Filed Pursuant to Rule 424(b)(3)
Registration No. 333-262217
PROSPECTUS
(formerly known as Aerocentury Corp.)
2,397,305 Shares
Common Stock
Pursuant to this prospectus, the selling stockholder identified
herein are offering on a resale basis an aggregate of 2,397,305
shares of our common stock that were issued in connection with a
private placement we completed on September 30, 2021. We will not
receive any of the proceeds from the sale by the selling
stockholder of the common stock.
The selling stockholder may sell or otherwise dispose of the common
stock covered by this prospectus in a number of different ways and
at varying prices. We provide more information about how the
selling stockholder may sell or otherwise dispose of the common
stock covered by this prospectus in the section entitled “Plan of
Distribution” on page 18. Discounts, concessions, commissions and
similar selling expenses attributable to the sale of common stock
covered by this prospectus will be borne by the selling
stockholder. We will pay all expenses (other than discounts,
concessions, commissions and similar selling expenses) relating to
the registration of the common stock with the Securities and
Exchange Commission.
On December 30, 2021, we implemented a five (5) for one (1) forward
stock split (the “Forward Stock Split”) of our issued and
outstanding common stock, par value $0.001 per share. References to
our common stock in this prospectus have been adjusted to give
effect to the Forward Split.
Effective March 25, 2022, we changed our name from Aerocentury
Corp. to Mega Matrix Corp. to better reflect our expansion into
Metaverse and the non-fungible tokens (NFTs) gaming business. Our
common stock is listed on the NYSE American under the symbol
“MTMT.” On October 10, 2022, the last reported sale price of our
common stock was $1.89 per share.
INVESTING IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD REVIEW
CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING
“RISK FACTORS” CONTAINED ON PAGE 4 HEREIN AND IN OUR ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2021, AS WELL AS OUR
SUBSEQUENTLY FILED PERIODIC AND CURRENT REPORTS, WHICH WE FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION AND ARE INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY BEFORE YOU MAKE YOUR INVESTMENT DECISION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES
OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is October 11, 2022
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus may constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements relate to future events
concerning our business and to our future revenues, operating
results and financial condition. In some cases, you can identify
forward-looking statements by terminology such as “may,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “believe,” “estimate,” “forecast,” “predict,” “propose,”
“potential” or “continue,” or the negative of those terms or other
comparable terminology.
Any forward-looking statements contained in this prospectus are
only estimates or predictions of future events based on information
currently available to our management and management’s current
beliefs about the potential outcome of future events. Whether these
future events will occur as management anticipates, whether we will
achieve our business objectives, and whether our revenues,
operating results or financial condition will improve in future
periods are subject to numerous risks. There are a number of
important factors that could cause actual results to differ
materially from the results anticipated by these forward-looking
statements. These important factors include those that we discuss
under the heading “Risk Factors” in this prospectus and in other
reports filed from time to time with the Securities and Exchange
Commission (SEC) that are incorporated by reference into this
prospectus. You should read these factors and the other cautionary
statements made in this prospectus and in the documents which we
incorporate by reference into this prospectus as being applicable
to all related forward-looking statements wherever they appear in
this prospectus or the documents we incorporate by reference into
this prospectus. If one or more of these factors materialize, or if
any underlying assumptions prove incorrect, our actual results,
performance or achievements may vary materially from any future
results, performance or achievements expressed or implied by these
forward-looking statements. We undertake no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
ABOUT THIS
PROSPECTUS
This prospectus is part of a registration statement on Form S-1
that we filed with the SEC using a continuous offering process.
You should read this prospectus and the information and documents
incorporated by reference carefully. Such documents contain
important information you should consider when making your
investment decision. See “Where You Can Find Additional
Information” and “Incorporation of Information by Reference” in
this prospectus.
You should rely only on the information provided in this prospectus
or documents incorporated by reference into this prospectus. We
have not authorized anyone to provide you with different
information. This prospectus covers offers and sales of our common
stock only in jurisdictions in which such offers and sales are
permitted. The information contained in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common stock. You
should not assume that the information contained in this prospectus
is accurate as of any date other than the date on the front cover
of this prospectus, or that the information contained in any
document incorporated by reference is accurate as of any date other
than the date of the document incorporated by reference, regardless
of the time of delivery of this prospectus or any sale of a
security.
Effective March 25, 2022, we changed our name from Aerocentury
Corp. to Mega Matrix Corp. to better reflect our expansion into
Metaverse and non-fungible tokens (NFTs) gaming business. All
references in this prospectus, unless the context indicates
otherwise, to “AeroCentury” refers to AeroCentury Corp. and the
“Company,” “we,” “us,” and “our” refers to AeroCentury prior to
March 25, 2022, and renamed “Mega Matrix Corp.” commencing on March
25, 2022, and, except where expressly noted otherwise or the
context otherwise requires, its consolidated subsidiaries.
ABOUT MEGA MATRIX
CORP.
Business of the Company
We are engaged in the non-fungible tokens (NFTs) gaming business in
the metaverse ecosystem which was launched in late March 2022. In
addition, to a lesser extent, we are engaged in the provision of
aircraft advisory and management services since September 30, 2021.
We operate through our two subsidiaries, Mega Metaverse Corp., a
California corporation (“Mega”) and JetFleet Management Corp., a
California corporation and formerly known as JetFleet Holding
corporation (“JetFleet”). Effective March 25, 2022, we changed our
name from Aerocentury Corp. to Mega Matrix Corp. to better reflect
our expansion into Metaverse and the NFT gaming business.
On March 25, 2022, we released our NFT game “Mano” through Mega.
Mano is a competitive idle role-playing game (RPG) deploying the
concept of NFTs based on blockchain technology, with a
“Play-to-earn” business model that the players can earn while they
play in Mega’s metaverse universe “alSpace”. We are responsible for
creating, developing, operating and maintaining the alSpace
platform which has been completed for the Mano game.
Mano is played using our NFT alBots, Genesis alBots and non-Genesis
alBots. An alBot is the main character of Mano game and potential
future games played on the alSpace platform. alBots are small
intelligent robots created on alSpace platform with unique genomes
with body parts consisting of a torso and seven parts, each with
unique characteristics. These features are determined by the
genetic code of the alBot, which can be extracted by the alpha
matrix and recombined with other alBot's genes to become a new
alBot. A player enhances the alBots’ features through
its genomes, tools, equipment and skills. In addition to game play
alBots may be traded in our alSpace platform. Genesis alBots are
better designed and have more functions and capabilities, which may
create greater demand and collection value. Non-Genesis alBots with
ordinary design do not have as much value because of its limited
energy level. As of June 30, 2022, we randomly distributed
sixty-six (66) Genesis alBots to early twenty-two reservation
holders. In addition, we also distributed some non-Genesis alBots
to our team members and developers for beta testing and are
restricted from trading. Players with Genesis alBots can receive
higher rewards in terms of Mano coin, a token issued by the Company
on the alSpace platform. Mano coins can only be obtained by playing
the Mano game and can only be used in the game for creating Genomes
through the cloning and conversion process of the alBots. The Mano
coins cannot be traded or sold in the alSpace marketplace. The
NFTs, consisting of alBots and Genomes are created by players and
supported by Binance Smart Chain. The use of blockchain will be
utilized for identification and authentication of alBots and other
digital collectables owned by the players. We will not use a
proprietary blockchain.
Currently we earn fees from our Mano game as follows:
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Resetting
Genesis alBots. Through game play, the energy level of the Genesis
alBots will be depleted. To reset the energy level, a player can
pay a fee to reset Genesis alBots back to its original maximum
energy level. Players cannot reset non-Genesis alBots. |
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Service
Fee. We charge a service fee for each sale transaction that take
place on our alSpace marketplace. Players can sell or trade their
alBots, tools and weapons from the Mano game in our alSpace
marketplace. |
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Synthesis
Fee. Our players can clone or convert their alBots to Genomes using
Mano coins. By cloning an alBot, a player can randomly extract
certain genes/attributes from the alBot and create a new NFT which
we call Genome. Each alBot can only make seven (7) clones, however,
Genesis alBots can be reset to make seven (7) additional clones. In
addition, players can convert its alBots into a Genome. Once the
alBot is converted into a Genome, the original alBot is consumed.
