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MoviePass’ parent company has boosted its share count by an unbelievable 80,000% since July — but it’s run out of room to issue new stock (HMNY)

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  • Helios & Matheson, which owns MoviePass, has more than doubled its share count in the last month.
  • The massive increase in shares helps to explain why its stock price has plunged — and why it’s seeking to reverse split its stock for a second time in three months.
  • The company’s share count has increased an amazing 80,368% just since its reverse split in July.
  • Thanks to that and its plunging share price, it’s basically run out of room to issue new shares.

The parent company of MoviePass revealed Wednesday that it continues to rely on one of the oldest tricks it’s used to stay in business — issuing new shares of stock.

Unfortunately for Helios & Matheson, that trick has now put it in a tight bind, one that’s forcing it to seek shareholder approval for a second reverse split of its stock just less than two months after going through with a 250-1 reverse swap. Thanks to all the shares it’s issued lately — and the ones it’s agreed to set aside for creditors who hold convertible notes it issued — the company has effectively run out of room to issue or sell new stock.

“We do not have enough authorized, unissued and unreserved shares to fulfill the current reserve requirements under the notes or to meet the company’s needs for future equity financing or acquisitions,” Helios & Matheson said in a document filed with the Securities and Exchange Commission on Wednesday.

Just in the last month, the company, which took a controlling stake in MoviePass last year, has more than doubled its share count. Its total outstanding shares stood at 1.36 billion on September 14, according to the regulatory document. That was up from 636.9 million on August 14.

The company didn’t explain how it managed to increase its share count by 719 million shares over that time period. But it had prior approval from shareholders to raise hundreds of millions of dollars by selling shares on the open market — something it’s done repeatedly over the last year.

Helios & Matheson has massively diluted shareholders

The share increase just over the last month mean that Helios & Matheson’s total share count has increased an unbelievable 80,368% just since its first reverse split in July. Adjusting for that split, the company’s number of outstanding shares has increased by more than 3,800,000% in the last year.

All that dilution has weighed heavily on the company’s shares. In May, Helios & Matheson’s stock fell below $1 a share, the minimum threshold to be listed on the Nasdaq market. After the Nasdaq sent the company a delisting warning, Helios & Matheson officials urged shareholders to approve its first reverse split in an effort to boost its stock price.

That worked, but only temporarily. Less than a week later the company’s stock was trading below $1 again, before plunging even more. In recent weeks, Helios & Matheson’s stock has hovered around 2 cents a share. That means it’s still in danger of being delisted by the Nasdaq, which requires a company’s stock to trade above a $1 a share for at least 10 consecutive trading days to avoid such a sanction.

The company’s stock price has fallen largely in tandem with its issuance of new shares. A month ago, when it had fewer than half as many shares outstanding, its stock was priced at 5 cents a share. Immediately after its reverse split — and before it issued hundreds of millions of new shares — it was trading at more than $20 a share.

The company has to set aside more shares than it’s authorized to issue

In addition to sinking Helios & Matheson’s stock, the issuance of all those new shares has had another consequence. The company has basically run out of room to issue new shares.

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Besides approving the reverse stock split in July, shareholders upped the number of shares that Helios & Matheson could issue to 5 billion shares. Although only 1.36 billion are now outstanding, it has to set aside some 5.3 billion shares for its creditors.

The company issued convertible notes in November, January, and June to fund its operations. Should its creditors decide to do so, they can exchange those notes for shares.

But the November and January notes have a provision in them in which the price at which they can be converted gets reduced to the lowest price at which the company has sold shares on the public market. At the same time, the number of shares that Helios & Matheson would have to issue at that price to the creditors goes up proportionately.

Both of those sets of notes can now be converted at a price of 2 cents a share, the company said in its filing, indicating that the company has sold stock on the open market recently at just that price. The result of the lowering of the conversion price is that Helios & Matheson now has to set aside more shares for those notes than it can issue in total.

Now the company is seeking approval to reverse split its stock again by as much as a 500-to-1 ratio. Such a move could potentially address both problems, by raising its share price above $1 a share and by giving it again extra headroom to cover conversion or issue new stock. The number of shares Helios & Matheson would have to issue to cover the convertible notes would be reduced by the same ratio by which it reduced its total share count.

Of course, if the company’s stock fell again after a second reverse split — due to the issuance of yet more shares or for some other reason — it could soon find itself in the same bind, under threat of delisting and running out of room to issue new shares for its creditors.



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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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