Helios and Matheson Analytics, Inc. (NASDAQ:HMNY), the MoviePass parent company has revealed plans to spin off their movie subscription service. The company said that the board of directors had a proved a plan of creating a film production, promotion and exhibition chain company. The new plan will create a new entity that will take over the shares of MoviePass to serve as a listed company in addition to other Helios film assets.
The company aims at getting a separate entity listed in The NASDAQ exchange or any other trading market. They are currently waiting for the Securities and Exchange Commission to finish the review process that will consider their registration statement operational. The new holding company will have a membership of MoviePass plus that of Emmett Furla Oasis Films including other assets.
Helios and Matheson CEO, Ted Farnsworth, indicated in a statement that since the acquisition of MoviePass in 2017, they had been the company’s public eye which led to the decision to believe that their shareholders can benefit from the separation of the movie-related entities from the rest of the assets.
Distribution of stock
The proposed arrangement will see Helios and Matheson distribute its minatory shares of the new company as dividends to their shareholders. However, the company will still be in control of MoviePass after distributing the shares. Holders of convertible notes issues since November 2017 and warrants of Helios and Matheson will have a right to participate in the share distribution.
Although Moviepass was gaining a healthy following since its inception, it, however, struggled recently with the loss of subscribers and service outages. Equally the increase in competition from companies that are offering cinema subscriptions affected their business.
Last year Helios and Matheson issued a warning to their investors that there were chances that they could not continue their operations through to November this year. The company indicated that they had a $377 million accumulated deficit as of September last year compared to $189 million in 2017.