ProShares Trust II 8-K, filed Apr 3, 2020
ProShares Trust II (AGQ)
About this 8-K
ProShares Trust II filed this 8-K on April 3, 2020.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 3, 20 20 (
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
Michael L. Sapir
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Michael M. Phillip
c/o Morgan Lewis & Bockius LLP
77 West Wacker Drive
Chicago, Illinois 60601
and
Richard F. Morris
c/o ProShare Capital Management LLC
7501 Wisconsin Avenue
Suite 1000E
Bethesda, Maryland 20814
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 8.01. | Other Events |
On April 3, 2020, ProShare Capital Management LLC, on behalf of ProShares Trust II (the “Trust”) issued a press release announcing reverse share splits (each, a “Reverse Split”) on two of the Trust’s series, specifically ProShares Ultra Bloomberg Crude Oil ETF (NYSE Arca symbol “UCO”) and ProShares Ultra Bloomberg Natural Gas ETF (NYSE Arca symbol “BOIL”). The Reverse Splits will not change the value of a shareholder’s investment.
The Reverse Splits will increase the price per share of each of UCO and BOIL with a proportionate decrease in the number of shares outstanding. Specifically, every 25 pre-Reverse Split shares held by a UCO shareholder will result in the receipt of one post-Reverse Split share, which will be priced 25 times higher than the net asset value of a pre-Reverse Split share. Every 10 pre-Reverse Split shares held by a BOIL shareholder will result in the receipt of one post-Reverse Split share, which will be priced 10 times higher than the net asset value of a pre-Reverse Split share.
For UCO and BOIL shareholders who hold quantities of shares that are not an exact multiple of the Reverse Split ratio (i.e., not a multiple of 25 or 10, respectively), the Reverse Split will result in the creation of a fractional share. Post-Reverse Split fractional shares will be redeemed for cash and sent to the shareholder’s broker of record. This redemption may cause some shareholders to realize gains or losses, which could be a taxable event for those shareholders.
The Sponsor announced the foregoing via a press release dated April 3, 2020. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is hereby incorporated by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
| Exhibit No. |
Description | |||
| 99.1 |
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| 104 |
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | |||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 3, 2020
| ProShares Trust II |
| /s/ Todd B. Johnson |
| Todd B. Johnson Principal Executive Officer |
Exhibit 99.1
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FOR IMMEDIATE RELEASE |
ProShares Announces ETF Share Splits
BETHESDA, MD – April 3, 2020 – ProShares, a premier provider of ETFs, announced today reverse share splits on six of its ETFs. The splits will not change the total value of a shareholder’s investment.
Reverse Splits
Six ETFs will reverse split shares at the following split ratios:
| Ticker |
ProShares ETF |
Split |
Old CUSIP |
New CUSIP | ||||
| UCO |
ProShares Ultra Bloomberg Crude Oil |
1:25 | 74347W247 | 74347Y888 | ||||
| BOIL |
ProShares Ultra Bloomberg Natural Gas |
1:10 | 74347Y706 | 74347Y870 | ||||
| DIG |
ProShares Ultra Oil & Gas |
1:10 | 74347R719 | 74347G705 | ||||
| OILK |
ProShares K-1 Free Crude Oil Strategy ETF |
1:5 | 74347B417 | 74347G804 | ||||
| TTT |
ProShares UltraPro Short 20+ Year Treasury |
1:4 | 74348A491 | 74347G887 | ||||
| SMDD |
ProShares UltraPro Short MidCap400 |
1:4 | 74348A392 | 74347G879 |
All reverse splits will be effective prior to market open on April 21, 2020, when the funds will begin trading at their post-split price. The ticker symbols for the funds will not change. All funds undergoing a reverse split will be issued new CUSIP numbers, listed above.
The reverse splits will increase the price per share of each fund with a proportionate decrease in the number of shares outstanding. For example, for a 1-for-4 reverse split, every four pre-split shares will result in the receipt of one post-split share, which will be priced four times higher than the NAV of a pre-split share.
Illustration of a Reverse Split
The following table shows the effect of a hypothetical 1-for-4 reverse split:
| Period |
# of Shares Owned | Hypothetical NAV | Value of Shares | |||||||||
| Pre-Split |
1,000 | $ | 10.00 | $ | 10,000.00 | |||||||
| Post-Split |
250 | $ | 40.00 | $ | 10,000.00 | |||||||
Fractional Shares from Reverse Splits
For shareholders who hold quantities of shares that are not an exact multiple of the reverse split ratio (for example, not a multiple of 4 for a 1-for-4 reverse split), the reverse split will result in the creation of a fractional share. (as an example, a shareholder that holds 5 shares, a 1-for-4 reverse split would result in 1 and 1⁄4 shares) Post-reverse split fractional shares will be redeemed for cash and sent to your broker of record. This redemption may cause some shareholders to realize gains or losses, which could be a taxable event for those shareholders.
About ProShares
ProShares has been at the forefront of the ETF revolution since 2006. ProShares now offers one of the largest lineups of ETFs, with more than $32 billion in assets. The company is the leader in strategies such as dividend growth, interest rate hedged bond and geared (leveraged and inverse) ETF investing. ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns.
Investor and Financial Professional Contact:
ProShares, 866.776.5125, info@ProShares.com or visit us at ProShares.com
For media inquiries, please contact:
Tucker Hewes, Hewes Communications, Inc., 212.207.9451, tucker@hewescomm.com
April 3, 2020
Geared (leveraged or short) ProShares ETFs seek returns that are a multiple of (e.g., 2x or -2x) the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, holding periods of greater than one day can result in returns that are significantly different than the target return and ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. Investors should consult the prospectus for further details on the calculation of the returns and the risks associated with investing in this product.
Investing involves risk, including the possible loss of principal. ProShares ETFs are generally non-diversified, and each entails certain risks, which may include risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. Short positions lose value as security prices increase. Narrowly focused investments typically exhibit higher volatility. Investments in smaller companies typically exhibit higher volatility. Smaller company stocks also may trade at greater spreads or lower trading volumes, and may be less liquid than stocks of larger companies. Please see summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor or sponsor.