MoviePass Wants Another Reverse Stock Split

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Published: September 17, 2018 3:18 pm

Last Updated: January 11, 2020 5:47 pm

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Stop me if you’ve heard this one before. The board of directors of Helios and Matheson Analytics Inc. (NASDAQ: HMNY), the controlling shareholding in movie subscription service MoviePass, has filed a preliminary proxy statement with the U.S. Securities and Exchange Commission announcing a special shareholders meeting on October 18. The subject of the meeting is a reverse stock split of between 1-for-2 and 1-for-500 shares.

The actual split ratio will be decided by the board after shareholders approve the reverse split.

In what may be the understatement of the year, the proxy statement notes: “The Board believes that a reverse stock split will likely be necessary to regain compliance with Nasdaq’s minimum $1.00 bid price requirement prior to the current deadline of December 18, 2018 …. ”

Earlier this year Helios and Matheson completed a 1-for-250 reverse stock split that propped up the share price for about a week.

Share opened Monday morning at $0.0214 and news of the filing cut the price to $0.0151, a drop of about 30%. Nearly 200 million shares have traded so far today, nearly triple the daily average of around 70 million shares. According to the filing, the company has 1.75 million shares of common stock outstanding.

In addition to the common shares outstanding, Helios and Matheson lists more than 2.6 billion shares of outstanding securities that are convertible into or exercisable for common stock. The vast majority of these are issuable upon conversion of two note issuances. If shareholders agree to the reverse split and the conversion of the outstanding June notes, another 4.2 billion shares of common stock may be issued.

There may be something here that makes sense to someone, but that is probably a group that could fit inside a phone booth–if there were still phone booths.

Here’s where to find the SEC filing. https://www.sec.gov/Archives/edgar/data/1040792/000121390018012584/pre14a0918_heliosandmath.htm

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