Players can synthesize two Genomes to create a new alBot based on
the genes/attributes contained in the Genomes. In addition, the
Genomes can be traded or sold on the alSpace marketplace. We charge
a service fee for this synthesis process. |
Players use Metamask, a third party software company that developed
a non-custodial wallet, to pay for our services and to purchase
products and make trades. Neither we nor Metamask will accept
responsibility for any losses associated with the non-custodial
wallet. We accept Binance (BNB) payment for our services. We
convert most of the BNBs into stable cryptocurrencies such as USDC
and USDT. For the six months ended June 30, 2022, we received
approximately $326,800 of BNB in revenue for our services. Due to
regulatory challenges, we plan to discontinue the Mano game and the
alSpace platform on or before the end of December 31, 2022. We plan
to explore other crypto-related business models outside of the
United States.
In addition, through our 51.0% ownership in JetFleet as of June 30,
2022, we will continue to focus on third-party management service
contracts for aircraft operations. We believe that as passive
investor interest in aircraft assets has increased, there has been
increasing demand from aircraft investors for professional
third-party aircraft leasing and portfolio management. We intend to
take advantage of our reputation, experience and expertise in this
aircraft management area. JetFleet conducts all of its operations
from its office located at 1818 Gilbreth Rd., Suite 243,
Burlingame, California, United States.
Bankruptcy
We and our then subsidiaries, JetFleet Holdings Corp., a California
corporation (“JHC”) and JetFleet Management Corp. (“JMC” along with
JHC collectively “Debtors”), filed on March 29, 2021, a voluntary
petition for bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code. The filing was made in the U.S. Bankruptcy Court
for the District of Delaware (the “Bankruptcy Court”) Case No.
21-10636 (the “Chapter 11 Case”). We also filed motions with the
Bankruptcy Court seeking authorization to continue to operate our
business as “debtor-in-possession” under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Bankruptcy Court.
On August 16, 2021, in the Bankruptcy Court, the Debtors filed
unexecuted drafts of its Plan Sponsor Agreement to be entered into
between us, Yucheng Hu, TongTong Ma, Qiang Zhang, Yanhua Li, Yiyi
Huang, Hao Yang, Jing Li, Yeh Cheng and Yu Wang, and identifying
such individuals, collectively, as “Plan Sponsors” (the “Plan
Sponsor Agreement”), and related agreements and documents required
thereunder (collectively, with the Plan Sponsor Agreement, the
“Plan Sponsor Documents”). The Plan Sponsor Documents were intended
to cover the transactions contemplated by an investment term sheet
entered into with Yucheng Hu and are part of the Debtors' plan of
reorganization as reflected in the Combined Disclosure Statement
and Plan filed with the Bankruptcy Court as amended and
supplemented from time to time (the “Plan”). On August 31, 2021,
the Bankruptcy Court entered an order, Docket No. 0296 (the
“Confirmation Order”), confirming the Plan as set forth in the
Combined Plan Statement and Plan Supplement.
On September 30, 2021 and pursuant to the Plan Sponsor Agreement,
we entered into and consummated the transactions contemplated by a
Securities Purchase Agreement with the Plan Sponsor, and Yucheng
Hu, in the capacity as the representative for the Plan Sponsor
thereunder, pursuant to which we issued and sold, and the Plan
Sponsor purchased, 2,870,927 (14,354,635 post-split) shares of our
common stock at $3.85 for each share of common stock for an
aggregate purchase price of approximately $11,053,069.
Also on September 30, 2021, and pursuant to the Plan Sponsor
Agreement, we entered into and consummated the transactions
contemplated by a Series A Preferred Stock Purchase Agreement (the
“JHC Series A Agreement”) with JHC, pursuant to which JHC issued
and sold, and we purchased, 104,082 shares of Series A Preferred
Stock, no par value, at $19.2156 per share of JHC Series A
Preferred Stock, for an aggregate purchase price of $2 million.
Each share of JHC Series A Preferred Stock shall be entitled to one
(1) vote on any matter that is submitted to a vote or for the
consent of the shareholders of JHC. The JHC Series A Preferred
Stock provides the Company with 74.83% voting control over JHC
immediately following its issuance.
On January 1, 2022, JMC, a wholly-owned subsidiary of JHC, was
merged with and into JHC, with JHC being the surviving entity. As
part of the merger, JHC changed its name to JetFleet Management
Corp. (“JetFleet”).
Change In Control
As a condition to the closing of the Securities Purchase Agreement,
Michael G. Magnusson resigned as President and Chief Executive
Officer; Harold M. Lyons resigned as Chief Financial Officer,
Treasurer, Senior Vice President, Finance and Secretary; and
Michael G. Magnusson, Toni M. Perazzo, Roy E. Hahn, Evan M. Wallach
and David P. Wilson resigned as directors of the Company effective
October 1, 2021.
Effective as on October 1, 2021, Yucheng Hu, Florence Ng, Jianan
Jiang, Qin Yao and Siyuan Zhu (the “Incoming Directors”) were
appointed to serve as members on our Board of Directors. The
Incoming Directors were designated by the Plan Sponsor pursuant to
the Plan Sponsor Agreement to hold office until our next annual
meeting. The Incoming Directors appointed Mr. Hu to serve as
Chairman, President and Chief Executive Officer; Ms. Ng to serve as
Vice President of Operations; and Qin (Carol) Wang to serve as its
Chief Financial Officer, Secretary and Treasurer the Company.
Recent Development
On September 29, 2022, we entered into a Securities Purchase
Agreement (the “Purchase Agreement”) with certain accredited
investors named in the Purchase Agreement (collectively, the
“Purchasers”), pursuant to which the Company agreed to sell an
aggregate of 4,400,000 shares of the Company’s common stock, $0.001
par value per share (the “Common Stock”) at a purchase price of
$1.00 per share (the “Private Placement”). The gross proceeds of
the Private Placement were $4.4 million, before deducting offering
expenses payable by the Company. The Purchase Agreement contains
customary representations, warranties and covenants of the parties,
and the closing is subject to customary closing conditions. The
closing of the Private Placement is anticipated to occur in October
2022.
Additional Information
We are a Delaware corporation incorporated in 1997. Our headquarter
is located at 3000 El Camino Real, Bldg. 4, Suite 200, Palo Alto,
CA. Our main telephone number is (650) 340-1888. Our website is
located at: http://www.mtmtgroup.com.
RISK FACTORS
An investment in our common stock involves risks. Prior to making a
decision about investing in our common stock, you should consider
carefully the risks together with all of the other information
contained or incorporated by reference in this prospectus,
including any risks in the section entitled “Risk Factors”
contained in any supplements to this prospectus and in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021,
and in our subsequent filings with the SEC. Each of the referenced
risks and uncertainties could adversely affect our business,
operating results and financial condition, as well as adversely
affect the value of an investment in our securities. Additional
risks not known to us or that we believe are immaterial may also
adversely affect our business, operating results and financial
condition and the value of an investment in our securities.
Risks Related to our Business
A particular digital asset’s status, such as an NFT, including
our alBots, Genomes and weapons, as a “security” in any relevant
jurisdiction is subject to a high degree of uncertainty and if a
regulator disagrees with our characterization of the NFT or Mano
coin, we may be subject to regulatory scrutiny, investigation,
fines and penalties, which may adversely affect our business,
operating results and financial condition. A determination that a
NFT or our Mano coin is a “security” may adversely affect the value
of those NFTs, Mano coins, and our business.
