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MoviePass owner Helios & Matheson clarifies reports that its CEO secured $65M in new funding

A regulatory filing also revealed that Canaccord Genuity, the Canadian investment bank, has terminated its equity distribution agreement with Helios & Matheson
cinema tickets
The MoviePass owner's board will propose a second reverse stock split of up to 500 for 1

Helios & Matheson Analytics (NASDAQ:HMNY), the penny stock and struggling owner of MoviePass, is denying press reports that its CEO has brought in $65 million in new funding, according to a regulatory filing.

This week, a number of reports surfaced in the media that said Helios’s CEO Ted Farnsworth had secured $65 million in new funding.

However, a filing with the Securities and Exchange Commission clarified the news stories and said the money was raised in August and September and “came from sales of its stock under an existing distribution agreement as well as “prepayments by investors of certain existing investor notes payable to the company.”

In the wake of the SEC filing, investors sent Helios shares down 42% to $0.021 in Thursday’s afternoon trading session.

The regulatory filing also revealed that Canaccord Genuity, the Canadian investment bank, has terminated its equity distribution agreement with Helios & Matheson, which had allowed Helios to sell up to $150 million worth of its stock. As of the end of September, Helios had sold roughly $126 million via Canaccord.

In the wake of the termination of the agreement, “no further offers or sales of the company’s common stock will be made pursuant to the company’s at-the-market offering.”

READ: MoviePass parent Helios and Matheson Analytics plummets further on plans for another reverse stock split

Just last month, in a last-ditch attempt to shore up its ailing fortunes, MoviePass’s beleaguered parent revealed plans for a second reverse stock split.

The company’s board will propose a reverse stock split in a ratio of up to 1 share for 500 shares at a shareholders’ meeting on October 18, according to a statement provided to the SEC.

The move comes months after the company orchestrated its first reverse stock split last July, which gave investors 1 share for every 250 owned.

READ: MoviePass parent Helios and Matheson shares plummet after revealing service outage due to cash problems

The first stock split set a temporary fire under Helios & Matheson’s shares, pushing them up above $22, but the stock has been plunging ever since.

In another rescue attempt, Helios and Matheson recently introduced a new business plan that allows subscribers in the popular MoviePass program to see up to three movies per month for $9.95 and also receive a $5 discount for any movie tickets beyond the first three

The new business model for MoviePass comes in the wake of a cash crisis for Helios & Matheson and the cratering of its share price.

Earlier this year, the company disclosed in an SEC filing that it was burning through as much as $20 million in cash per month on average.

Contact Ellen Kelleher at [email protected]

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