STUDIO 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.”
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 issuing shares is so financially devastating to the acquiring person, that it has never been done in us history. No shareholder would ever deliberately trip a poison pill because their entire investment could be virtually wiped out.
As the Company seeks to safeguard the interests of all shareholders, this press release is effective notice to Haren Bhakta, his family members and other investors that Tix Corporation has not activated the Shareholder Rights Plan at this time and will continue to monitor Mr. Bhakta’s activities. Of course, Tix Corporation reserves its right to activate the pill and will do so if it is in the best interests of all shareholders.
Tix Corporation wishes to note to its shareholders that this is not the first time it has had to address inappropriate actions by Mr. Bhakta that are to the detriment of the rest of the shareholders. For the past two years, Mr. Bhakta has continually threatened Tix management, while asserting his intentions; to trigger the poison pill. Last year Mr. Bhakta harassed Tix’s staff at the Company’s Las Vegas ticket booths by photographing them and attempting to obtain non-public information about the Company. He entered Tix’s Las Vegas offices under the false pretense of looking for employment. He has contacted directors, employees and management via social networks and repeated his threats. He has repeatedly caused a great deal of unnecessary distraction for Tix management and employees.
Mr. Bhakta communicated to Tix management that he established his fund only a short time ago. He has no background or experience whatsoever in fund management or similar activities. He pursued Tix as his first target although it seems that he has no background in any facet of the ticket business; no background or contacts in Las Vegas entertainment; no background as an officer or director of a publicly traded company; no significant investors other than family members and friends and the mailing address Mr. Bhakta has provided to the company for his fund, is listed to the supposedly family-owned West Coast Motel in Santa Ana, CA.
Given Mr. Bhakta’s actions, the Company felt obliged to provide its shareholders with the information above. Tix urges all shareholders to dismiss any outreach from Mr. Bhakta. We will continue to take all actions to benefit the interests of all shareholders.
About Tix Corporation
Tix Corporation (OTCQX:TIXC) provides discount ticketing services. It currently operates nine discount ticket stores in Las Vegas under its Tix4Tonight marquee and two online properties www.tix4tonight.com and www.tix4.com, which offers up to a 50 percent discount for shows, concerts, attractions, and tours, as well as discount dining and shopping offers. Tix4Tonight also serves as the Official Las Vegas Guest Services Partner for Expedia and its other brands. The co-branded Expedia Local Expert service provides both pre-arrival concierge-type services and in-market concierge-type desk services and related customer service support at physical locations in Las Vegas and online, featuring Tix4Tonight's inventory of discount show and attraction tickets, along with discount dining programs.
Safe Harbor Statement
Except for the historical information contained herein, certain matters discussed in this press release are forward-looking statements which involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements about our future revenues and financial position. These forward-looking statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are discussed in the Company's filings with the OTCQX. The Company assumes no obligation to update these forward-looking statements. A copy of the Company’s reports for the twelve months ended December 31, 2017, can be found on the Company website at www.tixcorp.com or www.otcmarkets.com.
Investor Contacts:
Steve Handy, CFO, (818)761-1002