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Tix Corporation Points Out to Its Shareholder Haren Bhakta and His Family the Actual Consequences of Triggering a Poison Pill
Tix Corporation Points Out to Its Shareholder Haren Bhakta and His Family the Actual Consequences of Triggering a Poison Pill.
About this update from Tix Corporation
[{"type":"text","content":"\nSTUDIO CITY, Calif., July 23, 2018 (GLOBE NEWSWIRE) -- Tix Corporation (“Tix” or the “Company”) (OTCQX:TIXC), shareholder Haren Bhakta,  has notified the Company’s officers, directors and key employees on private and public forums that he (through his own fund HSB Capital Partners, LP) and his group, (mostly comprised of family members) have, according to his determination, exceeded the ownership limitations set forth in the Company’s Shareholder Rights Plan, (also referred to as a poison pill).  The Company is alarmed by the illogical comments made by Mr. Bhakta, including:  “I have intentionally triggered your poison pill”; “I/we dare you to proceed with the poison pill”; and, “if my estimates are correct, CEO Mitch Francis, you will dilute yourself out of control.”\n Tix implemented the Shareholder Rights Plan in 2014, among other things, to preserve its net operating loss carryforwards, (“NOLs”), by limiting the acquisition of more than 4.95% of its outstanding shares.  This is a common practice by companies with significant NOLs because a change of ownership exceeding 50% of the outstanding shares over a three-year period would cause the IRS, under its Code Section 382, to greatly reduce and even nullify the use of that company’s NOLs.  Tix currently has approximately $21.8 million of NOLs to apply against future income. Mr. Bhakta’s correspondence clearly demonstrates no comprehension of how a shareholder rights plan operates and which shareholders risk having their ownership diluted.  Under the Shareholder Rights Plan, every shareholder EXCEPT the acquiring person and its “group” has the right to purchase a significant number of new shares at a very low price.  As a result, all shareholders who exercise their rights will protect and increase their proportionate ownership of the Company, while the acquiring person and his “group” would have their ownership percentage effectively wiped out.  The issuance of so many new shares would also ensure that the acquiring person, in this case Mr. Bhakta and his group, would suffer significant financial losses on their investment. It is important to note that the effect of a company activating a shareholder rights plan and is...