The SEC and its staff have taken the position that certain digital
assets such as a NFT may fall within the definition of a “security”
under U.S. federal securities laws. The legal test for determining
whether any given digital asset is a security is a highly complex,
fact-driven analysis that may evolve over time, and the outcome is
difficult to predict. Our determination that the NFTs that are
developed by players and our Mano coins are not securities is a
risk-based assessment and not a legal standard or one binding on
regulators. The SEC generally does not provide advance guidance or
confirmation on the status of any particular digital asset as a
security.
The classification of a digital asset as a security under
applicable law has wide-ranging implications for the regulatory
obligations that flow from the offer, sale, trading, and clearing
of such assets. For example, a digital asset that is a security may
generally only be offered or sold pursuant to a registration
statement filed with the SEC or in an offering that qualifies for
an exemption from registration. Persons that effect transactions in
digital assets that are securities may be subject to registration
with the SEC as a “broker” or “dealer.” Platforms that bring
together purchasers and sellers to trade digital assets that are
securities are generally subject to registration as national
securities exchanges, or must qualify for an exemption, such as by
being operated by a registered broker-dealer as an alternative
trading system (“ATS”), in compliance with rules for ATS’s. Persons
facilitating clearing and settlement of securities may be subject
to registration with the SEC as a clearing agency.
We analyze
whether the NFTs that are related to our games and the Mano coin
could be deemed to be a “security” under applicable laws. Our
analysis does not constitute a legal standard, but rather represent
our management’s assessment regarding the likelihood that a
particular digital asset could be deemed a “security” under
applicable laws. Regardless of our conclusions, we could be subject
to legal or regulatory action in the event the SEC or a court were
to determine that NFTs that are
generated by our games or Mano coin may be deemed a “security”
under applicable laws.
There can be no assurances that we will properly characterize any
given digital asset as a security or non-security or that the SEC,
or a court, if the question was presented to it, would agree with
our assessment. We could be subject to judicial or administrative
sanctions for failing to offer or sell digital assets in compliance
with the registration requirements, or for acting as a broker or
dealer without appropriate registration. Such an action could
result in injunctions, cease and desist orders, as well as civil
monetary penalties, fines, and disgorgement, criminal liability,
and reputational harm. For instance, all transactions in such
supported digital asset would have to be registered with the SEC,
or conducted in accordance with an exemption from registration,
which could severely limit its liquidity, usability and
transactability. Further, it could draw negative publicity and a
decline in the general acceptance of the digital asset. Also, it
may make it difficult for such digital asset to be traded, cleared,
and custodied as compared to other digital assets that are not
considered to be securities. Due to regulatory challenges, we plan
to discontinue the Mano game and the alSpace platform on or before
the end of December 31, 2022. We plan to explore other
crypto-related business models outside of the United States.
The NFT gaming industry is new and developing and there is no
assurance that our games currently under development will be
accepted by players.
The development of the NFT game industry is new and continues to
rapidly evolve. We developed a “Play-to-Earn” model that allows
players to earn rewards through NFT while they play the Mano game
on our “alSpace” platform. Our first NFT game was released on March
25, 2022. However, no assurance can be made that Mano will generate
enough interest in order for the game to be successful or for
players to utilize their Mano NFTs. In addition, due to regulatory
challenges, we plan to discontinue the Mano game and the alSpace
platform on or before the end of December 31, 2022. We plan to
explore other crypto-related business models outside of the United
States.
We plan to explore other opportunities in the metaverse and
crypto-related business to expand our business model.
Due to regulatory challenges, we have decided to discontinue the
Mano game and the alSpace platform on or before the end of December
31, 2022. Therefore, we plan need to explore and develop other
opportunities in the metaverse and crypto-related business in order
to expand our business model. However, we may not be successful in
identifying a new metaverse and crypto-related business model that
is acceptable to us, which will adversely affect our business
objective.
Our business will be intensely competitive. We may not deliver
successful and engaging game, or players and consumers may prefer
our competitors’ products over our own.
Although the development of the NFT gaming industry is new, we
anticipate that competition in our business will be intense. Many
new products will be introduced, but we anticipate that only a
relatively small number of products will drive significant
engagement and account for a significant portion of total revenue.
It is anticipated that our competitors will range from mature
well-funded companies to emerging start-ups. If we do not develop
consistent high-quality, well-received and engaging products that
are of interest to players, the lack of interest will adversely
affect our business objectives.
There can be no assurance that the market for NFTs will be
developed and/or sustained, which may materially adversely affect
the value of NFTs.
The market for digital assets, including, without limitation, NFTs,
whether related to in-game assets or otherwise, is still nascent.
Accordingly, the market for NFTs may not develop, or if a market
does develop, such value be maintained. If a market does not
develop for the NFTs, it may be difficult or impossible for us to
maintain a marketplace where players and users can trade and
eventually sell their NFTs. Failure to develop a marketplace
for our NFTs will adversely affect our business objectives.
The technology underlying blockchain technology is subject to a
number of industry-wide challenges and risks relating to consumer
acceptance of blockchain technology. The slowing or stopping of the
development or acceptance of blockchain networks and blockchain
assets would have a material adverse effect on the successful
adoption of the NFTs.
The growth of the blockchain industry is subject to a high degree
of uncertainty regarding consumer adoption and long-term
development. The factors affecting the further development of the
blockchain and NFT industry include, without limitation:
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worldwide
growth in the adoption and use of NFTs and other blockchain
technologies; |
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government
and quasi-government regulation of NFTs and their use, or
restrictions on or regulation of access to and operation of
blockchain networks or similar systems; |
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the
maintenance and development of the open-source software protocol of
blockchain networks; |
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changes
in consumer demographics and public tastes and
preferences; |
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the
availability and popularity of other forms or methods of buying and
selling goods and services, or trading assets, including new means
of using government-backed currencies or existing
networks; |
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the
extent to which current interest in NFTs represents a speculative
“bubble”; |
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general
economic conditions in the United States and the world; |
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the
regulatory environment relating to NFTs and blockchains;
and |
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a
decline in the popularity or acceptance of NFTs or other digital
assets. |
The NFT industry as a whole has been characterized by rapid changes
and innovations and is constantly evolving. Although it has
experienced significant growth in recent years, the slowing or
stopping of the development, general acceptance and adoption and
usage of blockchain networks and blockchain assets may deter or
delay the acceptance and adoption of NFTs.
The slowing or stopping of the development, general acceptance and
adoption and usage of blockchain networks or blockchain assets may
adversely impact the value of NFTs. The value of specific NFTs
relies on the development, general acceptance and adoption and
usage of the applicable blockchain network which depends on ability
to readily access the applicable network.
The prices of digital assets are extremely volatile, and such
volatility may have a material adverse effect on the value of
alSpace platform NFTs.
Decreases in the price of even a single other digital asset may
cause volatility in the entire digital asset industry and may
affect the value of other digital assets, including any alSpace
platform NFTs. For example, a security breach or any other
incident or set of circumstances that affects purchaser or user
confidence in a well-known digital asset may affect the industry as
a whole and may also cause the price of other digital assets,
including NFTs, to fluctuate.
The value of in-game asset NFTs relies in part on the
development, general acceptance and adoption and usage of
blockchain assets, rather than solely on the in-game asset
itself.
In-game asset NFTs are a means to establish proof of ownership of
in-game assets through cryptographic key pairs, the public key of
the creator(s) who created the in-game asset and the private key of
the holder representing a verified instance (whether unique or part
of a series) of that in-game asset. The purchase of an
in-game asset NFT gives the holder the right to hold, transfer
and/or sell the NFT. The NFT does not itself include any physical
manifestation of the in-game asset. The value of in-game asset NFTs
is derived from the cryptographic record of ownership, rather than
solely on the in-game asset itself (alBots and other in-game
items); an in-game asset originated as an NFT (i.e., the actual
file or files constituting the in-game asset of which ownership is
represented by an NFT) may have no value absent the NFT, depending
on what other rights were conveyed with the NFT, for example a
copyright interest that could be transferred separate from the NFT.
