Stock of Image Entertainment, Inc. listed on schedule A to the Preferred Stock Purchase Agreement, dated as of April 1, 2012, by and between RLJ Acquisition, Inc. and the holders of Series B Preferred Stock of Image Entertainment, Inc. .
99.3*
Consulting Agreement, dated as of September 18, 2012, by and among RLJ Acquisition, Inc., RLJ Entertainment, Inc., and Wexford Spectrum Investors LLC.
99.4*
Press release issued by RLJ Acquisition, Inc. on October 3, 2012.
99.5*
Acorn Financial Information
99.6*
Unaudited Pro Forma Condensed Combined Financial Information
____________
* Filed herewith.
13