Emerging Entertainment Powerhouse? SportsQuest (OTC: SPQS) and Huayi Cinemas Forge AI-Driven Merger

In the landscape of penny stocks, one company has recently caught the attention of investors with its ambitious merger plans and strategic partnership in the burgeoning Chinese AI cinema industry. SportsQuest, Inc. (OTC: SPQS) has set its sights on a transformative merger with a leading Chinese AI theatre company, Shenzhen Huayi Excellent Cinemas Co., Ltd. (Huayi), marking a significant move towards reshaping the entertainment sector.

Merger Announcement and Strategic Partnership

The journey began in February 2024 when SportsQuest announced its intention to merge with Huayi, a pioneering force in the Chinese cinema industry known for its advanced AI technology and innovative approach to cinema management. The merger announcement highlighted Huayi's impressive track record in cinema operations, boasting a capitalization of $100 million in China and a visionary leadership team with over two decades of experience in movies and cultural development projects.

The merger process, outlined in a supplemental filing, emphasized the commitment of both parties to ensure a seamless transition, including compliance with merger laws. SPQS

expressed its dedication to supporting the merger process and outlined plans for corporate restructuring, including the appointment of new officers and directors and a corporate name change to better reflect its expanded activities.

To provide shareholders and followers with comprehensive insights into the strategic partnership, SportsQuest and Huayi launched a new investor relations website, huayicinemas.net. 

The Huayi Cinemas Advantage

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 AI technology. Huayi's core competitive advantage lies in its digital intelligent system technology, which drives efficient cinema management through its "Thousands of Cities, Ten Thousands of Cinemas" large-scale model. By accurately managing resources and data traffic, Huayi achieves seamless operations, positioning itself as a visionary leader in the industry.

With a commitment to innovation, Huayi offers a diverse range of products and services tailored to enhance the movie-watching experience. Its Huayi Cinema Chain is renowned for high-quality screenings, offering comfortable seating, advanced equipment, and high-quality services. Additionally, Huayi utilizes AI technology to provide personalized services, optimize marketing strategies, and enhance audience engagement.

Huayi's innovation extends to its Huayi Cinema Robot, equipped with digital AI intelligent system technology, enabling automated theater operations and enhancing efficiency. Moreover, Huayi Scent Movie represents an innovative form of movie experience, allowing audiences to experience scents corresponding to on-screen scenes, enriching the viewing experience.

Currently operating 12 theaters across major Chinese cities, Huayi is poised for further expansion, with plans to acquire 50 cinemas by the end of 2024 and reach 500 cinemas by 2028. With a dedicated workforce of 139 employees, Huayi is committed to advancing the film industry through innovation and technology, reshaping the future of cinema.

Formalization of the Merger

As the merger progresses, SportsQuest, Inc. (OTC: SPQS) formalized a Special Purpose Vehicle (SPV) to comply with 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 the merger. With both parties committed to leveraging AI technologies to enhance the cinema experience, the merger promises to deliver innovative solutions and drive market growth.

Latest Announcement:

SportsQuest, Inc. (OTC: SPQS) announced that the long-anticipated merger with Huaying Online Film Co., Ltd. has entered its final stages, marking a significant milestone in the company's strategic growth plan. This merger will see the incorporation of Huaying Online Film Co., Ltd. under the SportsQuest umbrella, further diversifying the company's portfolio and expanding its presence in the digital entertainment sector.

The newly formed subsidiary, Huaying Online Film Co., Ltd., is set to revolutionize the online film industry with its innovative approach and cutting-edge technology. Leveraging SportsQuest's expertise and resources, Huaying Online Film Co., Ltd. aims to deliver unparalleled entertainment experiences to audiences worldwide.

As part of the merger agreement, the corporate structure of Huaying Online Film Co., Ltd. has been finalized as follows:

President: Jinbiao Wang: Jinbiao Wang brings a wealth of experience and leadership to his role as President of Huaying Online Film Co., Ltd. With a deep understanding of the industry and a proven track record of success, Wang is poised to drive the company towards new heights.

Secretary: Lirong Lai: Lirong Lai will serve as Secretary of Huaying Online Film Co., Ltd., overseeing administrative functions and ensuring compliance with regulatory requirements. Lai's attention to detail and organizational skills make her an invaluable asset to the company.

Treasurer: Qianjin Qin: Qianjin Qin will assume the role of Treasurer, responsible for managing the company's finances and ensuring fiscal responsibility. With a keen eye for financial strategy, Qin will play a crucial role in guiding Huaying Online Film Co., Ltd. towards sustainable growth.

Director: Yiyuan Cao: Yiyuan Cao, a shareholder of 51%, will serve as Director of Huaying Online Film Co., Ltd. With a majority ownership stake, Cao will play a pivotal role in shaping the company's strategic direction and vision for the future.

"We are thrilled to announce the finalization of our merger with Huaying Online Film Co., Ltd.," said the spokesperson of SPQS adding, "This strategic partnership represents a significant opportunity for SportsQuest to expand into the AI film industry and deliver innovative entertainment solutions to consumers worldwide. With a strong leadership team in place, we are confident that Huaying Online Film Co., Ltd. will achieve great success under the SportsQuest umbrella."

The merger with Huaying Online Film Co., Ltd. is subject to customary closing terms. Upon completion of the merger, SPQS will provide further updates regarding the integration of Huaying Online Film Co., Ltd. into its operations.

Conclusion

The merger between SportsQuest, Inc. (OTC: SPQS) and Huaying Online Film Co., Ltd. heralds a new chapter for the company, with potential for promising innovation and growth in the rapidly evolving landscape of AI-driven cinema experiences. Investors keen on tapping into the evolving landscape of AI-driven entertainment may find SportsQuest, Inc. an intriguing prospect in the penny stock market.

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