Thus, the value of the in-game asset NFT relies in part on the
continued development, acceptance, adoption and usage of the
applicable blockchain.
Expansion of our operations into new products, services and
technologies, including content categories, is inherently risky and
may subject us to additional business, legal, financial and
competitive risks.
Historically, our operations have been focused on third-party
management service contracts for aircraft operations. Further
expansion of our operations and our marketplace into additional
products and services, such as NFTs and crypto-related businesses
involve numerous risks and challenges, including potential new
competition, increased capital requirements and increased marketing
spent to achieve customer awareness of these new products and
services. Growth into additional content, product and service areas
may require changes to our existing business model and cost
structure and modifications to our infrastructure and may expose us
to new regulatory and legal risks, any of which may require
expertise in areas in which we have little or no experience. There
is no guarantee that we will be able to generate sufficient revenue
from sales of such products and services to offset the costs of
developing, acquiring, managing and monetizing such products and
services and our business may be adversely affected.
If we cannot continue to innovate technologically or develop,
market and sell new products and services, or enhance existing
technology and products and services to meet customer requirements,
our ability to grow our revenue could be impaired.
Our growth largely depends on our ability to innovate and add value
to our existing creative platform and to provide our customers and
contributors with a scalable, high-performing technology
infrastructure that can efficiently and reliably handle increased
customer and contributor usage globally, as well as the deployment
of new features. For example, NFTs require additional capital and
resources. Without improvements to our technology and
infrastructure, our operations might suffer from unanticipated
system disruptions, slow performance or unreliable service levels,
any of which could negatively affect our reputation and ability to
attract and retain customers and contributors. We are currently
making, and plan to continue making, significant investments to
maintain and enhance the technology and infrastructure and to
evolve our information processes and computer systems in order to
run our business more efficiently and remain competitive. We may
not achieve the anticipated benefits, significant growth or
increased market share from these investments for
several years, if at all. If we are unable to manage our
investments successfully or in a cost-efficient manner, our
business and results of operations may be adversely affected.
The value of NFT is uncertain and may subject us to
unforeseeable risks.
We create and support NFTs. NFTs are unique, one-of-a-kind digital
assets made possible by certain digital asset network protocols.
Because of their non-fungible nature, NFTs introduce digital
scarcity and have become popular as online “collectibles,” similar
to physical rare collectible items, such as trading cards or art.
Like real world collectibles, the value of NFTs may be prone to
“boom and bust” cycles as popularity increases and subsequently
subsides. If any of these bust cycles were to occur, it could
adversely affect the value of certain of our future strategies. In
addition, because NFTs generally rely on the same types of
underlying technologies as digital assets, most risks applicable to
digital assets are also applicable to NFTs and hence our creation
of NFTs will be subject to general digital assets risks as
described elsewhere in these risk factors.
A particular digital asset’s status as a “security” in any
relevant jurisdiction is subject to a high degree of uncertainty
and depending upon the activities undertaken by our customers
utilizing our products and services, we and our customers may be
subject to regulatory scrutiny, investigations, fines, and other
penalties, which may adversely affect our business, operating
results, and financial condition.
The SEC and its staff have taken the position that certain digital
assets fall within the definition of a “security” under the U.S.
federal securities laws. The legal test for determining whether any
given digital asset is a security is a highly complex, fact-driven
analysis that evolves over time, and the outcome is difficult to
predict. The SEC generally does not provide advance guidance or
confirmation on the status of any particular asset as a security.
Furthermore, the SEC’s views in this area have evolved over time
and it is difficult to predict the direction or timing of any
continuing evolution. With respect to various digital assets, there
is currently no certainty under the applicable legal test that such
assets are not securities, notwithstanding the conclusions we may
draw based on our risk-based assessment regarding the likelihood
that a particular asset could be deemed a “security” under
applicable laws.
The classification of a digital asset as a security under
applicable law has wide-ranging implications for the regulatory
obligations that flow from the offer, sale and trading of such
assets. For example, a digital asset that is a security in the
United States may generally only be offered or sold in the United
States pursuant to a registration statement filed with the SEC or
in an offering that qualifies for an exemption from registration.
Persons that effect transactions in assets that are securities in
the United States may be subject to registration with the SEC as a
“broker” or “dealer.” Platforms that bring together purchasers and
sellers to trade digital assets that are securities in the United
States are generally subject to registration as national securities
exchanges, or must qualify for an exemption, such as by being
operated by a registered broker-dealer as an alternative trading
system, or ATS, in compliance with rules for ATSs. Persons
facilitating clearing and settlement of securities may be subject
to registration with the SEC as a clearing agency. Foreign
jurisdictions may have similar licensing, registration, and
qualification requirements.
If the SEC, foreign regulatory authority, or a court were to
determine that a supported digital asset offered, sold, or traded
by one of our customers on a platform provided by us is a security,
our customer would not be able to offer such asset for trading
until it was able to do so in a compliant manner, which would
require significant expenditures by the customer. In addition, we
or our customer could be subject to judicial or administrative
sanctions for failing to offer or sell the digital asset in
compliance with the registration requirements, or for acting as a
broker, dealer, or national securities exchange without appropriate
registration. Such an action could result in injunctions, cease and
desist orders, as well as civil monetary penalties, fines,
disgorgement, criminal liability, and reputational harm which could
negatively impact our business, operating results, and financial
condition.
Risks Related to our Company
Our filing of bankruptcy may adversely affect our business and
relationships.
On August 31, 2021, the Bankruptcy Court entered its Findings of
Fact, Conclusions of Law and Order Approving and Confirming the
Combined Disclosure Statement and Joint Chapter 11 Plan of
AeroCentury Corp. (now known as Mega Matrix Corp.), and its
Affiliated Debtors. The Effective Date of the Plan occurred on
September 30, 2021. Each condition precedent to consummation of the
Plan has been satisfied and/or waived.
As a result of our bankruptcy filing:
|
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suppliers,
vendors or other contract counterparties may require additional
financial assurances or enhanced performance from us; |
|
● |
our
ability to compete for new business may be adversely
affected; |
|
● |
our
ability to attract, motivate and retain key executives and
employees may be adversely affected; |
|
● |
our
employees may be distracted from performance of their duties or
more easily attracted to other employment opportunities;
and |
|
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we
may have difficulty obtaining the capital we need to operate and
grow our business. |
The occurrence of one or more of these events could have a material
adverse effect on our business, financial condition, results of
operations and reputation.
Upon our emergence from Chapter 11, the composition of our
stockholder base has changed significantly.
As a result of the concentration of our equity ownership, our
future strategy and plans may differ materially from those in the
past. Upon our anticipated emergence from Chapter 11, the Plan
Sponsors collectively held approximately 65.0% of our common stock,
while holders of our legacy equity interests held approximately
35.0% of our common stock. Therefore, the Plan Sponsors have
significant control on the outcome of matters submitted to a vote
of stockholders, including, but not limited to, electing directors
and approving corporate transactions. As a result, our future
strategy and plans may differ materially from those of the past.
Circumstances may occur in which the interests of the Plan Sponsors
could be in conflict with the interests of other stockholders, and
the Plan Sponsors would have substantial influence to cause us to
take actions that align with their interests. Should conflicts
arise, there can be no assurance that the Plan Sponsors would act
in the best interests of other stockholders or that any conflicts
of interest would be resolved in a manner favorable to our other
stockholders.
The composition of our board of directors has changed
significantly.
Pursuant to the Plan, the composition of our board of directors
changed significantly. Upon our emergence from Chapter 11, our
board of directors consisted of five directors, none of whom had
previously served on our board of directors. The new directors have
different backgrounds, experiences and perspectives from those who
previously served on our board of directors and thus may have
different views on the issues that will determine our future. There
can be no assurance that our new board of directors will pursue, or
will pursue in the same manner, our previous strategy and business
plans.
