As expected, fiscally-challenged Trans World Entertainment Corp. is taking its stock from the Nasdaq Global Market to the Nasdaq Capital Market, effective July 18.
The corporate parent to home entertainment retailer For Your Entertainment (f.y.e.) made the switch to avoid exceeding a 180-day grace period granted by Nasdaq to bring its stock above the minimum $1-per-share threshold.
Trans World, which is affecting a 1-for-20 shares reverse stock split on Aug. 15, now has another 180-period until Jan. 13, 2020 to bring its share price above the $1 minimum valuation.
The reverse stock split is primarily intended to bring TWEC into compliance with the minimum average closing share price requirement for maintaining its listing on the Nasdaq Capital Market. The company’s common stock will continue to trade under the symbol “TWMC”.
The split will reduce the number of shares of outstanding common stock from approximately 36,258,839 million shares to approximately 1,812,941 million shares.
TWEC shares closed July 16 at 28 cents per share. The company has a market capitalization of just $10.3 million.
In another blow to fiscally-challenged theatrical ticket subscription service MoviePass, parent Helios and Matheson Analytics March 12 issued a revised financial statement revealing the service lost millions more than originally reported.
HMNY said its revised third-quarter (ended Sept. 30, 2018) net loss topped $146.6 million — nearly 7% more than a net loss of $137 million originally reported. For nine months of the fiscal year, HMNY lost $256.3 million, 3.8% more than a loss of $246.7 million.
HMNY attributed the error to overstatement of subscription revenue, including $700,000 of revenue from terminated MoviePass subscriptions by Costco; false recognition of about $5.9 million of revenue from certain suspended subscriptions that had not yet been consented to by subscribers.
The company also identified a non-cash error related to the accounting of derivative securities, which resulted in an understatement of net loss of approximately $2.9 million. HMNY said the error underscored a “material weakness” relating to subscription management.
CEO Ted Farnsworth and CFO Stuart Benson said measures have been taken to avoid future accounting issues, including implementation of software upgrades to provide “real-time” information for managing and accounting for subscriptions, including subscriptions that are terminated or in a suspended state.
“Members of the company’s management have discussed the matters with Rosenberg Rich Baker Berman, P.A., [HMNY’s] accounting firm,” Benson wrote in the filing.
HMNY, which had its stock delisted by Nasdaq for failing to meet the $1 minimum share value, has struggled to sustain the MoviePass business model that enabled subscribers daily access to a theatrical screening for $9.95 monthly fee.
With its stock flatlining at a penny per share, Helios & Matheson Analytics — parent of fiscally-challenged theatrical ticket service MoviePass — is expected to delist from Nasdaq.
Bloomberg, citing market data, said HMNY could delist as early as the end of the business day on Feb. 12 — resuming trading as an over-the-counter stock.
HMNY spun-off MoviePass in January in an attempt to jumpstart investor confidence after the pioneering $9.95 monthly over-the-top ticket service resonated with consumers at the expense of a stable business model.
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Successive fiscal quarters generated fiscal losses in the hundreds of millions, compounded by the launch of a competing ticket service from AMC Theatres that resulted in a free-falling HMNY stock.
While MoviePass Films continues to produce low-budget movies, MoviePass took another PR hit when Variety reported that a senior executive recently hired to help turn the service around had been charged in 2010 with stealing thousands of dollars from a previous employer.
Trans World Entertainment Corp., parent of home entertainment retailer f.y.e. (For Your Entertainment), Jan. 17 disclosed it has been put on notice by Nasdaq regarding its stock not meeting the $1 minimum price-per-share valuation for publicly-traded companies.
The retailer, whose stock is trading at 61 cents per share, has until July 15 to elevate the stock price to the minimum amount.
If the company does not regain compliance during the initial period, it may be eligible for additional time to regain compliance. If TWEC is not eligible, its expects that Nasdaq will provide written notice that the company’s common stock will be subject to delisting.
Fiscally-challenged Helios and Matheson Analytics, parent of theatrical ticket subscription service MoviePass, Jan. 16 announced it has entered into definitive agreements with certain institutional investors for the purchase of 333,333,334 common units for gross proceeds of about $5.4 million.
