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On Tuesday, MoviePass's parent company, Helios and Matheson Analytics, announced a preliminary plan to spin off MoviePass and its related entertainment assets into a separate public company.
The announcement was made in the wake of the New York Attorney General's Office said it was investigating Helios and Matheson to determine the company's misled investors, a claim the company denied. It also came days before a crucial shareholders meeting to take place November 1, when Helios and Matheson is expected to seek authorization for a 1-for-500 reverse stock split – a move some investors are against. The reverse split is an attempt to raise Helios and Matheson's stock price to avoid the Nasdaq, which could happen as soon as mid-December.
"For many years, HMNY has been focused on data analytics, and has had a global security service provider," Helios and Matheson CEO Ted Farnsworth said in a statement on the spin-off, using an abbreviation for Helios and Matheson. "Since we acquired control of MoviePass in December 2017, HMNY has become more popular with MoviePass in the public eye, leading us to believe that our shareholders and the market perception of HMNY company. "
Helios and Matheson has a complicated history as a Nasdaq-listed company. Before the Farnsworth-MoviePass era, the New York outpost of Helios and Matheson was controlled by an Indian company (Helios and Matheson Information Technology), which stands accused of defrauding at least 5,000 creditors in India, including banks and senior citizens. The company was involved in many facets of information-technology consulting.
HMIT in India began to extricate itself from the US business in 2016 when HMNY merged with Farnsworth's money-losing startup, Zone Technologies. Zone Technologies created a "GPS-driven, real-time crime and navigation map application." The RedZone Map app has not been updated since April, however, and does not appear to function as intended.
At present, MoviePass effectively accounts for all of Helios and Matheson's business.
But the Nasdaq listing of Helios and Matheson has been crucial to MoviePass, as it has the movie-ticket subscription app to fund hundreds of millions of dollars in favor of selling new shares of Helios and Matheson stock to the public. This is the rank of many shareholders who have had their stakes diluted and the price of the crater – Helios and Matheson is now trading at about $ 0.02. Some retail investors have seen their stakes drop over 99% in value and told you they have lost $ 100,000 on the stock.
Now Helios and Matheson seeks to spin off MoviePass to another publicly listed company.
Here's the plan, according to Helios and Matheson:
"HMNY is endeavoring to create MoviePass Entertainment Holdings as one of the following publicly owned assets: (i) the shares of common stock of MoviePass Inc. ('MoviePass'), held by HMNY, which currently includes approximately 92% of the outstanding shares (excluding options and warrants) of MoviePass, (ii) the membership interests of MoviePass Films LLC ('MoviePass Films'), HMNY's movie production company partnered with Emmett Furla Oasis Films , held by HMNY, equal to 51% of the outstanding membership interests of MoviePass Films, (iii) the membership interests of MoviePass Ventures LLC ('MoviePass Ventures'), an acquirer and owner of economic interests in completed films, held by HMNY, and (iv) Moviefone ™, a multimedia media information and advertising service.
If permitted to do so under the law, HMNY plans to distribute a minority of the outstanding shares of MoviePass HMNY shares a dividend to stockholders of HMNY as a record date, and HMNY retaining control HMNY, HMNY, HMNY, HMNY, HMNY, and certain warrants of HMNY, as of the applicable record date, would be entitled to participate in any distribution of MoviePass Entertainment shares to the extent The following is a translation of the English translation provided by HMNY on June 4, 2018, all the convertible notes issued by HMNY in June 2018 have been canceled.
"Regardless of whether or not HMNY shares a share of the MoviePass Entertainment shares held by Delaware law, HMNY plans to seek out MoviePass Entertainment to become a separate public company listed on Nasdaq or an alternate trading market, if MoviePass Entertainment can satisfy the applicable initial listing of the applicable exchange or trading market. "
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