Certain information contained in our historical financial
statements are not comparable to the information contained in our
financial statements after the adoption of fresh start
accounting.
Upon our emergence from Chapter 11, we adopted fresh start
accounting in accordance with ASC Topic 852 and became a new entity
for financial reporting purposes. As a result, we revalued our
assets and liabilities based on our estimate of our enterprise
value and the fair value of each of our assets and liabilities.
These estimates, projections and enterprise valuation were prepared
solely for the purpose of the bankruptcy proceedings and should not
be relied upon by investors for any other purpose. At the time they
were prepared, the determination of these values reflected numerous
estimates and assumptions, and the fair values recorded based on
these estimates may not be fully realized in periods subsequent to
our emergence from Chapter 11.
The consolidated financial statements after our emergence from
bankruptcy will not be comparable to the consolidated financial
statements on or before that date. This will make it difficult for
stockholders to assess our performance in relation to prior
periods.
We have a limited operating history in our post-bankruptcy new
focus business, so there is a limited track record on which to
judge our business prospects and management.
We have limited operating history in NFT gaming, NFT and metaverse
upon which to base an evaluation of our business and prospects. You
must consider the risks and difficulties we face as a small
operating company with limited operating history. Further, our
additional game development for metaverse games is a new venture,
to which we have no experience and will rely upon our third party
developers to develop such a game.
We may need to raise additional capital by issuing additional
securities which could hurt the market for our securities or be on
terms more favorable than those of our current
shareholders.
We will need to, or desire to, raise substantial additional capital
in the future if this funding is not fully carried out. Our future
capital requirements will depend on the costs of establishing or
acquiring sales, marketing, and distribution capabilities for our
services inducing sales of AlBots, the gaming portion of the
company, and operations and other potential unforeseen
circumstances.
Our business depends on the continuing efforts of our
management. If it loses their services, our business may be
severely disrupted.
Our business operations depend on the efforts of our new
management, particularly the executive officers named in this
document. If one or more of our management were unable or unwilling
to continue their employment with us, it might not be able to
replace them in a timely manner, or at all. We may incur additional
expenses to recruit and retain qualified replacements. Our business
may be severely disrupted, and our financial condition and results
of operations may be materially and adversely affected. In
addition, our management may join a competitor or form a competing
company. As a result, our business may be negatively affected due
to the loss of one or more members of our management.
We may not be able to prevent or timely detect cyber security
breaches and may be subject to data, security and/or system
breaches which could adversely affect our business operations and
financial conditions.
We rely on information technology networks and systems, including
the use of third-party communications systems over the Internet, to
process, transmit and store electronic information, and to manage
or support our business activities. These information technology
networks and systems may be subject to security breaches, hacking,
phishing, or spoofing attempts by others to gain unauthorized
access to our business information and financial accounts. A
cyberattack, unauthorized intrusion, or theft of personal,
financial or sensitive business information could have a material
adverse effect on our business operations or our clients’
information, and could harm our operations, reputation and
financial situation. In addition, due to an increase in the types
of cyberattacks, our employees could be victim to such scams
designed to trick victims into transferring sensitive company data
or funds, that could compromise and/or disrupt our business
operations.
We were a victim of a business email compromise scam (BEC) in
December 2021. BEC scams involve using social engineering to cause
employees to wire funds to the perpetrators in the mistaken belief
that the requests were made by a company executive or established
vendor. As a result of the BEC scam, we have enhanced BEC awareness
within our organization, established additional controls to help
detect BEC scams when they occur, and require additional
confirmations for large money transactions. In addition, we seek to
detect and investigate all cybersecurity incidents and to prevent
their recurrence, but in some cases, we might be unaware of an
incident or its magnitude, duration, and effects. While we take
every effort to train our employees to be cognizant of these types
of attacks and to take appropriate precautions, and have taken
actions and implemented controls to protect our systems and
information, the level of technological sophistication being used
by attackers has increased in recent years, and may be insufficient
to protect our systems or information. Any successful cyberattack
against us could lead to the loss of significant company funds or
result in in potential liability, including litigation or other
legal actions against us, or the imposition of penalties, which
could cause us to incur significant remedial costs. Further, we
cannot ensure that our efforts and measures taken will be
sufficient to prevent or mitigate any damage caused by a
cybersecurity incident, and our networks and systems may be
vulnerable to security breaches, hacking, phishing, spoofing, BEC,
employee error or manipulation, or other adverse events.
Due to the evolving nature and increased sophistication of these
cybersecurity threats, the potential impact of any future incident
cannot be predicted with certainty; however, any such incidents
could have a material adverse effect on our results of operations
and financial condition, especially if we fail to maintain
sufficient insurance coverage to cover liabilities incurred or are
unable to recover any funds lost in data, security and/or system
breaches, and could result in a material adverse effect on our
business and results of operations.
As of December 31, 2021, our internal control over financial
reporting was ineffective, and if we continue to fail to improve
such controls and procedures, investors could lose confidence in
our financial and other reports, the price of our common stock may
decline, and we may be subject to increased risks and
liabilities.
As a public company, we are subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (“Exchange Act”)
and the Sarbanes-Oxley Act of 2002. The Exchange Act requires,
among other things, that we file annual reports with respect to our
business and financial condition. Section 404 of the Sarbanes-Oxley
Act requires, among other things, that we include a report of our
management on our internal control over financial reporting. We are
also required to include certifications of our management regarding
the effectiveness of our disclosure controls and procedures. We
previously identified a material weakness in our internal control
over financial reporting relating to our tax review control for
complex transactions. We are in the process of enhancing our tax
review control related to unusual transactions that we may
encounter, but that control has not operated for a sufficient time
to determine if the control was effective as of December 31, 2021.
If we cannot effectively maintain our controls and procedures, we
could suffer material misstatements in our financial statements and
other information we report which would likely cause investors to
lose confidence. This lack of confidence could lead to a decline in
the trading price of our common stock.
Compliance with the Sarbanes-Oxley Act of 2002 will require
substantial financial and management resources and may increase the
time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we
evaluate and report on our system of internal controls and may
require us to have such system audited by an independent registered
public accounting firm. If we fail to maintain the adequacy of our
internal controls, we could be subject to regulatory scrutiny,
civil or criminal penalties and/or shareholder litigation. Any
inability to provide reliable financial reports could harm our
business. Furthermore, any failure to implement required new or
improved controls, or difficulties encountered in the
implementation of adequate controls over our financial processes
and reporting in the future, could harm our operating results or
cause us to fail to meet our reporting obligations. Inferior
internal controls could also cause investors to lose confidence in
our reported financial information, which could have a negative
effect on the trading price of our securities.
The trading prices of our common stock could be volatile, which
could result in substantial losses to our shareholders and
investors.
The trading prices of our common stock could be volatile and could
fluctuate widely due to factors beyond our control. This may happen
because of broad market and industry factors, like the performance
and fluctuation in the market prices or the underperformance or
deteriorating financial results of other similarly situated
companies that have listed their securities in the U.S. in recent
years. The securities of some of these companies have experienced
significant volatility including, in some cases, substantial price
declines in the trading prices of their securities. In addition,
securities markets may from time to time experience significant
price and volume fluctuations that are not related to our operating
performance, such as the large decline in share prices in the
United States and other jurisdictions.
In addition to market and industry factors, the price and trading
volume for our common stock may be highly volatile for factors
specific to our own operations including the following:
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● |
variations
in our revenues, earnings and cash flow; |
|
● |
announcements
of new product and service offerings, investments, acquisitions,
strategic partnerships, joint ventures, or capital commitments by
us or our competitors; |
|
● |
changes
in the performance or market valuation of our company or our
competitors; |
|
● |
changes
in financial estimates by securities analysts; |
|
● |
changes
in the number of our users and customers; |
|
● |
fluctuations
in our operating metrics; |
|
● |
failures
on our part to realize monetization opportunities as
expected; |
|
● |
additions
or departures of our key management and personnel; |
|
● |
detrimental
negative publicity about us, our competitors or our
industry; |
|
● |
market
conditions or regulatory developments affecting us or our industry;
and |
|
● |
potential
litigations or regulatory investigations. |
Any of these factors may result in large and sudden changes in the
trading volume and the price at which our common stock will trade.
