MoviePass Owner Initiates $164 Million Bond Sale

NEWS ANALYSIS — The corporate owner of fiscally-challenged movie ticket subscription pioneer MoviePass has thrown another Hail Mary.

Helios and Matheson Analytics, which owns 92% of MoviePass, June 21 said it entered into a securities purchase agreement with institutional investors to issue convertible notes (bonds) worth $164 million and 20,500 shares of preferred stock.

HMNY said it would use the funds for general corporate purposes.

The bond sale comes the day after AMC Theatres — a beneficiary of MoviePass foot traffic — announced it is launching its own $20 monthly subscription service.

MoviePass, which recently topped 3 million subs on its way to a year-end goal of 5 million subs, continues to spend millions of dollars per month more than it collects paying exhibitors for tickets consumed by subscribers.

The loss-leader business model has contributed to HMNY stock languishing below 35 cents per share.

New bond holders have the option to redeem the notes within seven months at a conversion price of $1. The preferred stock is not convertible into common stock. Each share of preferred stock is entitled to 3,205 votes per share on all matters on which holders of common stock are entitled to vote.

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