Each unit includes one share of common stock, one warrant to purchase one share of common stock at a price of 1.63 pennies per share, one warrant to purchase another share of common stock at the same price, and one warrant to purchase one share of common stock at $1 per share.
The potential gross proceeds from the warrants, if fully exercised on a cash basis, will be about $344.2 million.
HMNY said it would use the $5.4 million for working capital purposes; to redeem about $1.2 million of an outstanding debt offering; and to pay certain fees due to the placement agent and other transaction expenses.
Indeed, with its stock worth less than 2 cents per share, HMNY is in danger of being delisted by Nasdaq for failing to meet the minimum $1 per share threshold. The trading board has given HMNY until April to meet the minimum.
Trans World Entertainment Corp., parent of mall-based home entertainment retailer f.y.e. (For Your Entertainment), said it has been notified by Nasdaq that its stock is again in compliance with the trading board.
At issue was TWMC’s ability to meet Nasdaq’s minimum $1-per-share stock valuation. Failure to do so can resort to delisting, which can negatively impact a company’s ability to generate funding, among other issues.
On Nov. 16, TWMC said it received written notice from Nasdaq stating that the company’s common stock had a closing bid price of at least $1 per share for 10 consecutive business days (from Nov. 2 to 15).
In a statement, the company said it had regained compliance with Nasdaq Listing Rule 5450(a)(1) and “the matter is now closed.”
TWMC shares closed Nov. 20 at $1.02 per share
Trans World Entertainment Corp. Oct. 12 disclosed it has received formal notice from Nasdaq that its stock has traded below the $1-per-share minimum for the past 30 business days.
The Albany, N.Y.-based distributor, which operates the f.y.e. (For Your Entertainment) home entertainment retail chain, in addition to Etailz.com and related websites, has until April 8, 2019 to bring the stock price in compliance with Nasdaq rules or it will be subjected to delisting.
TWEC reported a loss of $8.1 million in the most recent fiscal period, which was 56% higher than the $5.2 million loss reported in the previous-year period. Revenue dropped nearly 5% to $96.6 million.
Mall-based f.y.e. revenue dropped nearly 17% to $54 million from $65 million during the previous period.
Helios and Matheson Analytics, corporate parent of fiscally challenged theatrical ticket subscription service MoviePass, is looking to authorize a second reverse-stock split.
A proposal for 1-for-500 shares reverse-stock split will be presented to HMNY shareholders at an upcoming special meeting Oct. 18 in New York.
“We believe that a reverse stock split could increase the market price of our common stock sufficient to satisfy the minimum bid price requirement in the near term, though we cannot provide any assurance that a reverse stock split will have that effect,” HMNY said in the proxy statement.
Indeed, HMNY’s 1-for-250 shares reverse-stock split in July was done to raise the company’s stock price above the $1 per share Nasdaq minimum.
While the split briefly resulted in HMNY stock reaching $22.50 per share, in less than five days the stock had again fallen below the $1 minimum. It closed Sept. 17 at 1.7 cents per share.
“As a result, we continue to be out of compliance with the minimum bid price requirement,” HMNY said in the proxy statement.
The company said that failure to maintain its Nasdaq listing could further limit its access to capital, undermining the ability to continue operating MoviePass, become cash flow positive or profitable.
“Therefore, the board has concluded that the potential harm to the [HMNY] and its stockholders resulting from a Nasdaq delisting outweighs the potential harm to the company and its stockholders from another significant reverse stock split,” said HMNY.
Helios and Matheson Analytics CEO Ted Farnsworth claims Wall Street understands the firm’s MoviePass business model enabling subscribers to go to the movies daily for a $9.95 monthly fee.
Investors apparently think otherwise, sending HMNY shares down more than 85% at the market close July 26 – and 48 hours since the company engineered a 1-for-250 shares reverse-stock split to avoid having its stock delisted by Nasdaq.
The company’s market capitalization hovers around $7.4 million, while operating a business that spent $21 million monthly in the most-recent fiscal quarter paying exhibitors face value for every ticket consumed by its more than 3 million subscribers.
At the stock’s present rate of freefall, shares will again fall below the $1 minimum in less than two weeks.
“I think [HMNY] has been roundly ridiculed [by Wall Street] since it bought MoviePass and cut the [subscription] price below cost,” Wedbush Securities media analyst Michael Pachter said in an email.