In the past, shareholders of a public company often brought
securities class action suits against the listed company following
periods of instability in the market price of that company’s
securities. If we were involved in a class action suit, it could
divert a significant amount of our management’s attention and other
resources from our business and operations, which could harm our
results of operations and require us to incur significant expenses
to defend the suit. Any such class action suit, whether or not
successful, could harm our reputation and restrict our ability to
raise capital in the future. In addition, if a claim is
successfully made against us, we may be required to pay significant
damages, which could have a material adverse effect on our
financial condition and results of operations.
If our common stock becomes subject to the SEC’s penny stock
rules, broker-dealers may experience difficulty in completing
customer transactions, and trading activity in our securities may
be adversely affected.
If at any time we have net tangible assets of $5,000,001 or less
and our common stock has a market price per share of less than
$5.00, transactions in our common stock may be subject to the
“penny stock” rules promulgated under the Exchange Act. Under these
rules, broker-dealers who recommend such securities to persons
other than institutional accredited investors must:
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● |
make
a special written suitability determination for the
purchaser; |
|
● |
receive
the purchaser’s written agreement to the transaction prior to
sale; |
|
● |
provide
the purchaser with risk disclosure documents which identify certain
risks associated with investing in “penny stocks” and which
describe the market for these “penny stocks” as well as a
purchaser’s legal remedies; and |
|
● |
obtain
a signed and dated acknowledgment from the purchaser demonstrating
that the purchaser has actually received the required risk
disclosure document before a transaction in a “penny stock” can be
completed. |
If our common stock becomes subject to these rules, broker-dealers
may find it difficult to effectuate customer transactions and
trading activity in our securities may be adversely affected. As a
result, the market price of our common stock may be depressed, and
you may find it more difficult to sell our common stock.
An active trading market for our common stock may not develop,
and you may not be able to easily sell your common stock.
An active trading market for shares of our common stock following
our emergence from bankruptcy may never develop or be sustained. If
an active trading market does not develop, you may have difficulty
selling your shares of common stock or at all. An inactive market
may also impair our ability to raise capital by selling our common
stock, and it may impair our ability to attract and motivate our
employees through equity incentive awards and our ability to
acquire other companies by using our common stock as
consideration.
If we do not continue to satisfy the NYSE American continued
listing requirements, our common stock could be delisted.
The listing of our common stock on NYSE American is contingent on
our compliance with the NYSE American’s conditions for continued
listing.
On September 11, 2020, we received a deficiency letter from NYSE
American notifying us of our non-compliance with NYSE American’s
stockholders’ equity listing standards as set forth in Section
1003(a)(i) - (iii) of the NYSE American Company Guide.
Subsequently, we submitted a plan to the NYSE American to bring us
into compliance with such listing standards within 18 months of
receipt of the deficiency letter. On November 25, 2020, we received
a letter from the NYSE American notifying us of its acceptance of
our plan and our continuing listing pursuant to an extension with a
target completion date of March 11, 2022.
As a result of management’s efforts, on March 11, 2022, the NYSE
American informed the Company that it has regained compliance with
all of the NYSE American continued listing standards set forth in
Part 10 of the Company Guide.
Should we fail to meet the NYSE American’s continuing listing
requirements, we may be subject to delisting by the NYSE America.
In the event our common stock is no longer listed for trading on
the NYSE American, our trading volume and share price may decrease
and we may experience difficulties in raising capital which could
materially affect our operations and financial results. Further,
delisting from the NYSE American could also have other negative
effects, including potential loss of confidence by partners,
lenders, suppliers and employees. Finally, delisting could make it
harder for us to raise capital and sell securities.
Sales of a significant number of our common stock in the public
market, or the perception that such sales could occur, could
depress the market price of our common stock.
In connection with a private placement of 2,870,927 (14,354,635
post-split) shares of common stock that closed on September 30,
2021, we have filed a registration statement allowing the holder
thereof to resell the common stock. The sales of those shares of
common stock in the public market could depress the market price of
our common stock and impair our ability to raise capital through
the sale of additional equity securities. We cannot predict the
effect that future sales of our common stock would have on the
market price of our common stock.
PRIVATE PLACEMENT OF
SECURITIES
On September 30, 2021, we entered and consummated the transactions
contemplated by a Securities Purchase Agreement with nine investors
pursuant to which we issued and sold 2,870,927 (14,345,635
post-split) shares of common stock, par value $0.001 per share at
$3.85 for each share of common stock, for an aggregate purchase
price of approximately $11,053,069.
WHERE YOU CAN FIND
ADDITIONAL INFORMATION
We are required to file annual, quarterly and special reports,
proxy statements and other information with the SEC. The SEC
maintains an Internet web site at http://www.sec.gov. that contains
reports, proxy and information statements, and other information
that we file electronically with the SEC.
We have filed a registration statement, of which this prospectus is
a part, covering the securities offered hereby. As allowed by SEC
rules, this prospectus does not include all of the information
contained in the registration statement and the included exhibits,
financial statements and schedules. You are referred to the
registration statement, the included exhibits, financial statements
and schedules for further information. This prospectus is qualified
in its entirety by such other information.
We are subject to the information and periodic reporting
requirements of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, and, in accordance therewith, file periodic
reports, proxy statements and other information with the SEC. Such
periodic reports, proxy statements and other information are
available to the public over the Internet at the website of the SEC
referred to above. We maintain a website at
http://www.mtmtgroup.com The reference to our website address does
not constitute incorporation by reference of the information
contained on our website, and you should not consider the contents
of our website in making an investment decision with respect to our
common stock.
INCORPORATION OF
INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” the information we
file with it, which means that we can disclose important
information to you by referring you to those documents. The
information we incorporate by reference is an important part of
this prospectus, and certain information that we will later file
with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed
below, as well as any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act from the
date of the initial registration statement and prior to the
effectiveness of this registration statement, and any filings made
after the date of this prospectus until we sell all of the
securities under this prospectus, except that we do not incorporate
any document or portion of a document that was furnished and deemed
by the rules of the SEC not to have been filed.
| |
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Our
annual report on
Form
10-K for
the fiscal year ended December 31, 2021, filed with the SEC on
March 30, 2022; |
| |
● |
Our
quarterly report on Form 10-Q for the quarterly period ended
March
31, 2022,
filed with the SEC on May 16, 2022 and for the quarterly period
ended
June
30, 2022,
filed with the SEC on August 22, 2022; and |
Additionally, all reports and other documents subsequently filed by
us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, except as to any portion of any report or document that is not
deemed filed under such provisions, (i) after the effective date
the registration statement containing this prospectus and (ii)
until the earlier of the date on which all the securities
registered hereunder have been sold or the registration statement
of which this prospectus is a part has been withdrawn, shall be
deemed to be incorporated by reference in this prospectus and to be
part hereof from the date of filing of such reports and other
documents. Any information that we subsequently file with the SEC
that is incorporated by reference as described above will
automatically update and supersede any previous information that is
part of this prospectus. Nothing in this prospectus shall be deemed
to incorporate information furnished but not filed with the SEC
pursuant to Items 2.02, 7.02 or 9.01 of Form 8-K.
Upon written or oral request, we will provide without charge to
each person to whom a copy of the prospectus is delivered a copy of
the documents incorporated by reference herein (other than exhibits
to such documents, unless such exhibits are specifically
incorporated by reference herein). You may request a copy of these
filings, at no cost, by writing or telephoning us at the following
address: 3000 El Camino Real, Bldg. 4, Suite 200, Palo Alto, CA;
Attention: carol.wang@mtmtgroup.com; telephone (650) 340-1888.
