The parent company announced that its board of directors has preliminarily approved a plan to create a new subsidiary, MoviePass Entertainment, that would take ownership of the shares of MoviePass and its other film-related assets.
There's no guarantee Helios & Matheson will be able to execute the spinoff.
The announcement came six days after the New York Attorney General launched an investigation into whether Helios & Matheson Analytics misled investors regarding its financials.
The proposed MoviePass Entertainment Holdings would include: the shares of common stock of MoviePass Inc. held by HMNY, which now owns 92% of the outstanding shares; the membership interests of MoviePass Films, HMNY's movie production company partnered with Emmett Furla Oasis Films; the membership interests of MoviePass Ventures, which was established to acquire completed films; Moviefone, which HMNY bought from Verizon's Oath earlier this year.
"We believe this new vertically integrated entertainment ecosystem, if achieved, would provide a sharper market focus, and that the combination of these four business lines under the MoviePass Entertainment umbrella would produce substantial synergies that we believe will generate value for our shareholders, subscribers, and business partners", said Farnsworth.
The plan must still be approved by Nasdaq, the SEC and the state of Delaware. HMNY said it plans to continue focusing on data analytics and consumer-centric technologies.