The board authorized unanimously authorized a 1-share-for-500 split, which the company argues holds the potential to inflate the stock price, which is trading at 2 cents a share.
The common stock needs to reach $1 a share by Dec. 18, or face removal from the public market.
The last time Helios & Matheson declared a 1-for-250 reverse split, in July, the ticketing service’s share price reached about $22.50. Then, it fell back to earth on the disastrous decision to yank ticketing to certain high-demand films like Mission: Impossible – Fallout amid a cash crunch.
The blackout created a social media storm and led to many obituaries being written for the service, which executives insisted were premature.
The company’s woes deepened as one shareholder filed suit, accusing CEO Ted Farnsworth and CFO Stuart Benson of defrauding shareholders with misleading or withheld information. One of its independent directors, Syracuse University professor Carl Schramm, stepped down, claiming executives had withheld crucial information from the board.
Meanwhile, MoviePass is confronted with new competition from theater chains offering offer consumers their own deals.
Helios & Matheson shareholders will vote Oct. 18 on the latest stock proposal, which the company casts as crucial to its survival.
“If the Company is unable to maintain its Nasdaq listing, its access to capital will become further limited and it may not have sufficient capital to enable MoviePass to continue its operations or become cash flow positive or profitable,” the company said today in a regulatory filing. “Therefore, the Board has concluded that the potential harm to the Company and its stockholders resulting from a Nasdaq delisting outweighs the potential harm to the Company and its stockholders from another significant reverse stock split.”