SELLING
STOCKHOLDER
This prospectus covers the possible resale by the selling
stockholder identified in the table below of 2,397,305 shares of
common stock. The selling stockholder may sell some, all or none of
their shares of common stock. We do not know how long the selling
stockholder will hold the shares of common stock before selling
them, and we currently have no agreements, arrangements or
understandings with the selling stockholder regarding the sale of
any of the shares.
The following table presents information regarding the selling
stockholder and the shares that he may offer and sell from time to
time under this prospectus. The table is prepared based on
information supplied to us by the selling stockholder relating to
such shares, including (i) all of the shares offered hereby, and
(ii) to our knowledge, all other securities held by the selling
stockholder as of the date hereof, and reflects his respective
holdings as of September 26, 2022. Beneficial ownership is
determined in accordance with Section 13(d) of the Exchange Act and
Rule 13d-3 thereunder. The percentage of shares beneficially owned
prior to the offering is based on 22,084,055 shares of our common
stock actually outstanding as of September 26, 2022.
| |
|
Shares
Beneficially
Owned
Before
|
|
|
Shares
to
be Sold
in this |
|
|
Shares Beneficially
Owned After Offering |
|
|
Name of Selling Stockholder |
|
this Offering |
|
|
Offering |
|
|
Number |
|
|
Percentage |
|
Yucheng Hu *
Group 7,Yantai Village, Liaoye Town,
Yingshan, Sichuan, China 637700 |
|
|
7,991,005 |
|
|
|
2,397,305 |
|
|
|
5,593,700 |
|
|
|
25.3 |
% |
|
* |
Mr Hu
is our Chairman of the Board, Chief Executive Officer and
President. |
DESCRIPTION OF OUR
CAPITAL STOCK
The selling stockholder may, from time to time, sell, transfer, or
otherwise dispose of any or all of their shares of common stock or
interests in shares of common stock on any stock exchange, market,
or trading facility on which the shares are traded or in private
transactions at fixed prices, at prevailing market prices at the
time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated
prices. This prospectus provides you with a general description of
the common stock the selling stockholder may offer.
The description below of our capital stock and provisions of our
second amended and restated certificate of incorporation, as
amended, and third amended and restated bylaws are summaries and
are qualified by reference to the second amended and restated
certificate of incorporation, as amended, and the third amended and
restated bylaws. These documents are filed as exhibits to the
registration statement of which this prospectus is a part.
The total number of shares of all classes of capital stock which we
have authority to issue is 42,000,000 shares of capital stock,
consisting of (i) 40,000,000 shares of common stock, par value
$0.001 per share, and (ii) 2,000,000 shares of preferred stock, par
value $0.001 per share. As of September 26, 2022, there were no
outstanding shares of preferred stock and 22,084,055 outstanding
shares of common stock.
Common Stock
Holders of our common stock are entitled to one vote per share for
each share held of record on all matters submitted to a vote of
stockholders and do not have cumulative voting rights. Our second
amended and restated certificate of incorporation, as amended, does
not provide for cumulative voting. Subject to preferences that may
be applicable to any outstanding preferred stock, the holders of
our common stock are entitled to receive ratably such dividends, if
any, as may be declared by our board of directors out of legally
available funds. Upon liquidation, dissolution or winding-up, the
holders of our common stock are entitled to share ratably in all of
our assets which are legally available for distribution, after
payment of or provision for all liabilities and the liquidation
preference of any outstanding preferred stock. The holders of our
common stock have no preemptive, subscription, redemption or
conversion rights. Our common stock is currently listed on the NYSE
American under the symbol “MTMT.”
Preferred Stock
The board of directors has the authority, without further action by
the stockholders, to issue up to 2,000,000 shares of preferred
stock, $0.001 par value per share, in one or more series. The board
of directors will also have the authority to designate the rights,
preferences, privileges and restrictions of each such series,
including dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption, redemption prices, liquidation
preferences, and the number of shares constituting any series.
The issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of the company without
further action by the stockholders. The issuance of preferred stock
with voting and conversion rights may also adversely affect the
voting power of the holders of common stock. In certain
circumstances, an issuance of preferred stock could have the effect
of decreasing the market price of the common stock.
Anti-Takeover Effects of Provisions of our Second Amended and
Restated Certificate of Incorporation and Third Amended and
Restated Bylaws
Our second amended and restated certificate of incorporation, as
amended, and our third amended and restated bylaws contain certain
provisions that could have the effect of delaying, deterring or
preventing another party from acquiring control of us. These
provisions and certain provisions of Delaware law, which are
summarized below, are expected to discourage coercive takeover
practices and inadequate takeover bids. These provisions are also
designed, in part, to encourage persons seeking to acquire control
of us to negotiate first with our board of directors. We believe
that the benefits of increased protection of our potential ability
to negotiate more favorable terms with an unfriendly or unsolicited
acquirer outweigh the disadvantages of discouraging a proposal to
acquire us.
Undesignated Preferred Stock
As discussed above, our board of directors will have the ability to
issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to change control of
us. These and other provisions may have the effect of deterring
hostile takeovers or delaying changes in control or management of
our company.
Limits on Ability of Stockholders to Call a Special Meeting
Our third amended and restated bylaws provide that special meetings
of the stockholders may be called only by the majority of our board
of directors or by stockholders owning at least 25% of our
outstanding common stock, which may delay the ability of our
stockholders to force consideration of a proposal.
Requirements for Advance Notification of Stockholder Nominations
and Proposals
Our third amended and restated bylaws require advance notice
procedures with respect to stockholder proposals and the nomination
of candidates for election as directors, other than nominations
made by or at the direction of our board of directors or a
committee of our board of directors. These provisions may have the
effect of precluding the conduct of certain business at a meeting
if the proper procedures are not followed. These provisions may
also discourage or deter a potential acquirer from conducting a
solicitation of proxies to elect the acquirer’s own slate of
directors or otherwise attempting to obtain control of our
company.
No Cumulative Voting
Our second amended and restated certificate of incorporation, as
amended, and third amended and restated bylaws do not permit
cumulative voting in the election of directors. Cumulative voting
allows a stockholder to vote a portion or all of its shares for one
or more candidates for seats on the board of directors. Without
cumulative voting, a minority stockholder may not be able to gain
as many seats on our board of directors as the stockholder would be
able to gain if cumulative voting were permitted. The absence of
cumulative voting makes it more difficult for a minority
stockholder to gain a seat on our board of directors to influence
our board’s decision regarding a takeover.
Delaware Anti-Takeover Statute
We are subject to the provisions of Section 203 of the Delaware
General Corporate Law, or DGCL, regulating corporate takeovers. In
general, Section 203 prohibits a publicly-held Delaware corporation
from engaging, under certain circumstances, in a business
combination with an interested stockholder for a period of three
years following the date the person became an interested
stockholder unless:
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prior
to the date of the transaction, our board of directors approved
either the business combination or the transaction which resulted
in the stockholder becoming an interested stockholder; |
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upon
completion of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, calculated as
provided under Section 203; or |
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at or
subsequent to the date of the transaction, the business combination
is approved by our board of directors and authorized at an annual
or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least two-thirds of the outstanding
voting stock which is not owned by the interested
stockholder. |
Generally, a business combination includes a merger, asset or stock
sale, or other transaction resulting in a financial benefit to the
interested stockholder. An interested stockholder is a person who,
together with affiliates and associates, owns or, within three
years prior to the determination of interested stockholder status,
did own 15% or more of a corporation’s outstanding voting stock. We
expect the existence of this provision to have an anti-takeover
effect with respect to transactions our board of directors does not
approve in advance. We anticipate that Section 203 may also
discourage attempts that might result in a premium over the market
price for the shares of common stock held by stockholders.
