Medient Studios Inc. (fka MDNT)

[Little_Giant]

I don't really like posting on stock specific message boards, and I'm trying to get away from it. However, I decided to do some digging on the volume increase after becoming interested in MDNT from a technical perspective. Unfortunately, it appears people around here don't like to read SEC filings (who does?), but it's kind of a necessity on the OTC, IMO. Here is what I uncovered:

This whole story begins with Manu Kumaran purchasing 1,083,000 of the 1,404,000 Common Shares from the majority shareholders of Fairway Properties. Thus, making him the majority shareholder with complete voting rights of this security on August 28, 2012. This is outlined in the 8-K here. Verified with the Form 3 here.

His first order of business on August 28, 2012 is to raise the Common Shares A/S from 140 million to 500 million and create 50 million Class A Preferred Shares. This is outlined in the Def-14C here.

In the next 10-Q filing on Nov 19, 2012, we find out that the security name will be changed to Medient Studios, Inc, and Kumaran Holdings, LLC will be reverse merging into the security which is only a shell. Manu Kumaran is the founder and majority shareholder of the private company Kumaran Holdings, LLC. This can be found in the 10-Q here. Also in the 10-Q we find out that on October 24, 2012, the Company issued 429,000 shares of common stock, including 250,000 to new board members for services to be rendered and the 179,000 shares which were in stock to be issued at September 30, 2012. Which is peanuts, so that doesn't really matter.

Now, we get to the big filing. The 8-K or sometimes called a "Super 8-K" outlining the finalization of the reverse merger of Kumaran Holdings, LLC into Medient Studios, Inc is released on Nov 30, 2012 in the filing here. We now find-out that Kumaran Holdings, LLC is purchased in this paragraph: The Company purchased all the membership interests of Kumaran Holding, LLC for a purchase price of thirteen million seventy eight thousand dollars ($13,078,000). This will be paid in the form of ten million (10,000,000) preferred shares and twenty six million (26,000,000) common shares of Medient Studios, Inc. This deal closed on November 26, 2012. What isn't stated here, but is stated elsewhere is that those 26 million Common Shares are Restricted. Since Medient has shell status at this point, they are restricted for 1 year.

If you dig a little deeper into the 8-K, you find the "Voting Rights" section. This is VERY important. Due to this paragraph: The Holders of the Series A Preferred Stock shall be entitled to vote on all matters submitted for a vote to the holders of Common Stock as if they held twenty five shares of Common Stock for each share of Series A Preferred Stock owned by shareholder, and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation.

The next 10-K filed on April 16, 2013 here clearly lays out all the shares that Kumaran issues that make up the O/S:

On October 24, 2012, the Company issued 179,000 restricted shares to members of the former management team as consultant fees.

On October 24, the Company issued 150,000 restricted shares to Mr. Matthew Mellon, and 100,000 restricted shares to Mr. Joseph Giamichael as compensation for directors fees.

On November 26, 2012, the Company issued 23,375,000 restricted common shares and 10,000,000 preferred shares pursuant to the terms of the Kumaran Holding, LLC securities purchase and sales agreement.

On December 4, 2012, the Company issued 3,250,000 common shares to Mr. Pankaj Rajani and assignees in exchange for the conversion of $1,300,000 of liabilities.

On January 9, 2013, and February 6, 2013, the Company issued a total of 2,500,000 common shares to Prime Focus and assignees, in exchange for the conversion of $1,000,000 of liabilities.

On March 19, 2013 the Company issued a total of 2,898,551 of common shares to Circle West in exchange for the conversion of $2,000,000 of liabilities.

On April 11, 2013, the Company issued 2,625,000 shares that were remaining to be issued as per the Kumaran Holding, LLC acquisition agreement.

The A/S as of this filing is 28,458,000.

The A/S as of the next 10-Q on May 20, 2013 hereis 33,856,551. So far, so good. The numbers match exactly with the Jan 9 and March 19 additions. No other new shares are issued.

The A/S as of the next 10-Q on Aug 19, 2013 is now 40,082,011. I couldn't find the reason for the increase in the filing, but as of June 30, 2013, the A/S is still 33,856,551.

The 8-K outlining the $5 million line of credit/share purchase agreement with TCA Global Master Fund is here on Aug 22, 2013. In other words, they are going to give out a ton of shares in the future to them.

The next 10-Q is released on Nov 19, 2013 here, and the A/S is reported as 38,022,329. This includes 4,165,778 shares of Commons that have been administered to I imagine TCA Global Master Fund for the $600K they have already drawn down. The 40 million number in the previous 10-Q is apparently a fantasy number.

An 8-K filing giving Mr. Charles Koppelman 5 million shares on Dec 6, 2013 in the filing here now brings the A/S to around 43,022,329. As far as we know. Some people have said they called the TA and the number is 41.3 million.

If the A/S is currently in the low 40 million range right now, who is dumping all these shares? Well, since the increase in volume also correlates with the 1 year anniversary of the issuing of restricted stock to Kumaran Holdings, LLC, that would be my guess. Why would the majority shareholder drop all of it's Commons? Because they own all the Class A Preferreds with a 25 to 1 vote advantage over the Commons. Kumaran Holdings, LLC can drop all 26 million of their Commons, and still retain complete control over Medient Studios, Inc. Based on the 83 million in volume since their shares became unrestricted in the beginning of December, I would say they are about done.

So, technically the company hasn't further diluted the A/S, but they have drastically increased the float since the beginning of December. There is future concern over the financing agreement with TCA Global Master Fund, but it should be more spread-out than the onslaught that has occurred to the float in the past 5 weeks.

As long as Kumaran Holdings, LLC has finished selling their 26 million Commons, we should be moving up shortly. That kind of selling pressure tends to cause a nice bounce back North when it is completed. If I had to estimate, I would guess the float is around 31 milly right now, as long as the recent A/S numbers reported by the TA are accurate.

As always, this is only my opinion, and could very well be wrong. This is just what makes sense to me. I don't like wasting time arguing, so if someone doesn't like what I wrote, I won't really respond back. Good luck out there.

Litte Giant