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The Board of Directors of MoviePass' struggling parent company, Helios, and Matheson Analytics Inc. are looking to implement another stock split, according to a report filed Monday with the Securities and Exchange Commission.
Helios shares
HMNY, -29.91%
are currently between 1 and 2 cents.
If it is approved, the plan proposed by the board of directors would be the second grouping of the company's stock and would be at least as dramatic as the first. In July, Helios set up a reverse split system of 1 to 250, which analysts saw as a way for the company to support a declining stock price and avoid being written off. The board now plans to offer a stock split for up to 1 in 500 shares.
The board of directors will present its proposal at a shareholders' meeting on Oct. 18, the company said in the SEC's filing.
The news comes shortly after the departure of one of the company's board members, Carl Schramm, at the end of August. In his letter of resignation, the economist expressed his concerns about the management of the company, stating that management made important decisions for the company without the board being informed or approved. He also stated that, as a board member, he was unable to obtain information on the financial position and operations of Helios.
Lily: MoviePass management has kept its board of directors in the dark, says the outgoing member
The company has had a tumultuous year. In August 2017, it took a majority stake in MoviePass, but despite an initial increase in the number of subscribers, securities filings in the spring and early summer of 2018 showed that Helios was burning at an alarming rate. Its monthly cash deficit has exploded and its price has dropped.
The Company made a series of cash flows, entering into an agreement in June to issue 20,500 preferred shares and $ 164 million in convertible notes. In July, it filed a registration statement to raise $ 1.2 billion over three years by issuing shares and debt.
Also: The spectacular rise and fall of MoviePass
At the end of July, significant service interruptions with MoviePass began to occur due to Helios' inability to make "required payments to its merchants and executing processors," according to a company announcement. In August, when many changes were made to its underwriting plans, Helios announced it had lost millions of dollars in the second quarter. The company closed the quarter with only $ 15.5 million in cash and maintained a continuity warning, suggesting that it may not be able to stay in business for next year with the funds it had available.
Helios shares fell by almost 100% in 2018, despite the stock split of the company. The reference S & P 500
SPX, -0.54%
has gained 8.2% so far this year.
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