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In the landscape ofpenny stocks, one company has recently caught the attention ofinvestors with its ambitious merger plans and strategic partnership inthe burgeoning Chinese AI cinema industry. SportsQuest, Inc. (OTC:SPQS) has set its sights on a transformative merger with a leadingChinese AI theatre company, Shenzhen Huayi Excellent Cinemas Co., Ltd.(Huayi), marking a significant move towards reshaping theentertainment sector.
Merger Announcement and Strategic Partnership
The journey began inFebruary 2024 when SportsQuest announced its intention to merge withHuayi, a pioneering force in the Chinese cinema industry known for itsadvanced AI technology and innovative approach to cinema management.The merger announcement highlighted Huayi's impressive trackrecord in cinema operations, boasting a capitalization of $100 millionin China and a visionary leadership team with over two decades ofexperience in movies and cultural development projects.
The merger process,outlined in a supplemental filing, emphasized the commitment of bothparties to ensure a seamless transition, including compliance withmerger laws. SPQS
expressed its dedication to supporting the merger process andoutlined plans for corporate restructuring, including the appointmentof new officers and directors and a corporate name change to betterreflect its expanded activities.
To provide shareholders and followers withcomprehensive insights into the strategic partnership, SportsQuest andHuayi launched a new investor relations website, huayicinemas.net.
The Huayi CinemasAdvantage
Huayi Cinemas, headquartered in Futian District, Shenzhen,Guangdong Province, China, is a trailblazer in the cinema industry,leading the chain operation of movie theaters with its cutting-edge AItechnology. Huayi's core competitive advantage lies in its digitalintelligent system technology, which drives efficient cinemamanagement through its "Thousands of Cities, Ten Thousands ofCinemas" large-scale model. By accurately managing resources anddata traffic, Huayi achieves seamless operations, positioning itselfas a visionary leader in the industry.
With a commitment to innovation, Huayi offersa diverse range of products and services tailored to enhance themovie-watching experience. Its Huayi Cinema Chain is renowned forhigh-quality screenings, offering comfortable seating, advancedequipment, and high-quality services. Additionally, Huayi utilizes AItechnology to provide personalized services, optimize marketingstrategies, and enhance audience engagement.
Huayi's innovationextends to its Huayi Cinema Robot, equipped with digital AIintelligent system technology, enabling automated theater operationsand enhancing efficiency. Moreover, Huayi Scent Movie represents aninnovative form of movie experience, allowing audiences to experiencescents corresponding to on-screen scenes, enriching the viewingexperience.
Currently operating 12 theaters across major Chinese cities,Huayi is poised for further expansion, with plans to acquire 50cinemas by the end of 2024 and reach 500 cinemas by 2028. With adedicated workforce of 139 employees, Huayi is committed to advancingthe film industry through innovation and technology, reshaping thefuture of cinema.
Formalization of the Merger
As the merger progresses, SportsQuest, Inc.(OTC: SPQS) formalized a Special Purpose Vehicle (SPV) to complywith China's regulatory requirements on March 21. The SPV,designed to isolate risk and facilitate non-dilutive investment,represents a crucial step towards realizing the full potential of themerger. With both parties committed to leveraging AI technologies toenhance the cinema experience, the merger promises to deliverinnovative solutions and drive market growth.
Latest Announcement:
SportsQuest, Inc. (OTC: SPQS) announced that thelong-anticipated merger with Huaying Online Film Co., Ltd. has enteredits final stages, marking a significant milestone in the company'sstrategic growth plan. This merger will see the incorporation ofHuaying Online Film Co., Ltd. under the SportsQuest umbrella, furtherdiversifying the company's portfolio and expanding its presence inthe digital entertainment sector.
The newly formed subsidiary, Huaying Online FilmCo., Ltd., is set to revolutionize the online film industry with itsinnovative approach and cutting-edge technology. LeveragingSportsQuest's expertise and resources, Huaying Online Film Co.,Ltd. aims to deliver unparalleled entertainment experiences toaudiences worldwide.
As part of the merger agreement, the corporate structure ofHuaying Online Film Co., Ltd. has been finalized as follows:
President: Jinbiao Wang: Jinbiao Wang brings a wealth of experience andleadership to his role as President of Huaying Online Film Co., Ltd.With a deep understanding of the industry and a proven track record ofsuccess, Wang is poised to drive the company towards newheights.
Secretary: Lirong Lai: Lirong Lai will serve asSecretary of Huaying Online Film Co., Ltd., overseeing administrativefunctions and ensuring compliance with regulatory requirements.Lai's attention to detail and organizational skills make her aninvaluable asset to the company.
Treasurer: Qianjin Qin: Qianjin Qin willassume the role of Treasurer, responsible for managing thecompany's finances and ensuring fiscal responsibility. With a keeneye for financial strategy, Qin will play a crucial role in guidingHuaying Online Film Co., Ltd. towards sustainable growth.
Director: YiyuanCao: Yiyuan Cao, a shareholder of 51%, will serve as Director ofHuaying Online Film Co., Ltd. With a majority ownership stake, Caowill play a pivotal role in shaping the company's strategicdirection and vision for the future.
"We are thrilled to announce the finalizationof our merger with Huaying Online Film Co., Ltd.," said thespokesperson of SPQS adding, "This strategic partnershiprepresents a significant opportunity for SportsQuest to expand intothe AI film industry and deliver innovative entertainment solutions toconsumers worldwide. With a strong leadership team in place, we areconfident that Huaying Online Film Co., Ltd. will achieve greatsuccess under the SportsQuest umbrella."
The merger with HuayingOnline Film Co., Ltd. is subject to customary closing terms. Uponcompletion of the merger, SPQS will provide further updatesregarding the integration of Huaying Online Film Co., Ltd. into itsoperations.
Conclusion
The mergerbetween SportsQuest, Inc. (OTC: SPQS) and Huaying Online FilmCo., Ltd. heralds a new chapter for the company, with potential forpromising innovation and growth in the rapidly evolving landscape ofAI-driven cinema experiences. Investors keen on tapping into theevolving landscape of AI-driven entertainment may find SportsQuest,Inc. an intriguing prospect in the penny stockmarket.
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