With its stock trading well below $1 a share, Body Central Corp. is planning a 1-for-10 reverse stock split that would reduce the number of shares outstanding and lift the price of the stock.
The Jacksonville-based retailer has scheduled a special meeting for Sept. 4 at the company’s Southside headquarters to vote on the reverse split.
In a proxy statement filed Thursday with the Securities and Exchange Commission, Body Central said its board of directors approved the plan on July 17 and directed the company to seek shareholder approval.
Shareholders will receive one share of Body Central stock for every 10 shares they currently own. That will reduce the number of outstanding shares from the current 16.59 million to 1.659 million.
Body Central’s stock has been trading at or below $1 since March after the company issued a dire report on its finances. It fell further after the company announced on June 30 that it was voluntarily delisting from the Nasdaq market.
The stock, which now trades on the OTC Pink Marketplace, closed at 56 cents Thursday, so a 1-for-10 split would raise the listing price to $5.60.
Body Central delisted its stock after selling $18 million in notes to a group of investors, which can be converted into common
The company did not get shareholder approval before selling those notes, which is a violation of Nasdaq listing rules.
The proxy statement said if all those notes are converted into common stock, it would raise the number of outstanding shares from 1.659 million after the reverse split to 6.8 million, so investors in the notes would own a large majority of the shares.