The provisions of Delaware law and the provisions of our second
amended and restated certificate of incorporation, as amended, and
third amended and restated bylaws, as amended upon the completion
of this offering, could have the effect of discouraging others from
attempting hostile takeovers and, as a consequence, they might also
inhibit temporary fluctuations in the market price of our common
stock that often result from actual or rumored hostile takeover
attempts. These provisions might also have the effect of preventing
changes in our management. It is possible that these provisions
could make it more difficult to accomplish transactions that
stockholders might otherwise deem to be in their best
interests.
Forum Selection
Our second amended and restated certificate of incorporation, as
amended, provides that unless we consent in writing to the
selection of an alternative forum, the Court of Chancery of the
State of Delaware is the sole and exclusive forum for:
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any
derivative action or proceeding brought on our behalf; |
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any
action asserting a breach of fiduciary duty owed by any of our
directors, officers or other employees to us or our
stockholders; |
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any
action asserting a claim against us arising pursuant to any
provisions of the DGCL, our second amended and restated certificate
of incorporation, as amended, or our third amended and restated
bylaws; or |
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any
action asserting a claim against us that is governed by the
internal affairs doctrine. |
These exclusive-forum provisions may limit a stockholder’s ability
to bring a claim in a judicial forum that it finds favorable for
disputes with us or our directors, officers or other employees,
which may discourage lawsuits against us and our directors,
officers and other employees. Furthermore, the enforceability of
similar choice of forum provisions in other companies’ charter
documents has been challenged in legal proceedings, and it is
possible that a court could find these types of provisions to be
inapplicable or unenforceable. If a court were to find either
exclusive-forum provision in our second amended and restated
certificate of incorporation, as amended, to be inapplicable or
unenforceable in an action, we may incur additional costs
associated with resolving the dispute in other jurisdictions, which
could harm our business.
These exclusive-forum provisions are not intended to apply to any
causes of action arising under the Securities Act or the Exchange
Act or any other claim for which the federal courts have exclusive
jurisdiction.
Listing
Our common stock is listed on the NYSE American under the symbol
“MTMT”.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is
Continental Stock, 1 State Street 30th Floor, New York, NY
10004-1561.
USE OF PROCEEDS
We are registering shares of our common stock for the selling
stockholder. We will not receive any of the proceeds from any sale
or other disposition of the common stock covered by this
prospectus. All proceeds from the sale of the common stock will be
paid directly to the selling stockholder.
PLAN OF
DISTRIBUTION
The selling stockholder, including his transferees, donees,
pledgees, assignees and successors-in-interest, may, from time to
time, sell, transfer or otherwise dispose of any or all of the
shares of common stock offered by this prospectus from time to time
on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These dispositions
may be at fixed prices, at market prices prevailing at the time of
sale, at prices related to prevailing market price, at varying
prices determined at the time of sale or at negotiated prices. The
selling stockholder may use any one or more of the following
methods when selling shares:
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers; |
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block
trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as
principal to facilitate the transaction; |
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purchases
by a broker-dealer as principal and resale by the broker-dealer for
its account; |
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an
exchange distribution in accordance with the rules of the
applicable exchange; |
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privately
negotiated transactions; |
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broker-dealers
may agree with a selling stockholder to sell a specified number of
such shares at a stipulated price per share; |
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a
combination of any such methods of sale; |
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through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; and |
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any
other method permitted pursuant to applicable law. |
The selling stockholder may also sell shares under Rule 144 under
the Securities Act, if available, rather than under this
prospectus.
Broker-dealers engaged by the selling stockholder may arrange for
other brokers-dealers to participate in sales. Broker-dealers may
receive commissions or discounts from the selling stockholder or,
if any broker-dealer acts as agent for the purchaser of shares,
from the purchaser in amounts to be negotiated. The selling
stockholder do not expect these commissions and discounts relating
to its sales of shares to exceed what is customary in the types of
transactions involved.
The selling stockholder may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the common stock in the course of hedging
the positions they assume. The selling stockholder may also sell
shares of our common stock short and deliver these securities to
close out its short positions, or loan or pledge the common stock
to broker-dealers that in turn may sell these securities. The
selling stockholder may also enter into option or other
transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer
or other financial institution may resell pursuant to this
prospectus, as supplemented or amended to reflect such
transaction.
The selling stockholder and any broker-dealers or agents that are
involved in selling the shares may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The selling stockholder has
informed us that they do not have any agreement or understanding,
directly or indirectly, with any person to distribute the common
stock.
Because each of the selling stockholder may be deemed to be an
“underwriter” within the meaning of the Securities Act, they will
be subject to the prospectus delivery requirements of the
Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this
prospectus. The selling stockholder has advised us that he has not
entered into any agreements, understandings or arrangements with
any underwriter or broker-dealer regarding the sale of the resale
shares.
The shares will be sold only through registered or licensed brokers
or dealers if required under applicable state securities laws. In
addition, in certain states, the shares may not be sold unless they
have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement
is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not
simultaneously engage in market making activities with respect to
our common stock for a period of two business days prior to the
commencement of the distribution. In addition, the selling
stockholder will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of
shares of our common stock by the selling stockholder or any other
person. We will make copies of this prospectus available to the
selling stockholder and has informed the selling stockholder of the
need to deliver a copy of this prospectus to each purchaser at or
prior to the time of the sale.
We will not receive any proceeds from the sale of the shares by the
selling stockholder.
LEGAL MATTERS
Lewis Brisbois Bisgaard & Smith LLP, San Francisco, CA will
pass upon legal matters in connection with the validity of the
common stock offered hereby.
EXPERTS
The consolidated balance sheets of Mega Matrix Corp. (formerly
known as AeroCentury Corp) and subsidiaries (the Company) as of
December 31, 2021 (Successor Company) and September 30, 2021
(Predecessor Company), and the related consolidated statements of
operations, stockholders' equity (deficit) and other comprehensive
income (loss), and cash flows for the three months ended December
31, 2021 (Successor Company) and the nine months ended September
30, 2021 (Predecessor Company) and the retrospective adjustments
for the effects of the five for one forward stock split to the 2020
consolidated financial statements incorporated by reference in this
prospectus and in the Registration Statement have been so
incorporated in reliance on the report of Audit Alliance LLP, an
independent registered public accounting firm, incorporated herein
by reference, given on the authority of said firm as experts in
auditing and accounting.
The audit report covering the December 31, 2021 consolidated
financial statements contains an explanatory paragraph that states
that the Company filed a petition for reorganization under Chapter
11 of the United States Bankruptcy Code on March 29, 2021. The
Company’s plan of reorganization became effective and the Company
emerged from bankruptcy protection on September 30, 2021. In
connection with its emergence from bankruptcy, the Company adopted
the guidance for fresh start accounting in conformity with FASB ASC
Topic 852, Reorganizations, effective as of September 30, 2021.
Accordingly, the Company’s consolidated financial statements prior
to September 30, 2021 are not comparable to its consolidated
financial statements for period after September 30, 2021.
The consolidated financial statements as of and for the year ended
December 31, 2020 (before the effects of the five for one forward
stock split), incorporated by reference in this prospectus and in
the Registration Statement have been so incorporated in reliance on
the report of BDO USA, LLP, an independent registered public
accounting firm, incorporated herein by reference, given on the
authority of said firm as experts in auditing and accounting. The
report on the consolidated financial statements contains an
explanatory paragraph regarding the Company's ability to continue
as a going concern.
INTERESTS OF NAMED
EXPERTS AND COUNSEL
Except as noted below, no expert or counsel named in this
prospectus as having prepared or certified any part of this
prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in
connection with the registration or offering of the securities was
employed on a contingency basis, or had, or is to receive, in
connection with the offering, a substantial interest, direct or
indirect, in the registrant or any of its parents or subsidiaries.
Nor was any such person connected with the registrant or any of its
parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
20
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