The board of MoviePass’s troubled parent company Helios and Matheson Analytics Inc. wants to implement another reverse stock split, according to a filing with the Securities and Exchange Commission on Monday.
Shares of Helios HMNY, -27.57% are currently hovering between 1 and 2 cents.
If approved, the board-proposed plan would be the company’s second reverse stock split and will be at least as dramatic as the first. Helios implemented a 1-to-250 reverse split in July, which analysts viewed as a means for the company to buttress a flagging stock price and avoid being delisted. The board now plans to propose a reverse stock split of up to 1-for-500 shares.
The board will put forward its proposal at a meeting of stockholders on Oct. 18, the company said in the SEC filing.
The news comes shortly after the departure of one of the company’s board members, Carl Schramm, in late August. In his resignation letter, the economist discussed his concerns about the way the company was being managed, saying management made important corporate decisions without board knowledge or approval. He also said that, as a board member, he was unable to obtain information about Helios’s financial status and operations.
Read: MoviePass management kept its board in the dark, departing member says
The company has had a tumultuous year. It acquired a controlling stake in MoviePass in August 2017, but, despite an initial surge in subscriber numbers, securities filings in the spring and early summer of 2018 showed Helios was burning through cash at an alarming rate. Its monthly cash deficit ballooned, and its share price plunged.
The company made a series of cash-raising moves, entering an agreement in June to issue 20,500 shares of preferred stock and $164 million in convertible notes. In July, it filed a shelf registration statement to raise $1.2 billion over three years by issuing equity and debt.
Also: The spectacular rise and fall of MoviePass
In late July, significant service interruptions with MoviePass began to occur due to Helios’s inability to make “required payments to its merchant and fulfillment processors,” according to a company announcement. In August, amid a flurry of changes to its subscription plans, Helios reported it had lost millions of dollars in the second quarter. The company ended the quarter with just $15.5 million in cash on hand, and maintained a going-concern warning, suggesting it might not be able to remain in business for the next year with the funds it had.
Shares of Helios have plummeted almost 100% in 2018, despite the company’s reverse stock split. The benchmark S&P 500 SPX, -0.56% has gained 8.2% so far this year.